99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB4300

 

Introduced , by Rep. Jack D. Franks

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Creates the FY2016 and FY2017 Budget Implementation (Revenue) Act. Creates the Illinois Business and Economic Development Corporation Act. Authorizes the Department of Commerce and Economic Opportunity to incorporate the Illinois Business and Economic Development Corporation as a not-for-profit corporation. Creates the Health Insurance Claims Assessment Act. Imposes an assessment of 1% on claims paid by a health insurance carrier or third-party administrator. Provides that the moneys received and collected under the Act shall be deposited into the Healthcare Provider Relief Fund. Repeals the New Markets Development Program Act on July 1, 2016. Amends the Illinois Income Tax Act. Makes changes concerning: the apportionment of business income for persons other than residents; the bonus depreciation deduction for property acquired by a small business; the research and development credit; and transfers into the Local Government Distributive Fund. Amends the Tax Delinquency Amnesty Act. Provides for an amnesty period beginning October 1, 2016 and ending November 8, 2016. Amends the Limited Liability Company Act. Reduces certain fees. Eliminates stipends for various local and county officers. Amends various Acts to eliminate compensation and expense reimbursement for certain boards and commissions. Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that the rail carrier and rolling stock exemptions sunset on June 30, 2016. Makes changes concerning gasohol. Makes changes concerning the Public Aid Code. Amends the Unified Code of Corrections. Makes changes concerning staffing. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB4300LRB099 14379 HLH 38474 b

1    AN ACT concerning budget implementation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4
ARTICLE 1. SHORT TITLE; PURPOSE

 
5    Section 1-1. Short title. This Act may be cited as the
6FY2016 and FY2017 Budget Implementation (Revenue) Act.
 
7    Section 1-5. Purpose, It is the purpose of this Act to make
8changes in State programs that are necessary to implement the
9State's budget for Fiscal Years 2016 and 2017.
 
10
ARTICLE 5. ILLINOIS BUSINESS AND ECONOMIC DEVELOPMENT
11
CORPORATION ACT

 
12    Section 5-1. Short title. This Act may be cited as the
13Illinois Business and Economic Development Corporation Act.
14References in this Article to "this Act" mean this Article.
 
15    Section 5-3. Findings. The General Assembly finds that
16targeted efforts to promote and foster business growth, job
17creation, and tourism are necessary for economic growth in
18Illinois to provide more prosperity and opportunities for
19Illinois residents. As both the public and private sectors have

 

 

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1a shared interest in fostering the economic vitality of the
2State, it is the purpose of this Act to implement economic
3development policy in the State by means of collaboration
4between the government and a not-for-profit corporation.
 
5    Section 5-5. Definitions. For the purposes of this Act:
6    "Board" means the board of directors of the corporation.
7    "Chief Executive Officer" means the chief executive
8officer of the corporation.
9    "Conflict party" means a director, officer, or employee of
10the corporation; the spouse of a director, officer, or employee
11of the corporation; or an immediate family member of a
12director, officer, or employee of the corporation residing in
13the same residence as the director, officer or employee.
14    "Corporation" means the Illinois Business and Economic
15Development Corporation incorporated by the Department
16pursuant to Section 5-10.
17    "Department" means the Department of Commerce and Economic
18Opportunity.
19    "Director" means the Director of Commerce and Economic
20Opportunity.
 
21    Section 5-10. Creation of the Illinois Business and
22Economic Development Corporation.
23    (a) The General Assembly authorizes the Department, in
24accordance with Section 5-10 of the State Agency Entity

 

 

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1Creation Act, to incorporate the Illinois Business and Economic
2Development Corporation as a not-for-profit corporation
3pursuant to the General Not For Profit Corporation Act of 1986.
4    (b) The purpose of the corporation shall be to operate
5exclusively for charitable purposes within the government, by
6promoting the economic development and well-being of the State.
7The corporation shall focus on business development, small and
8minority-owned business incubation, trade and investment,
9tourism and film. The corporation shall:
10        (1) develop best practices for economic development in
11    consultation with the Department;
12        (2) enter into grant agreements with the Department and
13    sub-grants with other persons and entities, subject to
14    Department approval;
15        (3) maintain and develop economic data and research
16    that is beneficial to business development in the State;
17        (4) maintain and develop information about specific
18    statewide and regional economic incentives and benefits
19    that may be available to a business to expand within, or
20    relocate to, the State; and provide such information to
21    prospective businesses;
22        (5) formulate and pursue programs and local
23    partnerships for encouraging the location of new
24    businesses in the State and for retaining and fostering the
25    growth of existing businesses;
26        (6) negotiate tax incentives with private businesses,

 

 

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1    subject to Department approval; and
2        (7) cooperate with and provide information to State
3    agencies, local governments, community colleges, and State
4    universities on economic development matters.
5    (c) For the purposes described in this Act, the corporation
6shall collaborate with the Department; with other State
7agencies, authorities, boards, and commissions whose programs
8and activities significantly affect economic activity in the
9State as appropriate; and with local and regional economic
10development organizations, local elected officials,
11community-based organizations, service delivery providers, and
12other organizations whose programs and activities
13significantly affect economic activity. The Department and
14each other State agency, authority, board, or commission with
15which the corporation seeks to collaborate shall assist the
16corporation in carrying out its purposes as directed by the
17Governor.
18    (d) The corporation shall make every effort to focus on
19small business development and incentives and programs
20designed to assist minority-owned and women-owned businesses
21and businesses that will create jobs in areas with high
22unemployment or poverty.
23    (e) The corporation shall not be considered, in whole or in
24part, an agency, political subdivision, or instrumentality of
25the State. The corporation shall not exercise any sovereign
26power of the State. Employees and officers of the corporation

 

 

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1shall not be considered employees or officers of the State or
2subject to the Personnel Code or other laws applicable to State
3employees and officers. The corporation does not have authority
4to pledge the credit of the State; the State shall not be
5liable for the debts or obligations of the corporation; and all
6debts and obligations of the corporation shall be payable
7solely from the corporation's funds.
8    (f) The corporation shall have such powers, rights, and
9obligations as are conferred upon a not-for-profit corporation
10under the General Not For Profit Corporation Act of 1986,
11including to accept grants, loans, or other amounts from the
12State, the federal government, or other persons; to enter into
13contracts; and to employ personnel and other agents.
14    (g) The corporation shall be established, maintained, and
15operated so that donations and bequests to the corporation
16qualify as tax deductible under State income tax laws and
17Sections 170(c)(2) and 501(c)(3) of the Internal Revenue Code.
18    (h) The articles of incorporation and bylaws of the
19corporation shall provide for (1) governance and efficient
20management of the corporation, (2) a board of directors
21satisfying the requirements of Section 5-15, (3) a conflict of
22interest policy satisfying the requirements of Section 5-30,
23and (4) financial operations of the corporation, including the
24authority to receive and expend funds from public and private
25sources and to use its property, money, and other resources for
26the purposes of the corporation.
 

 

 

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1    Section 5-15. Board of directors and Chief Executive
2Officer of the corporation.
3    (a) The affairs of the corporation shall be managed by or
4under the direction of the board of directors of the
5corporation.
6    (b) The board shall comprise 16 directors as follows:
7        (1) The Governor or his or designee shall be a director
8    ex officio and serve as chairperson of the board.
9        (2) The Governor shall appoint 11 directors, including
10    (i) one director with professional experience in finance,
11    insurance, or investment banking, (ii) one director with
12    professional experience in small business development,
13    (iii) one director with professional experience in the
14    tourism or hospitality industry, and (iv) eight directors
15    who are actively employed in the private, for-profit sector
16    or who otherwise have substantial experience in economic
17    development. Of those eight directors described in clause
18    (iv), there shall be at least one director from each
19    industry cluster as identified to the Governor by the
20    Director. Of the 11 directors appointed pursuant to this
21    paragraph, at least 6 directors shall be representatives of
22    minority-owned and women-owned businesses.
23        (3) The Speaker and Minority Leader of the House of
24    Representatives and the President and Minority Leader of
25    the Senate each shall appoint one director who is employed

 

 

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1    in, or retired from employment in, a private business,
2    not-for-profit organization, or academic organization.
3    (c) To facilitate communication and cooperation between
4the corporation and State agencies involved in economic
5development, the director or head of each of the following
6agencies shall serve as a non-voting, non-director member of
7the board: Department of Commerce and Economic Opportunity,
8Department of Agriculture, Department of Natural Resources,
9Department of Financial and Professional Regulation, Illinois
10Finance Authority, Department of Revenue, Department of Labor,
11Department of Veterans' Affairs, Department of Central
12Management Services, Illinois Environmental Protection Agency,
13and Department of Employment Security.
14    (d) Except for the Governor or his or her designee, each
15director shall serve a term of three years. The articles of
16incorporation or bylaws shall divide the other 15 directors
17into three equal classes, with the terms of one class of
18directors expiring each year. In the event of a vacancy on the
19Board, the Governor shall appoint a replacement member within
2060 days. In the event of a position appointed by a legislative
21leader, the leader making the original appointment shall fill
22the vacancy within 60 days.
23    (e) The Governor shall select an initial Chief Executive
24Officer of the corporation, subject to confirmation by a
25majority of members of the board. After the initial Chief
26Executive Officer, each subsequent Chief Executive Officer

 

 

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1shall be selected and confirmed by a majority vote of the
2Board.
3    (f) The members of the board are prohibited from making any
4contributions to any political committee established to
5support the Governor or any candidate for Governor.
 
6    Section 5-20. Office of Economic Development and Tourism.
7Within the Department, there shall be created a new division
8called the Office of Economic Development and Tourism for the
9purpose of collaborating with the corporation, issuing grants
10and transferring funds to the corporation, subject to
11appropriation, and being responsible for the following
12functions of the Department: business development;
13entrepreneurship, innovation, and technology; trade and
14investment; and tourism and film. The director of that office
15shall report directly to the Director.
 
16    Section 5-25. Accountability and transparency.
17    (a) Within the Office of the Director there is created a
18new division called the Office of Accountability and
19Transparency. Such division shall be responsible for
20monitoring all grants made by the Department; for ensuring
21compliance by the Department and its grantees, including the
22corporation, with all applicable laws and grant terms and
23conditions; and for ensuring transparency in the Department's
24grant-making and other activities.

 

 

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1    (b) With respect to any grant agreement entered into
2between the corporation and the Department, the corporation
3shall comply with the following provisions:
4        (1) For the purposes of the Freedom of Information Act,
5    the corporation shall be considered a contractor
6    performing a governmental function on behalf of the
7    Department in accordance with subsection (2) of Section 7
8    of such Act, whether the corporation receives a grant from
9    or enters into a contract with the Department.
10        (2) The corporation shall post copies of minutes of its
11    board meetings on its publicly-accessible website. Any
12    redactions shall be limited to information exempt from
13    disclosure pursuant to subsection (1) of Section 7 of the
14    Freedom of Information Act or other applicable law.
15        (3) The corporation shall post copies of all final
16    grant agreements and tax incentives on its
17    publicly-accessible website within 10 business days of the
18    later of the execution of the final agreement or incentive
19    or the public announcement of the final agreement or
20    incentive. Any redactions shall be limited to information
21    exempt from disclosure pursuant to subsection (1) of
22    Section 7 of the Freedom of Information Act or other
23    applicable law.
24        (4) The corporation shall develop procedures,
25    standards, and objectives for evaluating all sub-grant
26    applicants and sub-grants awarded to ensure that State

 

 

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1    funds spent by the corporation and its sub-grantees
2    optimize return on investment for Illinois taxpayers. Such
3    procedures, standards, and objectives shall be disclosed
4    on the corporation's publicly-accessible website.
5        (5) The corporation shall assess and report its efforts
6    and results to the public and the Department's Office of
7    Accountability and Transparency. In addition, the
8    corporation shall comply with all grant monitoring
9    procedures issued by the Department for the monitoring of
10    grants of State and federal funds.
11        (6) The corporation shall conduct an annual audit
12    performed by a certified public accountant in accordance
13    with generally accepted accounting principles. Such audit
14    shall be filed with the Department's Office of
15    Accountability and Transparency and made available to the
16    public.
17        (7) The corporation shall be subject to bi-annual
18    audits by the Auditor General.
19        (8) The corporation shall submit an annual report by
20    March 31 of each year to the Governor, the General
21    Assembly, and the Department's Office of Accountability
22    and Transparency that describes the corporation's
23    operations and activities during the prior fiscal year,
24    including: (A) the corporation's complete, audited
25    financial statements, including a description of the
26    corporation's financial conditions and operations and a

 

 

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1    detailed account of how private funds were utilized versus
2    public funds; (B) a listing of all public sources of funds
3    received by the corporation; (C) a listing of all private
4    sources of funds received by the corporation; (D) a listing
5    of all firms and individuals who provided assistance or
6    resources to the corporation without compensation,
7    including the approximate value of the assistance or
8    resources provided; (E) a description of how the operations
9    and activities of the corporation serve the interests of
10    the State and promote economic development; (F) an analysis
11    of the State's return on investment; and (G) a listing of
12    all conflicts of interest from directors, officers, and
13    employees identified in the board meeting minutes.
14        (9) The corporation shall comply with all applicable
15    State and federal laws, including all applicable terms of
16    the Grant Accountability and Transparency Act. For
17    purposes of the Illinois Grant Funds Recovery Act, all
18    sub-grants of grant funds made by the corporation shall be
19    treated as grant funds in accordance with Section 12 of
20    that Act.
 
21    Section 5-30. Conflicts of interest.
22    (a) In the conduct of their service to the corporation,
23directors, officers, and employees of the corporation shall
24behave ethically and in the best interests of the State and
25avoid actual and potential conflicts of interest.

 

 

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1    (b) The corporation shall adopt and maintain a
2comprehensive conflicts of interest policy. Such policy shall
3include, without limitation, the following:
4        (1) Any pecuniary interest held by or for a conflict
5    party in a grant from or contract with the corporation or a
6    tax incentive from the Department shall be disclosed in
7    writing and identified in the minutes of the board. Such
8    conflict must be disclosed before the approval of any
9    grant, contract, or incentive.
10        (2) A conflict party who holds a pecuniary interest in
11    a grant from or contract with the corporation or a tax
12    incentive from the Department, or for whom such an interest
13    is held, shall not participate in any corporate action,
14    including deliberations on such action, with respect to
15    such grant, contract, or incentive.
16        (3) A conflict party may not acquire a pecuniary
17    interest in a grant from or contract with the corporation
18    or a tax incentive from the Department during the time that
19    the conflict party (or the spouse or immediate family
20    member of the conflict party) serves as a director,
21    officer, or employee of the corporation and for one year
22    after termination of such service.
23        (4) The corporation shall not enter into any grant or
24    contract with any entity in which a conflict party is
25    entitled to receive more than 7.5%, or in which a conflict
26    party together with his or her spouse and immediate family

 

 

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1    members residing in his or her residence are entitled to
2    receive more than 15%, of the total distributable income of
3    the entity. For purposes of this paragraph (4),
4    "distributable income" means the income of a company after
5    payment of all expenses, including employee salary and
6    bonus, and retained earnings, which is distributed to those
7    entitled to receive a share of the income. In the case of a
8    for-profit corporation, "distributable" income means
9    dividends. When calculating entitlement to distributable
10    income the entitlement shall be determined at the end of
11    the company's most recent fiscal year.
12        (5) The board of directors shall determine appropriate
13    penalties for any violations of these provisions.
 
14    Section 5-33. Prohibition on political contributions. Any
15business entity whose cumulative pending applications for
16grants or tax incentives or previously approved grants or tax
17incentives in the aggregate value more than $50,000, and any
18affiliated entities or affiliated persons of such business
19entity, are prohibited from making any contributions to any
20political committees established to support the Governor or any
21candidate for Governor.
 
22    Section 5-35. Fundraising. The corporation shall raise and
23accept funds from private donors to support its economic
24development efforts and other operations.
 

 

 

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1    Section 5-40. Repeal. This Act is repealed 3 years after
2the effective date of this Act.
 
3    (20 ILCS 605/605-300 rep.)
4    Section 5-90. The Department of Commerce and Economic
5Opportunity Law of the Civil Administrative Code of Illinois is
6amended by repealing Section 605-300.
 
7
ARTICLE 10. HEALTH INSURANCE CLAIMS ASSESSMENT ACT

 
8    Section 10-1. Short title. This Act may be cited as the
9Health Insurance Claims Assessment Act. References in this
10Article to "this Act" mean this Article.
 
11    Section 10-5. Definitions. As used in this Act:
12    "Carrier" or "insurer" means:
13        (1) a company authorized to do business in this State
14    or accredited by this State to issue policies of health or
15    dental insurance, including but not limited to,
16    self-insured plans, group health plans (as defined in
17    Section 607(1) of the Employee Retirement Income Security
18    Act of 1974), service benefit plans, managed care
19    organizations, pharmacy benefit managers, or other parties
20    that are by statute, contract, or agreement legally
21    responsible for payment of a claim for a health care item

 

 

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1    or service;
2        (2) a group health plan sponsor, including, but not
3    limited to, one or more of the following:
4            (A) an employer if a group health plan is
5        established or maintained by a single employer;
6            (B) an employee organization if a plan is
7        established or maintained by an employee organization;
8        and
9            (C) the association, committee, joint board of
10        trustees, or other similar group of representatives of
11        the parties that establish or maintain a plan if the
12        plan is established or maintained by 2 or more
13        employers or jointly by one or more employers and one
14        or more employee organizations.
15    "Claims-related expenses" means all of the following:
16        (1) cost containment expenses, including, but not
17    limited to, payments for utilization review, care or case
18    management, disease management, medication review
19    management, risk assessment, and similar administrative
20    services intended to reduce the claims paid for health and
21    medical services rendered to covered individuals by
22    attempting to ensure that needed services are delivered in
23    the most efficacious manner possible or by helping those
24    covered individuals maintain or improve their health;
25        (2) payments that are made to or by an organized group
26    of health and medical service providers in accordance with

 

 

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1    managed care risk arrangements or network access
2    agreements, which payments are unrelated to the provision
3    of services to specific covered individuals; and
4        (3) general administrative expenses.
5    "Department" means the Department of Revenue.
6    "Excess loss" or "stop-loss" means coverage issued by a
7carrier that provides insurance protection against the
8accumulation of total claims exceeding a stated level for a
9group as a whole or protection against a high-dollar claim on
10any one individual.
11    "Federal employee health benefit program" means the
12program of health benefits plans, as defined in 5 U.S.C. 8901,
13available to federal employees under 5 U.S.C. 8901 to 8914.
14    "Group health plan" means an employee welfare benefit plan
15as defined in Section 3(1) of Subtitle A of Title I of the
16Employee Retirement Income Security Act of 1974, to the extent
17that the plan provides medical care, including items and
18services paid for as medical care to employees or their
19dependents as defined under the terms of the plan directly or
20through insurance, reimbursement, or otherwise.
21    "Group insurance coverage" means a form of voluntary health
22and medical services insurance that covers members, with or
23without their eligible dependents, and that is written under a
24master policy.
25    "Health and medical services" means:
26        (1) services included in furnishing medical care,

 

 

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1    dental care, pharmaceutical benefits, or hospitalization,
2    including, but not limited to, services provided in a
3    hospital or other medical facility;
4        (2) ancillary services, including, but not limited to,
5    ambulatory services and emergency and nonemergency
6    transportation;
7        (3) services provided by a physician or other
8    practitioner, including, but not limited to, health
9    professionals, other than veterinarians, marriage and
10    family therapists, athletic trainers, massage therapists,
11    and licensed professional counselors; and
12        (4) behavioral health services, including, but not
13    limited to, mental health and substance abuse services.
14    "Paid claims" means actual payments, net of recoveries,
15made to a health and medical services provider or reimbursed to
16an individual by a carrier, third-party administrator, or
17excess loss or stop-loss carrier. "Paid claims" include
18payments, net of recoveries, made under a service contract for
19administrative services only, for health and medical services
20provided under group health plans, any claims for service in
21this State by a pharmacy benefits manager, and individual,
22nongroup, and group insurance coverage to residents of this
23State in this State that affect the rights of an insured in
24this State and bear a reasonable relation to this State,
25regardless of whether the coverage is delivered, renewed, or
26issued for delivery in this State. If a carrier or a

 

 

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1third-party administrator is contractually entitled to
2withhold a certain amount from payments due to providers of
3health and medical services in order to help ensure that the
4providers can fulfill any financial obligations they may have
5under a managed care risk arrangement, the full amounts due the
6providers before that amount is withheld shall be included in
7"paid claims". The term "paid claims" includes claims or
8payments made under any federally-approved waiver or
9initiative to integrate Medicare and Medicaid funding for dual
10eligibles under the federal Patient Protection and Affordable
11Care Act or the federal Healthcare and Education Reconciliation
12Act of 2010. The term "paid claims" does not include any of the
13following:
14        (1) Claims-related expenses.
15        (2) Payments made to a qualifying provider under an
16    incentive compensation arrangement if the payments are not
17    reflected in the processing of claims submitted for
18    services rendered to specific covered individuals.
19        (3) Claims paid by carriers or third-party
20    administrators for specified accident, accident-only
21    coverage, credit, disability income, long-term care,
22    health-related claims under automobile insurance,
23    homeowners insurance, farm owners, commercial multi-peril,
24    and worker's compensation, or claims paid under coverage
25    issued as a supplement to liability insurance.
26        (4) Claims paid for services rendered to a nonresident

 

 

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1    of this State.
2        (5) The proportionate share of claims paid for services
3    rendered to a person covered under a health benefit plan
4    for federal employees.
5        (6) Claims paid for services rendered outside of this
6    State to a person who is a resident of this State.
7        (7) Claims paid under a federal employee health benefit
8    program, Medicare, Medicare Advantage, Medicare Part D,
9    Tricare, by the United States Veterans Administration, and
10    for high-risk pools established pursuant to the federal
11    Patient Protection and Affordable Care Act or the federal
12    Healthcare and Education Reconciliation Act of 2010.
13        (8) Reimbursements to individuals under a flexible
14    spending arrangement, as that term is defined in Section
15    106(c)(2) of the Internal Revenue Code; a health savings
16    account, as that term is defined in Section 223 of the
17    Internal Revenue Code; an Archer medical savings account as
18    defined in Section 220 of the Internal Revenue Code; a
19    Medicare Advantage medical savings account, as that term is
20    defined in Section 138 of the Internal Revenue Code; or
21    other similar health reimbursement arrangement authorized
22    under federal law.
23        (9) Health and medical services costs paid by an
24    individual for cost-sharing requirements, including
25    deductibles, coinsurance, or copays.
26    "Third-party administrator" means an entity that processes

 

 

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1claims under a service contract and that may also provide one
2or more other administrative services under a service contract.
 
3    Section 10-10. Assessment; levy; limitation; adjustment;
4credit; notice; carrying forward unused credit; refund.
5    (a) For dates of service beginning on or after January 1,
62016, there is levied upon and there shall be collected from
7every carrier and third-party administrator an assessment of 1%
8on that carrier's or third-party administrator's paid claims.
9    (b) All of the following apply to a group health plan that
10uses the services of a third-party administrator or excess loss
11or stop-loss insurer:
12        (1) A group health plan sponsor is not responsible for
13    an assessment under this Section for a paid claim if the
14    assessment on that claim has been paid by a third-party
15    administrator or excess loss or stop-loss insurer.
16        (2) Except as otherwise provided in paragraph (4), the
17    third-party administrator is responsible for all
18    assessments on paid claims paid by the third-party
19    administrator.
20        (3) Except as otherwise provided in paragraph (4), the
21    excess loss or stop-loss insurer is responsible for all
22    assessments on paid claims paid by the excess loss or
23    stop-loss insurer.
24        (4) If there is both a third-party administrator and an
25    excess loss or stop-loss insurer servicing the group health

 

 

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1    plan, the third-party administrator is responsible for all
2    assessments for paid claims that are not reimbursed by the
3    excess loss or stop-loss insurer and the excess loss or
4    stop-loss insurer is responsible for all assessments for
5    paid claims that are reimbursable to the excess loss or
6    stop-loss insurer.
7    (c) The assessment under this Section shall not exceed
8$10,000 per insured individual or covered life annually.
9    (d) To the extent an assessment paid under this Section for
10paid claims for a group health plan or individual subscriber is
11inaccurate due to subsequent claim adjustments or recoveries,
12subsequent filings shall be adjusted to accurately reflect the
13correct assessment based on actual claims paid.
 
14    Section 10-15. Carrier required to file rates;
15methodology. A carrier or third-party administrator shall
16develop and implement a methodology by which it will collect
17the assessment levied under this Act from an individual,
18employer, or group health plan, subject to all of the
19following:
20        (1) Any methodology shall be applied uniformly within a
21    line of business.
22        (2) Except as provided in paragraph (4), health status
23    or claims experience of an individual or group shall not be
24    an element or factor of any methodology to collect the
25    assessment from that individual or group.

 

 

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1        (3) The amount collected from individuals and groups
2    with insured coverage shall be determined as a percentage
3    of premium.
4        (4) The amount collected from groups with uninsured or
5    self-funded coverage shall be determined as a percentage of
6    actual paid claims.
7        (5) The amount collected shall reflect only the
8    assessment levied under this Act, and shall not include any
9    additional amounts, such as related administrative
10    expenses.
11        (6) Each carrier shall notify the Department of the
12    methodology used for the collection of the assessment
13    levied under this Act.
 
14    Section 10-20. Returns.
15    (a) Every carrier and third-party administrator with paid
16claims subject to the assessment under this Act shall file with
17the Department on or before April 30, July 30, October 30, and
18January 30 of each year a return for the preceding calendar
19quarter, in a form prescribed by the Department, showing all
20information that the Department considers necessary for the
21proper administration of this Act. At the same time, each
22carrier and third-party administrator shall pay to the
23Department the amount of the assessment imposed under this Act
24with respect to the paid claims included in the return. The
25Department may require each carrier and third-party

 

 

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1administrator to file with the Department an annual
2reconciliation return.
3    (b) If a due date falls on a Saturday, Sunday, State
4holiday, or legal banking holiday, the returns and assessments
5are due on the next succeeding business day.
6    (c) The Department may require that payment of the
7assessment be made by an electronic funds transfer method
8approved by the Department.
 
9    Section 10-25. Records.
10    (a) Each carrier or third-party administrator liable for an
11assessment under this Act shall keep accurate and complete
12records and pertinent documents as required by the Department.
13Records required by the Department shall be retained for a
14period of 4 years after the assessment imposed under this Act
15to which the records apply is due or as otherwise provided by
16law.
17    (b) If the Department considers it necessary, the
18Department may require a person, by notice served upon that
19person, to make a return, render under oath certain statements,
20or keep certain records the Department considers sufficient to
21show whether that person is liable for the assessment under
22this Act.
23    (c) If a carrier or third-party administrator fails to file
24a return or keep proper records as required under this Section,
25or if the Department has reason to believe that any records

 

 

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1kept or returns filed are inaccurate or incomplete and that
2additional assessments are due, the Department may assess the
3amount of the assessment due from the carrier or third-party
4administrator based on information that is available or that
5may become available to the Department. An assessment under
6this subsection (c) is considered prima facie correct under
7this Act, and a carrier or third-party administrator has the
8burden of proof for refuting the assessment.
 
9    Section 10-30. Distribution of receipts; Medicaid
10services. All moneys received and collected under this Act
11shall be deposited into the Healthcare Provider Relief Fund and
12used solely for the purpose of funding Medicaid services
13provided under the medical assistance programs administered by
14the Department of Healthcare and Family Services.
 
15
ARTICLE 15. NEW MARKETS DEVELOPMENT PROGRAM; WATER'S EDGE;
16
STIPENDS

 
17    Section 15-5. The New Markets Development Program Act is
18amended by adding Section 55 as follows:
 
19    (20 ILCS 663/55 new)
20    Sec. 55. Repealer. This Act is repealed on July 1, 2016.
 
21    Section 15-10. The Illinois Income Tax Act is amended by

 

 

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1changing Sections 203, 304, 901, and 1501 and by adding Section
2309 as follows:
 
3    (35 ILCS 5/203)  (from Ch. 120, par. 2-203)
4    Sec. 203. Base income defined.
5    (a) Individuals.
6        (1) In general. In the case of an individual, base
7    income means an amount equal to the taxpayer's adjusted
8    gross income for the taxable year as modified by paragraph
9    (2).
10        (2) Modifications. The adjusted gross income referred
11    to in paragraph (1) shall be modified by adding thereto the
12    sum of the following amounts:
13            (A) An amount equal to all amounts paid or accrued
14        to the taxpayer as interest or dividends during the
15        taxable year to the extent excluded from gross income
16        in the computation of adjusted gross income, except
17        stock dividends of qualified public utilities
18        described in Section 305(e) of the Internal Revenue
19        Code;
20            (B) An amount equal to the amount of tax imposed by
21        this Act to the extent deducted from gross income in
22        the computation of adjusted gross income for the
23        taxable year;
24            (C) An amount equal to the amount received during
25        the taxable year as a recovery or refund of real

 

 

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1        property taxes paid with respect to the taxpayer's
2        principal residence under the Revenue Act of 1939 and
3        for which a deduction was previously taken under
4        subparagraph (L) of this paragraph (2) prior to July 1,
5        1991, the retrospective application date of Article 4
6        of Public Act 87-17. In the case of multi-unit or
7        multi-use structures and farm dwellings, the taxes on
8        the taxpayer's principal residence shall be that
9        portion of the total taxes for the entire property
10        which is attributable to such principal residence;
11            (D) An amount equal to the amount of the capital
12        gain deduction allowable under the Internal Revenue
13        Code, to the extent deducted from gross income in the
14        computation of adjusted gross income;
15            (D-5) An amount, to the extent not included in
16        adjusted gross income, equal to the amount of money
17        withdrawn by the taxpayer in the taxable year from a
18        medical care savings account and the interest earned on
19        the account in the taxable year of a withdrawal
20        pursuant to subsection (b) of Section 20 of the Medical
21        Care Savings Account Act or subsection (b) of Section
22        20 of the Medical Care Savings Account Act of 2000;
23            (D-10) For taxable years ending after December 31,
24        1997, an amount equal to any eligible remediation costs
25        that the individual deducted in computing adjusted
26        gross income and for which the individual claims a

 

 

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1        credit under subsection (l) of Section 201;
2            (D-15) For taxable years 2001 and thereafter, an
3        amount equal to the bonus depreciation deduction taken
4        on the taxpayer's federal income tax return for the
5        taxable year under subsection (k) of Section 168 of the
6        Internal Revenue Code; except that, for taxable years
7        beginning on or after January 1, 2016, for property
8        acquired by purchase, as defined in subsection (d) of
9        Section 179 of the Internal Revenue Code, by a small
10        business, the modification shall be in an amount equal
11        to the depreciation deduction taken on the taxpayer's
12        federal income tax return for property that is
13        depreciable pursuant to Section 167 of the Internal
14        Revenue Code; for purposes of this paragraph (D-15),
15        "small business" means an individual sole proprietor,
16        corporation, trust, or partnership, including its
17        affiliates, that is independently owned and operated,
18        not dominant in its field, and has average gross annual
19        sales for the taxable year and the 2 previous taxable
20        years of less than $10,000,000;
21            (D-16) If the taxpayer sells, transfers, abandons,
22        or otherwise disposes of property for which the
23        taxpayer was required in any taxable year to make an
24        addition modification under subparagraph (D-15), then
25        an amount equal to the aggregate amount of the
26        deductions taken in all taxable years under

 

 

HB4300- 28 -LRB099 14379 HLH 38474 b

1        subparagraph (Z) with respect to that property.
2            If the taxpayer continues to own property through
3        the last day of the last tax year for which the
4        taxpayer may claim a depreciation deduction for
5        federal income tax purposes and for which the taxpayer
6        was allowed in any taxable year to make a subtraction
7        modification under subparagraph (Z), then an amount
8        equal to that subtraction modification.
9            The taxpayer is required to make the addition
10        modification under this subparagraph only once with
11        respect to any one piece of property;
12            (D-17) An amount equal to the amount otherwise
13        allowed as a deduction in computing base income for
14        interest paid, accrued, or incurred, directly or
15        indirectly, (i) for taxable years ending on or after
16        December 31, 2004, to a foreign person who would be a
17        member of the same unitary business group but for the
18        fact that foreign person's business activity outside
19        the United States is 80% or more of the foreign
20        person's total business activity and (ii) for taxable
21        years ending on or after December 31, 2008, to a person
22        who would be a member of the same unitary business
23        group but for the fact that the person is prohibited
24        under Section 1501(a)(27) from being included in the
25        unitary business group because he or she is ordinarily
26        required to apportion business income under different

 

 

HB4300- 29 -LRB099 14379 HLH 38474 b

1        subsections of Section 304. The addition modification
2        required by this subparagraph shall be reduced to the
3        extent that dividends were included in base income of
4        the unitary group for the same taxable year and
5        received by the taxpayer or by a member of the
6        taxpayer's unitary business group (including amounts
7        included in gross income under Sections 951 through 964
8        of the Internal Revenue Code and amounts included in
9        gross income under Section 78 of the Internal Revenue
10        Code) with respect to the stock of the same person to
11        whom the interest was paid, accrued, or incurred.
12            This paragraph shall not apply to the following:
13                (i) an item of interest paid, accrued, or
14            incurred, directly or indirectly, to a person who
15            is subject in a foreign country or state, other
16            than a state which requires mandatory unitary
17            reporting, to a tax on or measured by net income
18            with respect to such interest; or
19                (ii) an item of interest paid, accrued, or
20            incurred, directly or indirectly, to a person if
21            the taxpayer can establish, based on a
22            preponderance of the evidence, both of the
23            following:
24                    (a) the person, during the same taxable
25                year, paid, accrued, or incurred, the interest
26                to a person that is not a related member, and

 

 

HB4300- 30 -LRB099 14379 HLH 38474 b

1                    (b) the transaction giving rise to the
2                interest expense between the taxpayer and the
3                person did not have as a principal purpose the
4                avoidance of Illinois income tax, and is paid
5                pursuant to a contract or agreement that
6                reflects an arm's-length interest rate and
7                terms; or
8                (iii) the taxpayer can establish, based on
9            clear and convincing evidence, that the interest
10            paid, accrued, or incurred relates to a contract or
11            agreement entered into at arm's-length rates and
12            terms and the principal purpose for the payment is
13            not federal or Illinois tax avoidance; or
14                (iv) an item of interest paid, accrued, or
15            incurred, directly or indirectly, to a person if
16            the taxpayer establishes by clear and convincing
17            evidence that the adjustments are unreasonable; or
18            if the taxpayer and the Director agree in writing
19            to the application or use of an alternative method
20            of apportionment under Section 304(f).
21                Nothing in this subsection shall preclude the
22            Director from making any other adjustment
23            otherwise allowed under Section 404 of this Act for
24            any tax year beginning after the effective date of
25            this amendment provided such adjustment is made
26            pursuant to regulation adopted by the Department

 

 

HB4300- 31 -LRB099 14379 HLH 38474 b

1            and such regulations provide methods and standards
2            by which the Department will utilize its authority
3            under Section 404 of this Act;
4            (D-18) An amount equal to the amount of intangible
5        expenses and costs otherwise allowed as a deduction in
6        computing base income, and that were paid, accrued, or
7        incurred, directly or indirectly, (i) for taxable
8        years ending on or after December 31, 2004, to a
9        foreign person who would be a member of the same
10        unitary business group but for the fact that the
11        foreign person's business activity outside the United
12        States is 80% or more of that person's total business
13        activity and (ii) for taxable years ending on or after
14        December 31, 2008, to a person who would be a member of
15        the same unitary business group but for the fact that
16        the person is prohibited under Section 1501(a)(27)
17        from being included in the unitary business group
18        because he or she is ordinarily required to apportion
19        business income under different subsections of Section
20        304. The addition modification required by this
21        subparagraph shall be reduced to the extent that
22        dividends were included in base income of the unitary
23        group for the same taxable year and received by the
24        taxpayer or by a member of the taxpayer's unitary
25        business group (including amounts included in gross
26        income under Sections 951 through 964 of the Internal

 

 

HB4300- 32 -LRB099 14379 HLH 38474 b

1        Revenue Code and amounts included in gross income under
2        Section 78 of the Internal Revenue Code) with respect
3        to the stock of the same person to whom the intangible
4        expenses and costs were directly or indirectly paid,
5        incurred, or accrued. The preceding sentence does not
6        apply to the extent that the same dividends caused a
7        reduction to the addition modification required under
8        Section 203(a)(2)(D-17) of this Act. As used in this
9        subparagraph, the term "intangible expenses and costs"
10        includes (1) expenses, losses, and costs for, or
11        related to, the direct or indirect acquisition, use,
12        maintenance or management, ownership, sale, exchange,
13        or any other disposition of intangible property; (2)
14        losses incurred, directly or indirectly, from
15        factoring transactions or discounting transactions;
16        (3) royalty, patent, technical, and copyright fees;
17        (4) licensing fees; and (5) other similar expenses and
18        costs. For purposes of this subparagraph, "intangible
19        property" includes patents, patent applications, trade
20        names, trademarks, service marks, copyrights, mask
21        works, trade secrets, and similar types of intangible
22        assets.
23            This paragraph shall not apply to the following:
24                (i) any item of intangible expenses or costs
25            paid, accrued, or incurred, directly or
26            indirectly, from a transaction with a person who is

 

 

HB4300- 33 -LRB099 14379 HLH 38474 b

1            subject in a foreign country or state, other than a
2            state which requires mandatory unitary reporting,
3            to a tax on or measured by net income with respect
4            to such item; or
5                (ii) any item of intangible expense or cost
6            paid, accrued, or incurred, directly or
7            indirectly, if the taxpayer can establish, based
8            on a preponderance of the evidence, both of the
9            following:
10                    (a) the person during the same taxable
11                year paid, accrued, or incurred, the
12                intangible expense or cost to a person that is
13                not a related member, and
14                    (b) the transaction giving rise to the
15                intangible expense or cost between the
16                taxpayer and the person did not have as a
17                principal purpose the avoidance of Illinois
18                income tax, and is paid pursuant to a contract
19                or agreement that reflects arm's-length terms;
20                or
21                (iii) any item of intangible expense or cost
22            paid, accrued, or incurred, directly or
23            indirectly, from a transaction with a person if the
24            taxpayer establishes by clear and convincing
25            evidence, that the adjustments are unreasonable;
26            or if the taxpayer and the Director agree in

 

 

HB4300- 34 -LRB099 14379 HLH 38474 b

1            writing to the application or use of an alternative
2            method of apportionment under Section 304(f);
3                Nothing in this subsection shall preclude the
4            Director from making any other adjustment
5            otherwise allowed under Section 404 of this Act for
6            any tax year beginning after the effective date of
7            this amendment provided such adjustment is made
8            pursuant to regulation adopted by the Department
9            and such regulations provide methods and standards
10            by which the Department will utilize its authority
11            under Section 404 of this Act;
12            (D-19) For taxable years ending on or after
13        December 31, 2008, an amount equal to the amount of
14        insurance premium expenses and costs otherwise allowed
15        as a deduction in computing base income, and that were
16        paid, accrued, or incurred, directly or indirectly, to
17        a person who would be a member of the same unitary
18        business group but for the fact that the person is
19        prohibited under Section 1501(a)(27) from being
20        included in the unitary business group because he or
21        she is ordinarily required to apportion business
22        income under different subsections of Section 304. The
23        addition modification required by this subparagraph
24        shall be reduced to the extent that dividends were
25        included in base income of the unitary group for the
26        same taxable year and received by the taxpayer or by a

 

 

HB4300- 35 -LRB099 14379 HLH 38474 b

1        member of the taxpayer's unitary business group
2        (including amounts included in gross income under
3        Sections 951 through 964 of the Internal Revenue Code
4        and amounts included in gross income under Section 78
5        of the Internal Revenue Code) with respect to the stock
6        of the same person to whom the premiums and costs were
7        directly or indirectly paid, incurred, or accrued. The
8        preceding sentence does not apply to the extent that
9        the same dividends caused a reduction to the addition
10        modification required under Section 203(a)(2)(D-17) or
11        Section 203(a)(2)(D-18) of this Act.
12            (D-20) For taxable years beginning on or after
13        January 1, 2002 and ending on or before December 31,
14        2006, in the case of a distribution from a qualified
15        tuition program under Section 529 of the Internal
16        Revenue Code, other than (i) a distribution from a
17        College Savings Pool created under Section 16.5 of the
18        State Treasurer Act or (ii) a distribution from the
19        Illinois Prepaid Tuition Trust Fund, an amount equal to
20        the amount excluded from gross income under Section
21        529(c)(3)(B). For taxable years beginning on or after
22        January 1, 2007, in the case of a distribution from a
23        qualified tuition program under Section 529 of the
24        Internal Revenue Code, other than (i) a distribution
25        from a College Savings Pool created under Section 16.5
26        of the State Treasurer Act, (ii) a distribution from

 

 

HB4300- 36 -LRB099 14379 HLH 38474 b

1        the Illinois Prepaid Tuition Trust Fund, or (iii) a
2        distribution from a qualified tuition program under
3        Section 529 of the Internal Revenue Code that (I)
4        adopts and determines that its offering materials
5        comply with the College Savings Plans Network's
6        disclosure principles and (II) has made reasonable
7        efforts to inform in-state residents of the existence
8        of in-state qualified tuition programs by informing
9        Illinois residents directly and, where applicable, to
10        inform financial intermediaries distributing the
11        program to inform in-state residents of the existence
12        of in-state qualified tuition programs at least
13        annually, an amount equal to the amount excluded from
14        gross income under Section 529(c)(3)(B).
15            For the purposes of this subparagraph (D-20), a
16        qualified tuition program has made reasonable efforts
17        if it makes disclosures (which may use the term
18        "in-state program" or "in-state plan" and need not
19        specifically refer to Illinois or its qualified
20        programs by name) (i) directly to prospective
21        participants in its offering materials or makes a
22        public disclosure, such as a website posting; and (ii)
23        where applicable, to intermediaries selling the
24        out-of-state program in the same manner that the
25        out-of-state program distributes its offering
26        materials;

 

 

HB4300- 37 -LRB099 14379 HLH 38474 b

1            (D-21) For taxable years beginning on or after
2        January 1, 2007, in the case of transfer of moneys from
3        a qualified tuition program under Section 529 of the
4        Internal Revenue Code that is administered by the State
5        to an out-of-state program, an amount equal to the
6        amount of moneys previously deducted from base income
7        under subsection (a)(2)(Y) of this Section;
8            (D-22) For taxable years beginning on or after
9        January 1, 2009, in the case of a nonqualified
10        withdrawal or refund of moneys from a qualified tuition
11        program under Section 529 of the Internal Revenue Code
12        administered by the State that is not used for
13        qualified expenses at an eligible education
14        institution, an amount equal to the contribution
15        component of the nonqualified withdrawal or refund
16        that was previously deducted from base income under
17        subsection (a)(2)(y) of this Section, provided that
18        the withdrawal or refund did not result from the
19        beneficiary's death or disability;
20            (D-23) An amount equal to the credit allowable to
21        the taxpayer under Section 218(a) of this Act,
22        determined without regard to Section 218(c) of this
23        Act;
24            (D-24) For taxable years ending on or after
25        December 31, 2015, an amount equal to the deduction
26        allowed under Section 199 of the Internal Revenue Code

 

 

HB4300- 38 -LRB099 14379 HLH 38474 b

1        for the taxable year;
2    and by deducting from the total so obtained the sum of the
3    following amounts:
4            (E) For taxable years ending before December 31,
5        2001, any amount included in such total in respect of
6        any compensation (including but not limited to any
7        compensation paid or accrued to a serviceman while a
8        prisoner of war or missing in action) paid to a
9        resident by reason of being on active duty in the Armed
10        Forces of the United States and in respect of any
11        compensation paid or accrued to a resident who as a
12        governmental employee was a prisoner of war or missing
13        in action, and in respect of any compensation paid to a
14        resident in 1971 or thereafter for annual training
15        performed pursuant to Sections 502 and 503, Title 32,
16        United States Code as a member of the Illinois National
17        Guard or, beginning with taxable years ending on or
18        after December 31, 2007, the National Guard of any
19        other state. For taxable years ending on or after
20        December 31, 2001, any amount included in such total in
21        respect of any compensation (including but not limited
22        to any compensation paid or accrued to a serviceman
23        while a prisoner of war or missing in action) paid to a
24        resident by reason of being a member of any component
25        of the Armed Forces of the United States and in respect
26        of any compensation paid or accrued to a resident who

 

 

HB4300- 39 -LRB099 14379 HLH 38474 b

1        as a governmental employee was a prisoner of war or
2        missing in action, and in respect of any compensation
3        paid to a resident in 2001 or thereafter by reason of
4        being a member of the Illinois National Guard or,
5        beginning with taxable years ending on or after
6        December 31, 2007, the National Guard of any other
7        state. The provisions of this subparagraph (E) are
8        exempt from the provisions of Section 250;
9            (F) An amount equal to all amounts included in such
10        total pursuant to the provisions of Sections 402(a),
11        402(c), 403(a), 403(b), 406(a), 407(a), and 408 of the
12        Internal Revenue Code, or included in such total as
13        distributions under the provisions of any retirement
14        or disability plan for employees of any governmental
15        agency or unit, or retirement payments to retired
16        partners, which payments are excluded in computing net
17        earnings from self employment by Section 1402 of the
18        Internal Revenue Code and regulations adopted pursuant
19        thereto;
20            (G) The valuation limitation amount;
21            (H) An amount equal to the amount of any tax
22        imposed by this Act which was refunded to the taxpayer
23        and included in such total for the taxable year;
24            (I) An amount equal to all amounts included in such
25        total pursuant to the provisions of Section 111 of the
26        Internal Revenue Code as a recovery of items previously

 

 

HB4300- 40 -LRB099 14379 HLH 38474 b

1        deducted from adjusted gross income in the computation
2        of taxable income;
3            (J) An amount equal to those dividends included in
4        such total which were paid by a corporation which
5        conducts business operations in a River Edge
6        Redevelopment Zone or zones created under the River
7        Edge Redevelopment Zone Act, and conducts
8        substantially all of its operations in a River Edge
9        Redevelopment Zone or zones. This subparagraph (J) is
10        exempt from the provisions of Section 250;
11            (K) An amount equal to those dividends included in
12        such total that were paid by a corporation that
13        conducts business operations in a federally designated
14        Foreign Trade Zone or Sub-Zone and that is designated a
15        High Impact Business located in Illinois; provided
16        that dividends eligible for the deduction provided in
17        subparagraph (J) of paragraph (2) of this subsection
18        shall not be eligible for the deduction provided under
19        this subparagraph (K);
20            (L) For taxable years ending after December 31,
21        1983, an amount equal to all social security benefits
22        and railroad retirement benefits included in such
23        total pursuant to Sections 72(r) and 86 of the Internal
24        Revenue Code;
25            (M) With the exception of any amounts subtracted
26        under subparagraph (N), an amount equal to the sum of

 

 

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1        all amounts disallowed as deductions by (i) Sections
2        171(a) (2), and 265(2) of the Internal Revenue Code,
3        and all amounts of expenses allocable to interest and
4        disallowed as deductions by Section 265(1) of the
5        Internal Revenue Code; and (ii) for taxable years
6        ending on or after August 13, 1999, Sections 171(a)(2),
7        265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue
8        Code, plus, for taxable years ending on or after
9        December 31, 2011, Section 45G(e)(3) of the Internal
10        Revenue Code and, for taxable years ending on or after
11        December 31, 2008, any amount included in gross income
12        under Section 87 of the Internal Revenue Code; the
13        provisions of this subparagraph are exempt from the
14        provisions of Section 250;
15            (N) An amount equal to all amounts included in such
16        total which are exempt from taxation by this State
17        either by reason of its statutes or Constitution or by
18        reason of the Constitution, treaties or statutes of the
19        United States; provided that, in the case of any
20        statute of this State that exempts income derived from
21        bonds or other obligations from the tax imposed under
22        this Act, the amount exempted shall be the interest net
23        of bond premium amortization;
24            (O) An amount equal to any contribution made to a
25        job training project established pursuant to the Tax
26        Increment Allocation Redevelopment Act;

 

 

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1            (P) An amount equal to the amount of the deduction
2        used to compute the federal income tax credit for
3        restoration of substantial amounts held under claim of
4        right for the taxable year pursuant to Section 1341 of
5        the Internal Revenue Code or of any itemized deduction
6        taken from adjusted gross income in the computation of
7        taxable income for restoration of substantial amounts
8        held under claim of right for the taxable year;
9            (Q) An amount equal to any amounts included in such
10        total, received by the taxpayer as an acceleration in
11        the payment of life, endowment or annuity benefits in
12        advance of the time they would otherwise be payable as
13        an indemnity for a terminal illness;
14            (R) An amount equal to the amount of any federal or
15        State bonus paid to veterans of the Persian Gulf War;
16            (S) An amount, to the extent included in adjusted
17        gross income, equal to the amount of a contribution
18        made in the taxable year on behalf of the taxpayer to a
19        medical care savings account established under the
20        Medical Care Savings Account Act or the Medical Care
21        Savings Account Act of 2000 to the extent the
22        contribution is accepted by the account administrator
23        as provided in that Act;
24            (T) An amount, to the extent included in adjusted
25        gross income, equal to the amount of interest earned in
26        the taxable year on a medical care savings account

 

 

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1        established under the Medical Care Savings Account Act
2        or the Medical Care Savings Account Act of 2000 on
3        behalf of the taxpayer, other than interest added
4        pursuant to item (D-5) of this paragraph (2);
5            (U) For one taxable year beginning on or after
6        January 1, 1994, an amount equal to the total amount of
7        tax imposed and paid under subsections (a) and (b) of
8        Section 201 of this Act on grant amounts received by
9        the taxpayer under the Nursing Home Grant Assistance
10        Act during the taxpayer's taxable years 1992 and 1993;
11            (V) Beginning with tax years ending on or after
12        December 31, 1995 and ending with tax years ending on
13        or before December 31, 2004, an amount equal to the
14        amount paid by a taxpayer who is a self-employed
15        taxpayer, a partner of a partnership, or a shareholder
16        in a Subchapter S corporation for health insurance or
17        long-term care insurance for that taxpayer or that
18        taxpayer's spouse or dependents, to the extent that the
19        amount paid for that health insurance or long-term care
20        insurance may be deducted under Section 213 of the
21        Internal Revenue Code, has not been deducted on the
22        federal income tax return of the taxpayer, and does not
23        exceed the taxable income attributable to that
24        taxpayer's income, self-employment income, or
25        Subchapter S corporation income; except that no
26        deduction shall be allowed under this item (V) if the

 

 

HB4300- 44 -LRB099 14379 HLH 38474 b

1        taxpayer is eligible to participate in any health
2        insurance or long-term care insurance plan of an
3        employer of the taxpayer or the taxpayer's spouse. The
4        amount of the health insurance and long-term care
5        insurance subtracted under this item (V) shall be
6        determined by multiplying total health insurance and
7        long-term care insurance premiums paid by the taxpayer
8        times a number that represents the fractional
9        percentage of eligible medical expenses under Section
10        213 of the Internal Revenue Code of 1986 not actually
11        deducted on the taxpayer's federal income tax return;
12            (W) For taxable years beginning on or after January
13        1, 1998, all amounts included in the taxpayer's federal
14        gross income in the taxable year from amounts converted
15        from a regular IRA to a Roth IRA. This paragraph is
16        exempt from the provisions of Section 250;
17            (X) For taxable year 1999 and thereafter, an amount
18        equal to the amount of any (i) distributions, to the
19        extent includible in gross income for federal income
20        tax purposes, made to the taxpayer because of his or
21        her status as a victim of persecution for racial or
22        religious reasons by Nazi Germany or any other Axis
23        regime or as an heir of the victim and (ii) items of
24        income, to the extent includible in gross income for
25        federal income tax purposes, attributable to, derived
26        from or in any way related to assets stolen from,

 

 

HB4300- 45 -LRB099 14379 HLH 38474 b

1        hidden from, or otherwise lost to a victim of
2        persecution for racial or religious reasons by Nazi
3        Germany or any other Axis regime immediately prior to,
4        during, and immediately after World War II, including,
5        but not limited to, interest on the proceeds receivable
6        as insurance under policies issued to a victim of
7        persecution for racial or religious reasons by Nazi
8        Germany or any other Axis regime by European insurance
9        companies immediately prior to and during World War II;
10        provided, however, this subtraction from federal
11        adjusted gross income does not apply to assets acquired
12        with such assets or with the proceeds from the sale of
13        such assets; provided, further, this paragraph shall
14        only apply to a taxpayer who was the first recipient of
15        such assets after their recovery and who is a victim of
16        persecution for racial or religious reasons by Nazi
17        Germany or any other Axis regime or as an heir of the
18        victim. The amount of and the eligibility for any
19        public assistance, benefit, or similar entitlement is
20        not affected by the inclusion of items (i) and (ii) of
21        this paragraph in gross income for federal income tax
22        purposes. This paragraph is exempt from the provisions
23        of Section 250;
24            (Y) For taxable years beginning on or after January
25        1, 2002 and ending on or before December 31, 2004,
26        moneys contributed in the taxable year to a College

 

 

HB4300- 46 -LRB099 14379 HLH 38474 b

1        Savings Pool account under Section 16.5 of the State
2        Treasurer Act, except that amounts excluded from gross
3        income under Section 529(c)(3)(C)(i) of the Internal
4        Revenue Code shall not be considered moneys
5        contributed under this subparagraph (Y). For taxable
6        years beginning on or after January 1, 2005, a maximum
7        of $10,000 contributed in the taxable year to (i) a
8        College Savings Pool account under Section 16.5 of the
9        State Treasurer Act or (ii) the Illinois Prepaid
10        Tuition Trust Fund, except that amounts excluded from
11        gross income under Section 529(c)(3)(C)(i) of the
12        Internal Revenue Code shall not be considered moneys
13        contributed under this subparagraph (Y). For purposes
14        of this subparagraph, contributions made by an
15        employer on behalf of an employee, or matching
16        contributions made by an employee, shall be treated as
17        made by the employee. This subparagraph (Y) is exempt
18        from the provisions of Section 250;
19            (Z) For taxable years 2001 and thereafter, for the
20        taxable year in which the bonus depreciation deduction
21        is taken on the taxpayer's federal income tax return
22        under subsection (k) of Section 168 of the Internal
23        Revenue Code and for each applicable taxable year
24        thereafter, an amount equal to "x", where:
25                (1) "y" equals the amount of the depreciation
26            deduction taken for the taxable year on the

 

 

HB4300- 47 -LRB099 14379 HLH 38474 b

1            taxpayer's federal income tax return on property
2            for which the bonus depreciation deduction was
3            taken in any year under subsection (k) of Section
4            168 of the Internal Revenue Code, but not including
5            the bonus depreciation deduction;
6                (2) for taxable years ending on or before
7            December 31, 2005, "x" equals "y" multiplied by 30
8            and then divided by 70 (or "y" multiplied by
9            0.429); and
10                (3) for taxable years ending after December
11            31, 2005:
12                    (i) for property on which a bonus
13                depreciation deduction of 30% of the adjusted
14                basis was taken, "x" equals "y" multiplied by
15                30 and then divided by 70 (or "y" multiplied by
16                0.429); and
17                    (ii) for property on which a bonus
18                depreciation deduction of 50% of the adjusted
19                basis was taken, "x" equals "y" multiplied by
20                1.0; and .
21                (4) for taxable years beginning on and after
22            January 1, 2016, in the case of a small business,
23            for property acquired by purchase as defined in
24            subsection (d) of Section 179 of the Internal
25            Revenue Code, "x" equals the basis of the property
26            used to compute the depreciation deduction for

 

 

HB4300- 48 -LRB099 14379 HLH 38474 b

1            federal income tax purposes; for purposes of this
2            paragraph (Z)(4), "small business" means an
3            individual sole proprietor, corporation, trust, or
4            partnership, including its affiliates, that is
5            independently owned and operated, not dominant in
6            its field, and has average gross annual sales for
7            the taxable year and the 2 previous taxable years
8            of less than $10,000,000.
9            The aggregate amount deducted under this
10        subparagraph in all taxable years for any one piece of
11        property may not exceed the amount of the bonus
12        depreciation deduction taken on that property on the
13        taxpayer's federal income tax return under subsection
14        (k) of Section 168 of the Internal Revenue Code. This
15        subparagraph (Z) is exempt from the provisions of
16        Section 250;
17            (AA) If the taxpayer sells, transfers, abandons,
18        or otherwise disposes of property for which the
19        taxpayer was required in any taxable year to make an
20        addition modification under subparagraph (D-15), then
21        an amount equal to that addition modification.
22            If the taxpayer continues to own property through
23        the last day of the last tax year for which the
24        taxpayer may claim a depreciation deduction for
25        federal income tax purposes and for which the taxpayer
26        was required in any taxable year to make an addition

 

 

HB4300- 49 -LRB099 14379 HLH 38474 b

1        modification under subparagraph (D-15), then an amount
2        equal to that addition modification.
3            The taxpayer is allowed to take the deduction under
4        this subparagraph only once with respect to any one
5        piece of property.
6            This subparagraph (AA) is exempt from the
7        provisions of Section 250;
8            (BB) Any amount included in adjusted gross income,
9        other than salary, received by a driver in a
10        ridesharing arrangement using a motor vehicle;
11            (CC) The amount of (i) any interest income (net of
12        the deductions allocable thereto) taken into account
13        for the taxable year with respect to a transaction with
14        a taxpayer that is required to make an addition
15        modification with respect to such transaction under
16        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
17        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
18        the amount of that addition modification, and (ii) any
19        income from intangible property (net of the deductions
20        allocable thereto) taken into account for the taxable
21        year with respect to a transaction with a taxpayer that
22        is required to make an addition modification with
23        respect to such transaction under Section
24        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
25        203(d)(2)(D-8), but not to exceed the amount of that
26        addition modification. This subparagraph (CC) is

 

 

HB4300- 50 -LRB099 14379 HLH 38474 b

1        exempt from the provisions of Section 250;
2            (DD) An amount equal to the interest income taken
3        into account for the taxable year (net of the
4        deductions allocable thereto) with respect to
5        transactions with (i) a foreign person who would be a
6        member of the taxpayer's unitary business group but for
7        the fact that the foreign person's business activity
8        outside the United States is 80% or more of that
9        person's total business activity and (ii) for taxable
10        years ending on or after December 31, 2008, to a person
11        who would be a member of the same unitary business
12        group but for the fact that the person is prohibited
13        under Section 1501(a)(27) from being included in the
14        unitary business group because he or she is ordinarily
15        required to apportion business income under different
16        subsections of Section 304, but not to exceed the
17        addition modification required to be made for the same
18        taxable year under Section 203(a)(2)(D-17) for
19        interest paid, accrued, or incurred, directly or
20        indirectly, to the same person. This subparagraph (DD)
21        is exempt from the provisions of Section 250;
22            (EE) An amount equal to the income from intangible
23        property taken into account for the taxable year (net
24        of the deductions allocable thereto) with respect to
25        transactions with (i) a foreign person who would be a
26        member of the taxpayer's unitary business group but for

 

 

HB4300- 51 -LRB099 14379 HLH 38474 b

1        the fact that the foreign person's business activity
2        outside the United States is 80% or more of that
3        person's total business activity and (ii) for taxable
4        years ending on or after December 31, 2008, to a person
5        who would be a member of the same unitary business
6        group but for the fact that the person is prohibited
7        under Section 1501(a)(27) from being included in the
8        unitary business group because he or she is ordinarily
9        required to apportion business income under different
10        subsections of Section 304, but not to exceed the
11        addition modification required to be made for the same
12        taxable year under Section 203(a)(2)(D-18) for
13        intangible expenses and costs paid, accrued, or
14        incurred, directly or indirectly, to the same foreign
15        person. This subparagraph (EE) is exempt from the
16        provisions of Section 250;
17            (FF) An amount equal to any amount awarded to the
18        taxpayer during the taxable year by the Court of Claims
19        under subsection (c) of Section 8 of the Court of
20        Claims Act for time unjustly served in a State prison.
21        This subparagraph (FF) is exempt from the provisions of
22        Section 250; and
23            (GG) For taxable years ending on or after December
24        31, 2011, in the case of a taxpayer who was required to
25        add back any insurance premiums under Section
26        203(a)(2)(D-19), such taxpayer may elect to subtract

 

 

HB4300- 52 -LRB099 14379 HLH 38474 b

1        that part of a reimbursement received from the
2        insurance company equal to the amount of the expense or
3        loss (including expenses incurred by the insurance
4        company) that would have been taken into account as a
5        deduction for federal income tax purposes if the
6        expense or loss had been uninsured. If a taxpayer makes
7        the election provided for by this subparagraph (GG),
8        the insurer to which the premiums were paid must add
9        back to income the amount subtracted by the taxpayer
10        pursuant to this subparagraph (GG). This subparagraph
11        (GG) is exempt from the provisions of Section 250.
 
12    (b) Corporations.
13        (1) In general. In the case of a corporation, base
14    income means an amount equal to the taxpayer's taxable
15    income for the taxable year as modified by paragraph (2).
16        (2) Modifications. The taxable income referred to in
17    paragraph (1) shall be modified by adding thereto the sum
18    of the following amounts:
19            (A) An amount equal to all amounts paid or accrued
20        to the taxpayer as interest and all distributions
21        received from regulated investment companies during
22        the taxable year to the extent excluded from gross
23        income in the computation of taxable income;
24            (B) An amount equal to the amount of tax imposed by
25        this Act to the extent deducted from gross income in

 

 

HB4300- 53 -LRB099 14379 HLH 38474 b

1        the computation of taxable income for the taxable year;
2            (C) In the case of a regulated investment company,
3        an amount equal to the excess of (i) the net long-term
4        capital gain for the taxable year, over (ii) the amount
5        of the capital gain dividends designated as such in
6        accordance with Section 852(b)(3)(C) of the Internal
7        Revenue Code and any amount designated under Section
8        852(b)(3)(D) of the Internal Revenue Code,
9        attributable to the taxable year (this amendatory Act
10        of 1995 (Public Act 89-89) is declarative of existing
11        law and is not a new enactment);
12            (D) The amount of any net operating loss deduction
13        taken in arriving at taxable income, other than a net
14        operating loss carried forward from a taxable year
15        ending prior to December 31, 1986;
16            (E) For taxable years in which a net operating loss
17        carryback or carryforward from a taxable year ending
18        prior to December 31, 1986 is an element of taxable
19        income under paragraph (1) of subsection (e) or
20        subparagraph (E) of paragraph (2) of subsection (e),
21        the amount by which addition modifications other than
22        those provided by this subparagraph (E) exceeded
23        subtraction modifications in such earlier taxable
24        year, with the following limitations applied in the
25        order that they are listed:
26                (i) the addition modification relating to the

 

 

HB4300- 54 -LRB099 14379 HLH 38474 b

1            net operating loss carried back or forward to the
2            taxable year from any taxable year ending prior to
3            December 31, 1986 shall be reduced by the amount of
4            addition modification under this subparagraph (E)
5            which related to that net operating loss and which
6            was taken into account in calculating the base
7            income of an earlier taxable year, and
8                (ii) the addition modification relating to the
9            net operating loss carried back or forward to the
10            taxable year from any taxable year ending prior to
11            December 31, 1986 shall not exceed the amount of
12            such carryback or carryforward;
13            For taxable years in which there is a net operating
14        loss carryback or carryforward from more than one other
15        taxable year ending prior to December 31, 1986, the
16        addition modification provided in this subparagraph
17        (E) shall be the sum of the amounts computed
18        independently under the preceding provisions of this
19        subparagraph (E) for each such taxable year;
20            (E-5) For taxable years ending after December 31,
21        1997, an amount equal to any eligible remediation costs
22        that the corporation deducted in computing adjusted
23        gross income and for which the corporation claims a
24        credit under subsection (l) of Section 201;
25            (E-10) For taxable years 2001 and thereafter, an
26        amount equal to the bonus depreciation deduction taken

 

 

HB4300- 55 -LRB099 14379 HLH 38474 b

1        on the taxpayer's federal income tax return for the
2        taxable year under subsection (k) of Section 168 of the
3        Internal Revenue Code; except that, for taxable years
4        beginning on or after January 1, 2016, for property
5        acquired by purchase, as defined in subsection (d) of
6        Section 179 of the Internal Revenue Code, by a small
7        business, the modification shall be in an amount equal
8        to the depreciation deduction taken on the taxpayer's
9        federal income tax return for property that is
10        depreciable pursuant to Section 167 of the Internal
11        Revenue Code; for purposes of this paragraph (E-10),
12        "small business" means an individual sole proprietor,
13        corporation, trust, or partnership, including its
14        affiliates, that is independently owned and operated,
15        not dominant in its field, and has average gross annual
16        sales for the taxable year and the 2 previous taxable
17        years of less than $10,000,000;
18            (E-11) If the taxpayer sells, transfers, abandons,
19        or otherwise disposes of property for which the
20        taxpayer was required in any taxable year to make an
21        addition modification under subparagraph (E-10), then
22        an amount equal to the aggregate amount of the
23        deductions taken in all taxable years under
24        subparagraph (T) with respect to that property.
25            If the taxpayer continues to own property through
26        the last day of the last tax year for which the

 

 

HB4300- 56 -LRB099 14379 HLH 38474 b

1        taxpayer may claim a depreciation deduction for
2        federal income tax purposes and for which the taxpayer
3        was allowed in any taxable year to make a subtraction
4        modification under subparagraph (T), then an amount
5        equal to that subtraction modification.
6            The taxpayer is required to make the addition
7        modification under this subparagraph only once with
8        respect to any one piece of property;
9            (E-12) An amount equal to the amount otherwise
10        allowed as a deduction in computing base income for
11        interest paid, accrued, or incurred, directly or
12        indirectly, (i) for taxable years ending on or after
13        December 31, 2004, to a foreign person who would be a
14        member of the same unitary business group but for the
15        fact the foreign person's business activity outside
16        the United States is 80% or more of the foreign
17        person's total business activity and (ii) for taxable
18        years ending on or after December 31, 2008, to a person
19        who would be a member of the same unitary business
20        group but for the fact that the person is prohibited
21        under Section 1501(a)(27) from being included in the
22        unitary business group because he or she is ordinarily
23        required to apportion business income under different
24        subsections of Section 304. The addition modification
25        required by this subparagraph shall be reduced to the
26        extent that dividends were included in base income of

 

 

HB4300- 57 -LRB099 14379 HLH 38474 b

1        the unitary group for the same taxable year and
2        received by the taxpayer or by a member of the
3        taxpayer's unitary business group (including amounts
4        included in gross income pursuant to Sections 951
5        through 964 of the Internal Revenue Code and amounts
6        included in gross income under Section 78 of the
7        Internal Revenue Code) with respect to the stock of the
8        same person to whom the interest was paid, accrued, or
9        incurred.
10            This paragraph shall not apply to the following:
11                (i) an item of interest paid, accrued, or
12            incurred, directly or indirectly, to a person who
13            is subject in a foreign country or state, other
14            than a state which requires mandatory unitary
15            reporting, to a tax on or measured by net income
16            with respect to such interest; or
17                (ii) an item of interest paid, accrued, or
18            incurred, directly or indirectly, to a person if
19            the taxpayer can establish, based on a
20            preponderance of the evidence, both of the
21            following:
22                    (a) the person, during the same taxable
23                year, paid, accrued, or incurred, the interest
24                to a person that is not a related member, and
25                    (b) the transaction giving rise to the
26                interest expense between the taxpayer and the

 

 

HB4300- 58 -LRB099 14379 HLH 38474 b

1                person did not have as a principal purpose the
2                avoidance of Illinois income tax, and is paid
3                pursuant to a contract or agreement that
4                reflects an arm's-length interest rate and
5                terms; or
6                (iii) the taxpayer can establish, based on
7            clear and convincing evidence, that the interest
8            paid, accrued, or incurred relates to a contract or
9            agreement entered into at arm's-length rates and
10            terms and the principal purpose for the payment is
11            not federal or Illinois tax avoidance; or
12                (iv) an item of interest paid, accrued, or
13            incurred, directly or indirectly, to a person if
14            the taxpayer establishes by clear and convincing
15            evidence that the adjustments are unreasonable; or
16            if the taxpayer and the Director agree in writing
17            to the application or use of an alternative method
18            of apportionment under Section 304(f).
19                Nothing in this subsection shall preclude the
20            Director from making any other adjustment
21            otherwise allowed under Section 404 of this Act for
22            any tax year beginning after the effective date of
23            this amendment provided such adjustment is made
24            pursuant to regulation adopted by the Department
25            and such regulations provide methods and standards
26            by which the Department will utilize its authority

 

 

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1            under Section 404 of this Act;
2            (E-13) An amount equal to the amount of intangible
3        expenses and costs otherwise allowed as a deduction in
4        computing base income, and that were paid, accrued, or
5        incurred, directly or indirectly, (i) for taxable
6        years ending on or after December 31, 2004, to a
7        foreign person who would be a member of the same
8        unitary business group but for the fact that the
9        foreign person's business activity outside the United
10        States is 80% or more of that person's total business
11        activity and (ii) for taxable years ending on or after
12        December 31, 2008, to a person who would be a member of
13        the same unitary business group but for the fact that
14        the person is prohibited under Section 1501(a)(27)
15        from being included in the unitary business group
16        because he or she is ordinarily required to apportion
17        business income under different subsections of Section
18        304. The addition modification required by this
19        subparagraph shall be reduced to the extent that
20        dividends were included in base income of the unitary
21        group for the same taxable year and received by the
22        taxpayer or by a member of the taxpayer's unitary
23        business group (including amounts included in gross
24        income pursuant to Sections 951 through 964 of the
25        Internal Revenue Code and amounts included in gross
26        income under Section 78 of the Internal Revenue Code)

 

 

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1        with respect to the stock of the same person to whom
2        the intangible expenses and costs were directly or
3        indirectly paid, incurred, or accrued. The preceding
4        sentence shall not apply to the extent that the same
5        dividends caused a reduction to the addition
6        modification required under Section 203(b)(2)(E-12) of
7        this Act. As used in this subparagraph, the term
8        "intangible expenses and costs" includes (1) expenses,
9        losses, and costs for, or related to, the direct or
10        indirect acquisition, use, maintenance or management,
11        ownership, sale, exchange, or any other disposition of
12        intangible property; (2) losses incurred, directly or
13        indirectly, from factoring transactions or discounting
14        transactions; (3) royalty, patent, technical, and
15        copyright fees; (4) licensing fees; and (5) other
16        similar expenses and costs. For purposes of this
17        subparagraph, "intangible property" includes patents,
18        patent applications, trade names, trademarks, service
19        marks, copyrights, mask works, trade secrets, and
20        similar types of intangible assets.
21            This paragraph shall not apply to the following:
22                (i) any item of intangible expenses or costs
23            paid, accrued, or incurred, directly or
24            indirectly, from a transaction with a person who is
25            subject in a foreign country or state, other than a
26            state which requires mandatory unitary reporting,

 

 

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1            to a tax on or measured by net income with respect
2            to such item; or
3                (ii) any item of intangible expense or cost
4            paid, accrued, or incurred, directly or
5            indirectly, if the taxpayer can establish, based
6            on a preponderance of the evidence, both of the
7            following:
8                    (a) the person during the same taxable
9                year paid, accrued, or incurred, the
10                intangible expense or cost to a person that is
11                not a related member, and
12                    (b) the transaction giving rise to the
13                intangible expense or cost between the
14                taxpayer and the person did not have as a
15                principal purpose the avoidance of Illinois
16                income tax, and is paid pursuant to a contract
17                or agreement that reflects arm's-length terms;
18                or
19                (iii) any item of intangible expense or cost
20            paid, accrued, or incurred, directly or
21            indirectly, from a transaction with a person if the
22            taxpayer establishes by clear and convincing
23            evidence, that the adjustments are unreasonable;
24            or if the taxpayer and the Director agree in
25            writing to the application or use of an alternative
26            method of apportionment under Section 304(f);

 

 

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1                Nothing in this subsection shall preclude the
2            Director from making any other adjustment
3            otherwise allowed under Section 404 of this Act for
4            any tax year beginning after the effective date of
5            this amendment provided such adjustment is made
6            pursuant to regulation adopted by the Department
7            and such regulations provide methods and standards
8            by which the Department will utilize its authority
9            under Section 404 of this Act;
10            (E-14) For taxable years ending on or after
11        December 31, 2008, an amount equal to the amount of
12        insurance premium expenses and costs otherwise allowed
13        as a deduction in computing base income, and that were
14        paid, accrued, or incurred, directly or indirectly, to
15        a person who would be a member of the same unitary
16        business group but for the fact that the person is
17        prohibited under Section 1501(a)(27) from being
18        included in the unitary business group because he or
19        she is ordinarily required to apportion business
20        income under different subsections of Section 304. The
21        addition modification required by this subparagraph
22        shall be reduced to the extent that dividends were
23        included in base income of the unitary group for the
24        same taxable year and received by the taxpayer or by a
25        member of the taxpayer's unitary business group
26        (including amounts included in gross income under

 

 

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1        Sections 951 through 964 of the Internal Revenue Code
2        and amounts included in gross income under Section 78
3        of the Internal Revenue Code) with respect to the stock
4        of the same person to whom the premiums and costs were
5        directly or indirectly paid, incurred, or accrued. The
6        preceding sentence does not apply to the extent that
7        the same dividends caused a reduction to the addition
8        modification required under Section 203(b)(2)(E-12) or
9        Section 203(b)(2)(E-13) of this Act;
10            (E-15) For taxable years beginning after December
11        31, 2008, any deduction for dividends paid by a captive
12        real estate investment trust that is allowed to a real
13        estate investment trust under Section 857(b)(2)(B) of
14        the Internal Revenue Code for dividends paid;
15            (E-16) An amount equal to the credit allowable to
16        the taxpayer under Section 218(a) of this Act,
17        determined without regard to Section 218(c) of this
18        Act;
19            (E-17) For taxable years ending on or after
20        December 31, 2015, an amount equal to the deduction
21        allowed under Section 199 of the Internal Revenue Code
22        for the taxable year;
23            (E-18) For taxable years ending on or after
24        December 31, 2015, any deduction allowed to the
25        taxpayer under Sections 243 through 246A of the
26        Internal Revenue Code;

 

 

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1    and by deducting from the total so obtained the sum of the
2    following amounts:
3            (F) An amount equal to the amount of any tax
4        imposed by this Act which was refunded to the taxpayer
5        and included in such total for the taxable year;
6            (G) An amount equal to any amount included in such
7        total under Section 78 of the Internal Revenue Code;
8            (H) In the case of a regulated investment company,
9        an amount equal to the amount of exempt interest
10        dividends as defined in subsection (b) (5) of Section
11        852 of the Internal Revenue Code, paid to shareholders
12        for the taxable year;
13            (I) With the exception of any amounts subtracted
14        under subparagraph (J), an amount equal to the sum of
15        all amounts disallowed as deductions by (i) Sections
16        171(a) (2), and 265(a)(2) and amounts disallowed as
17        interest expense by Section 291(a)(3) of the Internal
18        Revenue Code, and all amounts of expenses allocable to
19        interest and disallowed as deductions by Section
20        265(a)(1) of the Internal Revenue Code; and (ii) for
21        taxable years ending on or after August 13, 1999,
22        Sections 171(a)(2), 265, 280C, 291(a)(3), and
23        832(b)(5)(B)(i) of the Internal Revenue Code, plus,
24        for tax years ending on or after December 31, 2011,
25        amounts disallowed as deductions by Section 45G(e)(3)
26        of the Internal Revenue Code and, for taxable years

 

 

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1        ending on or after December 31, 2008, any amount
2        included in gross income under Section 87 of the
3        Internal Revenue Code and the policyholders' share of
4        tax-exempt interest of a life insurance company under
5        Section 807(a)(2)(B) of the Internal Revenue Code (in
6        the case of a life insurance company with gross income
7        from a decrease in reserves for the tax year) or
8        Section 807(b)(1)(B) of the Internal Revenue Code (in
9        the case of a life insurance company allowed a
10        deduction for an increase in reserves for the tax
11        year); the provisions of this subparagraph are exempt
12        from the provisions of Section 250;
13            (J) An amount equal to all amounts included in such
14        total which are exempt from taxation by this State
15        either by reason of its statutes or Constitution or by
16        reason of the Constitution, treaties or statutes of the
17        United States; provided that, in the case of any
18        statute of this State that exempts income derived from
19        bonds or other obligations from the tax imposed under
20        this Act, the amount exempted shall be the interest net
21        of bond premium amortization;
22            (K) An amount equal to those dividends included in
23        such total which were paid by a corporation which
24        conducts business operations in a River Edge
25        Redevelopment Zone or zones created under the River
26        Edge Redevelopment Zone Act and conducts substantially

 

 

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1        all of its operations in a River Edge Redevelopment
2        Zone or zones. This subparagraph (K) is exempt from the
3        provisions of Section 250;
4            (L) An amount equal to those dividends included in
5        such total that were paid by a corporation that
6        conducts business operations in a federally designated
7        Foreign Trade Zone or Sub-Zone and that is designated a
8        High Impact Business located in Illinois; provided
9        that dividends eligible for the deduction provided in
10        subparagraph (K) of paragraph 2 of this subsection
11        shall not be eligible for the deduction provided under
12        this subparagraph (L);
13            (M) For any taxpayer that is a financial
14        organization within the meaning of Section 304(c) of
15        this Act, an amount included in such total as interest
16        income from a loan or loans made by such taxpayer to a
17        borrower, to the extent that such a loan is secured by
18        property which is eligible for the River Edge
19        Redevelopment Zone Investment Credit. To determine the
20        portion of a loan or loans that is secured by property
21        eligible for a Section 201(f) investment credit to the
22        borrower, the entire principal amount of the loan or
23        loans between the taxpayer and the borrower should be
24        divided into the basis of the Section 201(f) investment
25        credit property which secures the loan or loans, using
26        for this purpose the original basis of such property on

 

 

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1        the date that it was placed in service in the River
2        Edge Redevelopment Zone. The subtraction modification
3        available to taxpayer in any year under this subsection
4        shall be that portion of the total interest paid by the
5        borrower with respect to such loan attributable to the
6        eligible property as calculated under the previous
7        sentence. This subparagraph (M) is exempt from the
8        provisions of Section 250;
9            (M-1) For any taxpayer that is a financial
10        organization within the meaning of Section 304(c) of
11        this Act, an amount included in such total as interest
12        income from a loan or loans made by such taxpayer to a
13        borrower, to the extent that such a loan is secured by
14        property which is eligible for the High Impact Business
15        Investment Credit. To determine the portion of a loan
16        or loans that is secured by property eligible for a
17        Section 201(h) investment credit to the borrower, the
18        entire principal amount of the loan or loans between
19        the taxpayer and the borrower should be divided into
20        the basis of the Section 201(h) investment credit
21        property which secures the loan or loans, using for
22        this purpose the original basis of such property on the
23        date that it was placed in service in a federally
24        designated Foreign Trade Zone or Sub-Zone located in
25        Illinois. No taxpayer that is eligible for the
26        deduction provided in subparagraph (M) of paragraph

 

 

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1        (2) of this subsection shall be eligible for the
2        deduction provided under this subparagraph (M-1). The
3        subtraction modification available to taxpayers in any
4        year under this subsection shall be that portion of the
5        total interest paid by the borrower with respect to
6        such loan attributable to the eligible property as
7        calculated under the previous sentence;
8            (N) Two times any contribution made during the
9        taxable year to a designated zone organization to the
10        extent that the contribution (i) qualifies as a
11        charitable contribution under subsection (c) of
12        Section 170 of the Internal Revenue Code and (ii) must,
13        by its terms, be used for a project approved by the
14        Department of Commerce and Economic Opportunity under
15        Section 11 of the Illinois Enterprise Zone Act or under
16        Section 10-10 of the River Edge Redevelopment Zone Act.
17        This subparagraph (N) is exempt from the provisions of
18        Section 250;
19            (O) An amount equal to: (i) 85% for taxable years
20        ending on or before December 31, 1992, or, a percentage
21        equal to the percentage allowable under Section
22        243(a)(1) of the Internal Revenue Code of 1986 for
23        taxable years ending after December 31, 1992, of the
24        amount by which dividends included in taxable income
25        and received from a corporation that is not created or
26        organized under the laws of the United States or any

 

 

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1        state or political subdivision thereof, including, for
2        taxable years ending on or after December 31, 1988,
3        dividends received or deemed received or paid or deemed
4        paid under Sections 951 through 965 of the Internal
5        Revenue Code, exceed the amount of the modification
6        provided under subparagraph (G) of paragraph (2) of
7        this subsection (b) which is related to such dividends,
8        and including, for taxable years ending on or after
9        December 31, 2008, dividends received from a captive
10        real estate investment trust; plus (ii) 100% of the
11        amount by which dividends, included in taxable income
12        and received, including, for taxable years ending on or
13        after December 31, 1988, dividends received or deemed
14        received or paid or deemed paid under Sections 951
15        through 964 of the Internal Revenue Code and including,
16        for taxable years ending on or after December 31, 2008,
17        dividends received from a captive real estate
18        investment trust, from any such corporation specified
19        in clause (i) that would but for the provisions of
20        Section 1504 (b) (3) of the Internal Revenue Code be
21        treated as a member of the affiliated group which
22        includes the dividend recipient, exceed the amount of
23        the modification provided under subparagraph (G) of
24        paragraph (2) of this subsection (b) which is related
25        to such dividends. This subparagraph (O) shall not
26        apply to taxable years ending on or after December 31,

 

 

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1        2015 is exempt from the provisions of Section 250 of
2        this Act;
3            (P) An amount equal to any contribution made to a
4        job training project established pursuant to the Tax
5        Increment Allocation Redevelopment Act;
6            (Q) An amount equal to the amount of the deduction
7        used to compute the federal income tax credit for
8        restoration of substantial amounts held under claim of
9        right for the taxable year pursuant to Section 1341 of
10        the Internal Revenue Code;
11            (R) On and after July 20, 1999, in the case of an
12        attorney-in-fact with respect to whom an interinsurer
13        or a reciprocal insurer has made the election under
14        Section 835 of the Internal Revenue Code, 26 U.S.C.
15        835, an amount equal to the excess, if any, of the
16        amounts paid or incurred by that interinsurer or
17        reciprocal insurer in the taxable year to the
18        attorney-in-fact over the deduction allowed to that
19        interinsurer or reciprocal insurer with respect to the
20        attorney-in-fact under Section 835(b) of the Internal
21        Revenue Code for the taxable year; the provisions of
22        this subparagraph are exempt from the provisions of
23        Section 250;
24            (S) For taxable years ending on or after December
25        31, 1997, in the case of a Subchapter S corporation, an
26        amount equal to all amounts of income allocable to a

 

 

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1        shareholder subject to the Personal Property Tax
2        Replacement Income Tax imposed by subsections (c) and
3        (d) of Section 201 of this Act, including amounts
4        allocable to organizations exempt from federal income
5        tax by reason of Section 501(a) of the Internal Revenue
6        Code. This subparagraph (S) is exempt from the
7        provisions of Section 250;
8            (T) For taxable years 2001 and thereafter, for the
9        taxable year in which the bonus depreciation deduction
10        is taken on the taxpayer's federal income tax return
11        under subsection (k) of Section 168 of the Internal
12        Revenue Code and for each applicable taxable year
13        thereafter, an amount equal to "x", where:
14                (1) "y" equals the amount of the depreciation
15            deduction taken for the taxable year on the
16            taxpayer's federal income tax return on property
17            for which the bonus depreciation deduction was
18            taken in any year under subsection (k) of Section
19            168 of the Internal Revenue Code, but not including
20            the bonus depreciation deduction;
21                (2) for taxable years ending on or before
22            December 31, 2005, "x" equals "y" multiplied by 30
23            and then divided by 70 (or "y" multiplied by
24            0.429); and
25                (3) for taxable years ending after December
26            31, 2005:

 

 

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1                    (i) for property on which a bonus
2                depreciation deduction of 30% of the adjusted
3                basis was taken, "x" equals "y" multiplied by
4                30 and then divided by 70 (or "y" multiplied by
5                0.429); and
6                    (ii) for property on which a bonus
7                depreciation deduction of 50% of the adjusted
8                basis was taken, "x" equals "y" multiplied by
9                1.0; and .
10                (4) for taxable years beginning on and after
11            January 1, 2016, in the case of a small business,
12            for property acquired by purchase as defined in
13            subsection (d) of Section 179 of the Internal
14            Revenue Code, "x" equals the basis of the property
15            used to compute the depreciation deduction for
16            federal income tax purposes; for purposes of this
17            paragraph (T)(4), "small business" means an
18            individual sole proprietor, corporation, trust, or
19            partnership, including its affiliates, that is
20            independently owned and operated, not dominant in
21            its field, and has average gross annual sales for
22            the taxable year and the 2 previous taxable years
23            of less than $10,000,000.
24            The aggregate amount deducted under this
25        subparagraph in all taxable years for any one piece of
26        property may not exceed the amount of the bonus

 

 

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1        depreciation deduction taken on that property on the
2        taxpayer's federal income tax return under subsection
3        (k) of Section 168 of the Internal Revenue Code. This
4        subparagraph (T) is exempt from the provisions of
5        Section 250;
6            (U) If the taxpayer sells, transfers, abandons, or
7        otherwise disposes of property for which the taxpayer
8        was required in any taxable year to make an addition
9        modification under subparagraph (E-10), then an amount
10        equal to that addition modification.
11            If the taxpayer continues to own property through
12        the last day of the last tax year for which the
13        taxpayer may claim a depreciation deduction for
14        federal income tax purposes and for which the taxpayer
15        was required in any taxable year to make an addition
16        modification under subparagraph (E-10), then an amount
17        equal to that addition modification.
18            The taxpayer is allowed to take the deduction under
19        this subparagraph only once with respect to any one
20        piece of property.
21            This subparagraph (U) is exempt from the
22        provisions of Section 250;
23            (V) The amount of: (i) any interest income (net of
24        the deductions allocable thereto) taken into account
25        for the taxable year with respect to a transaction with
26        a taxpayer that is required to make an addition

 

 

HB4300- 74 -LRB099 14379 HLH 38474 b

1        modification with respect to such transaction under
2        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
3        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
4        the amount of such addition modification, (ii) any
5        income from intangible property (net of the deductions
6        allocable thereto) taken into account for the taxable
7        year with respect to a transaction with a taxpayer that
8        is required to make an addition modification with
9        respect to such transaction under Section
10        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
11        203(d)(2)(D-8), but not to exceed the amount of such
12        addition modification, and (iii) any insurance premium
13        income (net of deductions allocable thereto) taken
14        into account for the taxable year with respect to a
15        transaction with a taxpayer that is required to make an
16        addition modification with respect to such transaction
17        under Section 203(a)(2)(D-19), Section
18        203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section
19        203(d)(2)(D-9), but not to exceed the amount of that
20        addition modification. This subparagraph (V) is exempt
21        from the provisions of Section 250;
22            (W) An amount equal to the interest income taken
23        into account for the taxable year (net of the
24        deductions allocable thereto) with respect to
25        transactions with (i) a foreign person who would be a
26        member of the taxpayer's unitary business group but for

 

 

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1        the fact that the foreign person's business activity
2        outside the United States is 80% or more of that
3        person's total business activity and (ii) for taxable
4        years ending on or after December 31, 2008, to a person
5        who would be a member of the same unitary business
6        group but for the fact that the person is prohibited
7        under Section 1501(a)(27) from being included in the
8        unitary business group because he or she is ordinarily
9        required to apportion business income under different
10        subsections of Section 304, but not to exceed the
11        addition modification required to be made for the same
12        taxable year under Section 203(b)(2)(E-12) for
13        interest paid, accrued, or incurred, directly or
14        indirectly, to the same person. This subparagraph (W)
15        is exempt from the provisions of Section 250;
16            (X) An amount equal to the income from intangible
17        property taken into account for the taxable year (net
18        of the deductions allocable thereto) with respect to
19        transactions with (i) a foreign person who would be a
20        member of the taxpayer's unitary business group but for
21        the fact that the foreign person's business activity
22        outside the United States is 80% or more of that
23        person's total business activity and (ii) for taxable
24        years ending on or after December 31, 2008, to a person
25        who would be a member of the same unitary business
26        group but for the fact that the person is prohibited

 

 

HB4300- 76 -LRB099 14379 HLH 38474 b

1        under Section 1501(a)(27) from being included in the
2        unitary business group because he or she is ordinarily
3        required to apportion business income under different
4        subsections of Section 304, but not to exceed the
5        addition modification required to be made for the same
6        taxable year under Section 203(b)(2)(E-13) for
7        intangible expenses and costs paid, accrued, or
8        incurred, directly or indirectly, to the same foreign
9        person. This subparagraph (X) is exempt from the
10        provisions of Section 250;
11            (Y) For taxable years ending on or after December
12        31, 2011, in the case of a taxpayer who was required to
13        add back any insurance premiums under Section
14        203(b)(2)(E-14), such taxpayer may elect to subtract
15        that part of a reimbursement received from the
16        insurance company equal to the amount of the expense or
17        loss (including expenses incurred by the insurance
18        company) that would have been taken into account as a
19        deduction for federal income tax purposes if the
20        expense or loss had been uninsured. If a taxpayer makes
21        the election provided for by this subparagraph (Y), the
22        insurer to which the premiums were paid must add back
23        to income the amount subtracted by the taxpayer
24        pursuant to this subparagraph (Y). This subparagraph
25        (Y) is exempt from the provisions of Section 250; and
26            (Z) The difference between the nondeductible

 

 

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1        controlled foreign corporation dividends under Section
2        965(e)(3) of the Internal Revenue Code over the taxable
3        income of the taxpayer, computed without regard to
4        Section 965(e)(2)(A) of the Internal Revenue Code, and
5        without regard to any net operating loss deduction.
6        This subparagraph (Z) is exempt from the provisions of
7        Section 250.
8        (3) Special rule. For purposes of paragraph (2) (A),
9    "gross income" in the case of a life insurance company, for
10    tax years ending on and after December 31, 1994, and prior
11    to December 31, 2011, shall mean the gross investment
12    income for the taxable year and, for tax years ending on or
13    after December 31, 2011, shall mean all amounts included in
14    life insurance gross income under Section 803(a)(3) of the
15    Internal Revenue Code.
 
16    (c) Trusts and estates.
17        (1) In general. In the case of a trust or estate, base
18    income means an amount equal to the taxpayer's taxable
19    income for the taxable year as modified by paragraph (2).
20        (2) Modifications. Subject to the provisions of
21    paragraph (3), the taxable income referred to in paragraph
22    (1) shall be modified by adding thereto the sum of the
23    following amounts:
24            (A) An amount equal to all amounts paid or accrued
25        to the taxpayer as interest or dividends during the

 

 

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1        taxable year to the extent excluded from gross income
2        in the computation of taxable income;
3            (B) In the case of (i) an estate, $600; (ii) a
4        trust which, under its governing instrument, is
5        required to distribute all of its income currently,
6        $300; and (iii) any other trust, $100, but in each such
7        case, only to the extent such amount was deducted in
8        the computation of taxable income;
9            (C) An amount equal to the amount of tax imposed by
10        this Act to the extent deducted from gross income in
11        the computation of taxable income for the taxable year;
12            (D) The amount of any net operating loss deduction
13        taken in arriving at taxable income, other than a net
14        operating loss carried forward from a taxable year
15        ending prior to December 31, 1986;
16            (E) For taxable years in which a net operating loss
17        carryback or carryforward from a taxable year ending
18        prior to December 31, 1986 is an element of taxable
19        income under paragraph (1) of subsection (e) or
20        subparagraph (E) of paragraph (2) of subsection (e),
21        the amount by which addition modifications other than
22        those provided by this subparagraph (E) exceeded
23        subtraction modifications in such taxable year, with
24        the following limitations applied in the order that
25        they are listed:
26                (i) the addition modification relating to the

 

 

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1            net operating loss carried back or forward to the
2            taxable year from any taxable year ending prior to
3            December 31, 1986 shall be reduced by the amount of
4            addition modification under this subparagraph (E)
5            which related to that net operating loss and which
6            was taken into account in calculating the base
7            income of an earlier taxable year, and
8                (ii) the addition modification relating to the
9            net operating loss carried back or forward to the
10            taxable year from any taxable year ending prior to
11            December 31, 1986 shall not exceed the amount of
12            such carryback or carryforward;
13            For taxable years in which there is a net operating
14        loss carryback or carryforward from more than one other
15        taxable year ending prior to December 31, 1986, the
16        addition modification provided in this subparagraph
17        (E) shall be the sum of the amounts computed
18        independently under the preceding provisions of this
19        subparagraph (E) for each such taxable year;
20            (F) For taxable years ending on or after January 1,
21        1989, an amount equal to the tax deducted pursuant to
22        Section 164 of the Internal Revenue Code if the trust
23        or estate is claiming the same tax for purposes of the
24        Illinois foreign tax credit under Section 601 of this
25        Act;
26            (G) An amount equal to the amount of the capital

 

 

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1        gain deduction allowable under the Internal Revenue
2        Code, to the extent deducted from gross income in the
3        computation of taxable income;
4            (G-5) For taxable years ending after December 31,
5        1997, an amount equal to any eligible remediation costs
6        that the trust or estate deducted in computing adjusted
7        gross income and for which the trust or estate claims a
8        credit under subsection (l) of Section 201;
9            (G-10) For taxable years 2001 and thereafter, an
10        amount equal to the bonus depreciation deduction taken
11        on the taxpayer's federal income tax return for the
12        taxable year under subsection (k) of Section 168 of the
13        Internal Revenue Code; except that, for taxable years
14        beginning on or after January 1, 2016, for property
15        acquired by purchase, as defined in subsection (d) of
16        Section 179 of the Internal Revenue Code, by a small
17        business, the modification shall be in an amount equal
18        to the depreciation deduction taken on the taxpayer's
19        federal income tax return for property that is
20        depreciable pursuant to Section 167 of the Internal
21        Revenue Code; for purposes of this paragraph (G-10),
22        "small business" means an individual sole proprietor,
23        corporation, trust, or partnership, including its
24        affiliates, that is independently owned and operated,
25        not dominant in its field, and has average gross annual
26        sales for the taxable year and the 2 previous taxable

 

 

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1        years of less than $10,000,000; and
2            (G-11) If the taxpayer sells, transfers, abandons,
3        or otherwise disposes of property for which the
4        taxpayer was required in any taxable year to make an
5        addition modification under subparagraph (G-10), then
6        an amount equal to the aggregate amount of the
7        deductions taken in all taxable years under
8        subparagraph (R) with respect to that property.
9            If the taxpayer continues to own property through
10        the last day of the last tax year for which the
11        taxpayer may claim a depreciation deduction for
12        federal income tax purposes and for which the taxpayer
13        was allowed in any taxable year to make a subtraction
14        modification under subparagraph (R), then an amount
15        equal to that subtraction modification.
16            The taxpayer is required to make the addition
17        modification under this subparagraph only once with
18        respect to any one piece of property;
19            (G-12) An amount equal to the amount otherwise
20        allowed as a deduction in computing base income for
21        interest paid, accrued, or incurred, directly or
22        indirectly, (i) for taxable years ending on or after
23        December 31, 2004, to a foreign person who would be a
24        member of the same unitary business group but for the
25        fact that the foreign person's business activity
26        outside the United States is 80% or more of the foreign

 

 

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1        person's total business activity and (ii) for taxable
2        years ending on or after December 31, 2008, to a person
3        who would be a member of the same unitary business
4        group but for the fact that the person is prohibited
5        under Section 1501(a)(27) from being included in the
6        unitary business group because he or she is ordinarily
7        required to apportion business income under different
8        subsections of Section 304. The addition modification
9        required by this subparagraph shall be reduced to the
10        extent that dividends were included in base income of
11        the unitary group for the same taxable year and
12        received by the taxpayer or by a member of the
13        taxpayer's unitary business group (including amounts
14        included in gross income pursuant to Sections 951
15        through 964 of the Internal Revenue Code and amounts
16        included in gross income under Section 78 of the
17        Internal Revenue Code) with respect to the stock of the
18        same person to whom the interest was paid, accrued, or
19        incurred.
20            This paragraph shall not apply to the following:
21                (i) an item of interest paid, accrued, or
22            incurred, directly or indirectly, to a person who
23            is subject in a foreign country or state, other
24            than a state which requires mandatory unitary
25            reporting, to a tax on or measured by net income
26            with respect to such interest; or

 

 

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1                (ii) an item of interest paid, accrued, or
2            incurred, directly or indirectly, to a person if
3            the taxpayer can establish, based on a
4            preponderance of the evidence, both of the
5            following:
6                    (a) the person, during the same taxable
7                year, paid, accrued, or incurred, the interest
8                to a person that is not a related member, and
9                    (b) the transaction giving rise to the
10                interest expense between the taxpayer and the
11                person did not have as a principal purpose the
12                avoidance of Illinois income tax, and is paid
13                pursuant to a contract or agreement that
14                reflects an arm's-length interest rate and
15                terms; or
16                (iii) the taxpayer can establish, based on
17            clear and convincing evidence, that the interest
18            paid, accrued, or incurred relates to a contract or
19            agreement entered into at arm's-length rates and
20            terms and the principal purpose for the payment is
21            not federal or Illinois tax avoidance; or
22                (iv) an item of interest paid, accrued, or
23            incurred, directly or indirectly, to a person if
24            the taxpayer establishes by clear and convincing
25            evidence that the adjustments are unreasonable; or
26            if the taxpayer and the Director agree in writing

 

 

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1            to the application or use of an alternative method
2            of apportionment under Section 304(f).
3                Nothing in this subsection shall preclude the
4            Director from making any other adjustment
5            otherwise allowed under Section 404 of this Act for
6            any tax year beginning after the effective date of
7            this amendment provided such adjustment is made
8            pursuant to regulation adopted by the Department
9            and such regulations provide methods and standards
10            by which the Department will utilize its authority
11            under Section 404 of this Act;
12            (G-13) An amount equal to the amount of intangible
13        expenses and costs otherwise allowed as a deduction in
14        computing base income, and that were paid, accrued, or
15        incurred, directly or indirectly, (i) for taxable
16        years ending on or after December 31, 2004, to a
17        foreign person who would be a member of the same
18        unitary business group but for the fact that the
19        foreign person's business activity outside the United
20        States is 80% or more of that person's total business
21        activity and (ii) for taxable years ending on or after
22        December 31, 2008, to a person who would be a member of
23        the same unitary business group but for the fact that
24        the person is prohibited under Section 1501(a)(27)
25        from being included in the unitary business group
26        because he or she is ordinarily required to apportion

 

 

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1        business income under different subsections of Section
2        304. The addition modification required by this
3        subparagraph shall be reduced to the extent that
4        dividends were included in base income of the unitary
5        group for the same taxable year and received by the
6        taxpayer or by a member of the taxpayer's unitary
7        business group (including amounts included in gross
8        income pursuant to Sections 951 through 964 of the
9        Internal Revenue Code and amounts included in gross
10        income under Section 78 of the Internal Revenue Code)
11        with respect to the stock of the same person to whom
12        the intangible expenses and costs were directly or
13        indirectly paid, incurred, or accrued. The preceding
14        sentence shall not apply to the extent that the same
15        dividends caused a reduction to the addition
16        modification required under Section 203(c)(2)(G-12) of
17        this Act. As used in this subparagraph, the term
18        "intangible expenses and costs" includes: (1)
19        expenses, losses, and costs for or related to the
20        direct or indirect acquisition, use, maintenance or
21        management, ownership, sale, exchange, or any other
22        disposition of intangible property; (2) losses
23        incurred, directly or indirectly, from factoring
24        transactions or discounting transactions; (3) royalty,
25        patent, technical, and copyright fees; (4) licensing
26        fees; and (5) other similar expenses and costs. For

 

 

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1        purposes of this subparagraph, "intangible property"
2        includes patents, patent applications, trade names,
3        trademarks, service marks, copyrights, mask works,
4        trade secrets, and similar types of intangible assets.
5            This paragraph shall not apply to the following:
6                (i) any item of intangible expenses or costs
7            paid, accrued, or incurred, directly or
8            indirectly, from a transaction with a person who is
9            subject in a foreign country or state, other than a
10            state which requires mandatory unitary reporting,
11            to a tax on or measured by net income with respect
12            to such item; or
13                (ii) any item of intangible expense or cost
14            paid, accrued, or incurred, directly or
15            indirectly, if the taxpayer can establish, based
16            on a preponderance of the evidence, both of the
17            following:
18                    (a) the person during the same taxable
19                year paid, accrued, or incurred, the
20                intangible expense or cost to a person that is
21                not a related member, and
22                    (b) the transaction giving rise to the
23                intangible expense or cost between the
24                taxpayer and the person did not have as a
25                principal purpose the avoidance of Illinois
26                income tax, and is paid pursuant to a contract

 

 

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1                or agreement that reflects arm's-length terms;
2                or
3                (iii) any item of intangible expense or cost
4            paid, accrued, or incurred, directly or
5            indirectly, from a transaction with a person if the
6            taxpayer establishes by clear and convincing
7            evidence, that the adjustments are unreasonable;
8            or if the taxpayer and the Director agree in
9            writing to the application or use of an alternative
10            method of apportionment under Section 304(f);
11                Nothing in this subsection shall preclude the
12            Director from making any other adjustment
13            otherwise allowed under Section 404 of this Act for
14            any tax year beginning after the effective date of
15            this amendment provided such adjustment is made
16            pursuant to regulation adopted by the Department
17            and such regulations provide methods and standards
18            by which the Department will utilize its authority
19            under Section 404 of this Act;
20            (G-14) For taxable years ending on or after
21        December 31, 2008, an amount equal to the amount of
22        insurance premium expenses and costs otherwise allowed
23        as a deduction in computing base income, and that were
24        paid, accrued, or incurred, directly or indirectly, to
25        a person who would be a member of the same unitary
26        business group but for the fact that the person is

 

 

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1        prohibited under Section 1501(a)(27) from being
2        included in the unitary business group because he or
3        she is ordinarily required to apportion business
4        income under different subsections of Section 304. The
5        addition modification required by this subparagraph
6        shall be reduced to the extent that dividends were
7        included in base income of the unitary group for the
8        same taxable year and received by the taxpayer or by a
9        member of the taxpayer's unitary business group
10        (including amounts included in gross income under
11        Sections 951 through 964 of the Internal Revenue Code
12        and amounts included in gross income under Section 78
13        of the Internal Revenue Code) with respect to the stock
14        of the same person to whom the premiums and costs were
15        directly or indirectly paid, incurred, or accrued. The
16        preceding sentence does not apply to the extent that
17        the same dividends caused a reduction to the addition
18        modification required under Section 203(c)(2)(G-12) or
19        Section 203(c)(2)(G-13) of this Act;
20            (G-15) An amount equal to the credit allowable to
21        the taxpayer under Section 218(a) of this Act,
22        determined without regard to Section 218(c) of this
23        Act;
24            (G-16) For taxable years ending on or after
25        December 31, 2015, an amount equal to the deduction
26        allowed under Section 199 of the Internal Revenue Code

 

 

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1        for the taxable year;
2    and by deducting from the total so obtained the sum of the
3    following amounts:
4            (H) An amount equal to all amounts included in such
5        total pursuant to the provisions of Sections 402(a),
6        402(c), 403(a), 403(b), 406(a), 407(a) and 408 of the
7        Internal Revenue Code or included in such total as
8        distributions under the provisions of any retirement
9        or disability plan for employees of any governmental
10        agency or unit, or retirement payments to retired
11        partners, which payments are excluded in computing net
12        earnings from self employment by Section 1402 of the
13        Internal Revenue Code and regulations adopted pursuant
14        thereto;
15            (I) The valuation limitation amount;
16            (J) An amount equal to the amount of any tax
17        imposed by this Act which was refunded to the taxpayer
18        and included in such total for the taxable year;
19            (K) An amount equal to all amounts included in
20        taxable income as modified by subparagraphs (A), (B),
21        (C), (D), (E), (F) and (G) which are exempt from
22        taxation by this State either by reason of its statutes
23        or Constitution or by reason of the Constitution,
24        treaties or statutes of the United States; provided
25        that, in the case of any statute of this State that
26        exempts income derived from bonds or other obligations

 

 

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1        from the tax imposed under this Act, the amount
2        exempted shall be the interest net of bond premium
3        amortization;
4            (L) With the exception of any amounts subtracted
5        under subparagraph (K), an amount equal to the sum of
6        all amounts disallowed as deductions by (i) Sections
7        171(a) (2) and 265(a)(2) of the Internal Revenue Code,
8        and all amounts of expenses allocable to interest and
9        disallowed as deductions by Section 265(1) of the
10        Internal Revenue Code; and (ii) for taxable years
11        ending on or after August 13, 1999, Sections 171(a)(2),
12        265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue
13        Code, plus, (iii) for taxable years ending on or after
14        December 31, 2011, Section 45G(e)(3) of the Internal
15        Revenue Code and, for taxable years ending on or after
16        December 31, 2008, any amount included in gross income
17        under Section 87 of the Internal Revenue Code; the
18        provisions of this subparagraph are exempt from the
19        provisions of Section 250;
20            (M) An amount equal to those dividends included in
21        such total which were paid by a corporation which
22        conducts business operations in a River Edge
23        Redevelopment Zone or zones created under the River
24        Edge Redevelopment Zone Act and conducts substantially
25        all of its operations in a River Edge Redevelopment
26        Zone or zones. This subparagraph (M) is exempt from the

 

 

HB4300- 91 -LRB099 14379 HLH 38474 b

1        provisions of Section 250;
2            (N) An amount equal to any contribution made to a
3        job training project established pursuant to the Tax
4        Increment Allocation Redevelopment Act;
5            (O) An amount equal to those dividends included in
6        such total that were paid by a corporation that
7        conducts business operations in a federally designated
8        Foreign Trade Zone or Sub-Zone and that is designated a
9        High Impact Business located in Illinois; provided
10        that dividends eligible for the deduction provided in
11        subparagraph (M) of paragraph (2) of this subsection
12        shall not be eligible for the deduction provided under
13        this subparagraph (O);
14            (P) An amount equal to the amount of the deduction
15        used to compute the federal income tax credit for
16        restoration of substantial amounts held under claim of
17        right for the taxable year pursuant to Section 1341 of
18        the Internal Revenue Code;
19            (Q) For taxable year 1999 and thereafter, an amount
20        equal to the amount of any (i) distributions, to the
21        extent includible in gross income for federal income
22        tax purposes, made to the taxpayer because of his or
23        her status as a victim of persecution for racial or
24        religious reasons by Nazi Germany or any other Axis
25        regime or as an heir of the victim and (ii) items of
26        income, to the extent includible in gross income for

 

 

HB4300- 92 -LRB099 14379 HLH 38474 b

1        federal income tax purposes, attributable to, derived
2        from or in any way related to assets stolen from,
3        hidden from, or otherwise lost to a victim of
4        persecution for racial or religious reasons by Nazi
5        Germany or any other Axis regime immediately prior to,
6        during, and immediately after World War II, including,
7        but not limited to, interest on the proceeds receivable
8        as insurance under policies issued to a victim of
9        persecution for racial or religious reasons by Nazi
10        Germany or any other Axis regime by European insurance
11        companies immediately prior to and during World War II;
12        provided, however, this subtraction from federal
13        adjusted gross income does not apply to assets acquired
14        with such assets or with the proceeds from the sale of
15        such assets; provided, further, this paragraph shall
16        only apply to a taxpayer who was the first recipient of
17        such assets after their recovery and who is a victim of
18        persecution for racial or religious reasons by Nazi
19        Germany or any other Axis regime or as an heir of the
20        victim. The amount of and the eligibility for any
21        public assistance, benefit, or similar entitlement is
22        not affected by the inclusion of items (i) and (ii) of
23        this paragraph in gross income for federal income tax
24        purposes. This paragraph is exempt from the provisions
25        of Section 250;
26            (R) For taxable years 2001 and thereafter, for the

 

 

HB4300- 93 -LRB099 14379 HLH 38474 b

1        taxable year in which the bonus depreciation deduction
2        is taken on the taxpayer's federal income tax return
3        under subsection (k) of Section 168 of the Internal
4        Revenue Code and for each applicable taxable year
5        thereafter, an amount equal to "x", where:
6                (1) "y" equals the amount of the depreciation
7            deduction taken for the taxable year on the
8            taxpayer's federal income tax return on property
9            for which the bonus depreciation deduction was
10            taken in any year under subsection (k) of Section
11            168 of the Internal Revenue Code, but not including
12            the bonus depreciation deduction;
13                (2) for taxable years ending on or before
14            December 31, 2005, "x" equals "y" multiplied by 30
15            and then divided by 70 (or "y" multiplied by
16            0.429); and
17                (3) for taxable years ending after December
18            31, 2005:
19                    (i) for property on which a bonus
20                depreciation deduction of 30% of the adjusted
21                basis was taken, "x" equals "y" multiplied by
22                30 and then divided by 70 (or "y" multiplied by
23                0.429); and
24                    (ii) for property on which a bonus
25                depreciation deduction of 50% of the adjusted
26                basis was taken, "x" equals "y" multiplied by

 

 

HB4300- 94 -LRB099 14379 HLH 38474 b

1                1.0; and .
2                (4) for taxable years beginning on and after
3            January 1, 2016, in the case of a small business,
4            for property acquired by purchase as defined in
5            subsection (d) of Section 179 of the Internal
6            Revenue Code, "x" equals the basis of the property
7            used to compute the depreciation deduction for
8            federal income tax purposes; for purposes of this
9            paragraph (R)(4), "small business" means an
10            individual sole proprietor, corporation, trust, or
11            partnership, including its affiliates, that is
12            independently owned and operated, not dominant in
13            its field, and has average gross annual sales for
14            the taxable year and the 2 previous taxable years
15            of less than $10,000,000.
16            The aggregate amount deducted under this
17        subparagraph in all taxable years for any one piece of
18        property may not exceed the amount of the bonus
19        depreciation deduction taken on that property on the
20        taxpayer's federal income tax return under subsection
21        (k) of Section 168 of the Internal Revenue Code. This
22        subparagraph (R) is exempt from the provisions of
23        Section 250;
24            (S) If the taxpayer sells, transfers, abandons, or
25        otherwise disposes of property for which the taxpayer
26        was required in any taxable year to make an addition

 

 

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1        modification under subparagraph (G-10), then an amount
2        equal to that addition modification.
3            If the taxpayer continues to own property through
4        the last day of the last tax year for which the
5        taxpayer may claim a depreciation deduction for
6        federal income tax purposes and for which the taxpayer
7        was required in any taxable year to make an addition
8        modification under subparagraph (G-10), then an amount
9        equal to that addition modification.
10            The taxpayer is allowed to take the deduction under
11        this subparagraph only once with respect to any one
12        piece of property.
13            This subparagraph (S) is exempt from the
14        provisions of Section 250;
15            (T) The amount of (i) any interest income (net of
16        the deductions allocable thereto) taken into account
17        for the taxable year with respect to a transaction with
18        a taxpayer that is required to make an addition
19        modification with respect to such transaction under
20        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
21        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
22        the amount of such addition modification and (ii) any
23        income from intangible property (net of the deductions
24        allocable thereto) taken into account for the taxable
25        year with respect to a transaction with a taxpayer that
26        is required to make an addition modification with

 

 

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1        respect to such transaction under Section
2        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
3        203(d)(2)(D-8), but not to exceed the amount of such
4        addition modification. This subparagraph (T) is exempt
5        from the provisions of Section 250;
6            (U) An amount equal to the interest income taken
7        into account for the taxable year (net of the
8        deductions allocable thereto) with respect to
9        transactions with (i) a foreign person who would be a
10        member of the taxpayer's unitary business group but for
11        the fact the foreign person's business activity
12        outside the United States is 80% or more of that
13        person's total business activity and (ii) for taxable
14        years ending on or after December 31, 2008, to a person
15        who would be a member of the same unitary business
16        group but for the fact that the person is prohibited
17        under Section 1501(a)(27) from being included in the
18        unitary business group because he or she is ordinarily
19        required to apportion business income under different
20        subsections of Section 304, but not to exceed the
21        addition modification required to be made for the same
22        taxable year under Section 203(c)(2)(G-12) for
23        interest paid, accrued, or incurred, directly or
24        indirectly, to the same person. This subparagraph (U)
25        is exempt from the provisions of Section 250;
26            (V) An amount equal to the income from intangible

 

 

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1        property taken into account for the taxable year (net
2        of the deductions allocable thereto) with respect to
3        transactions with (i) a foreign person who would be a
4        member of the taxpayer's unitary business group but for
5        the fact that the foreign person's business activity
6        outside the United States is 80% or more of that
7        person's total business activity and (ii) for taxable
8        years ending on or after December 31, 2008, to a person
9        who would be a member of the same unitary business
10        group but for the fact that the person is prohibited
11        under Section 1501(a)(27) from being included in the
12        unitary business group because he or she is ordinarily
13        required to apportion business income under different
14        subsections of Section 304, but not to exceed the
15        addition modification required to be made for the same
16        taxable year under Section 203(c)(2)(G-13) for
17        intangible expenses and costs paid, accrued, or
18        incurred, directly or indirectly, to the same foreign
19        person. This subparagraph (V) is exempt from the
20        provisions of Section 250;
21            (W) in the case of an estate, an amount equal to
22        all amounts included in such total pursuant to the
23        provisions of Section 111 of the Internal Revenue Code
24        as a recovery of items previously deducted by the
25        decedent from adjusted gross income in the computation
26        of taxable income. This subparagraph (W) is exempt from

 

 

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1        Section 250;
2            (X) an amount equal to the refund included in such
3        total of any tax deducted for federal income tax
4        purposes, to the extent that deduction was added back
5        under subparagraph (F). This subparagraph (X) is
6        exempt from the provisions of Section 250; and
7            (Y) For taxable years ending on or after December
8        31, 2011, in the case of a taxpayer who was required to
9        add back any insurance premiums under Section
10        203(c)(2)(G-14), such taxpayer may elect to subtract
11        that part of a reimbursement received from the
12        insurance company equal to the amount of the expense or
13        loss (including expenses incurred by the insurance
14        company) that would have been taken into account as a
15        deduction for federal income tax purposes if the
16        expense or loss had been uninsured. If a taxpayer makes
17        the election provided for by this subparagraph (Y), the
18        insurer to which the premiums were paid must add back
19        to income the amount subtracted by the taxpayer
20        pursuant to this subparagraph (Y). This subparagraph
21        (Y) is exempt from the provisions of Section 250.
22        (3) Limitation. The amount of any modification
23    otherwise required under this subsection shall, under
24    regulations prescribed by the Department, be adjusted by
25    any amounts included therein which were properly paid,
26    credited, or required to be distributed, or permanently set

 

 

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1    aside for charitable purposes pursuant to Internal Revenue
2    Code Section 642(c) during the taxable year.
 
3    (d) Partnerships.
4        (1) In general. In the case of a partnership, base
5    income means an amount equal to the taxpayer's taxable
6    income for the taxable year as modified by paragraph (2).
7        (2) Modifications. The taxable income referred to in
8    paragraph (1) shall be modified by adding thereto the sum
9    of the following amounts:
10            (A) An amount equal to all amounts paid or accrued
11        to the taxpayer as interest or dividends during the
12        taxable year to the extent excluded from gross income
13        in the computation of taxable income;
14            (B) An amount equal to the amount of tax imposed by
15        this Act to the extent deducted from gross income for
16        the taxable year;
17            (C) The amount of deductions allowed to the
18        partnership pursuant to Section 707 (c) of the Internal
19        Revenue Code in calculating its taxable income;
20            (D) An amount equal to the amount of the capital
21        gain deduction allowable under the Internal Revenue
22        Code, to the extent deducted from gross income in the
23        computation of taxable income;
24            (D-5) For taxable years 2001 and thereafter, an
25        amount equal to the bonus depreciation deduction taken

 

 

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1        on the taxpayer's federal income tax return for the
2        taxable year under subsection (k) of Section 168 of the
3        Internal Revenue Code; except that, for taxable years
4        beginning on or after January 1, 2016, for property
5        acquired by purchase, as defined in subsection (d) of
6        Section 179 of the Internal Revenue Code, by a small
7        business, the modification shall be in an amount equal
8        to the depreciation deduction taken on the taxpayer's
9        federal income tax return for property that is
10        depreciable pursuant to Section 167 of the Internal
11        Revenue Code; for purposes of this paragraph (D-5),
12        "small business" means an individual sole proprietor,
13        corporation, trust, or partnership, including its
14        affiliates, that is independently owned and operated,
15        not dominant in its field, and has average gross annual
16        sales for the taxable year and the 2 previous taxable
17        years of less than $10,000,000;
18            (D-6) If the taxpayer sells, transfers, abandons,
19        or otherwise disposes of property for which the
20        taxpayer was required in any taxable year to make an
21        addition modification under subparagraph (D-5), then
22        an amount equal to the aggregate amount of the
23        deductions taken in all taxable years under
24        subparagraph (O) with respect to that property.
25            If the taxpayer continues to own property through
26        the last day of the last tax year for which the

 

 

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1        taxpayer may claim a depreciation deduction for
2        federal income tax purposes and for which the taxpayer
3        was allowed in any taxable year to make a subtraction
4        modification under subparagraph (O), then an amount
5        equal to that subtraction modification.
6            The taxpayer is required to make the addition
7        modification under this subparagraph only once with
8        respect to any one piece of property;
9            (D-7) An amount equal to the amount otherwise
10        allowed as a deduction in computing base income for
11        interest paid, accrued, or incurred, directly or
12        indirectly, (i) for taxable years ending on or after
13        December 31, 2004, to a foreign person who would be a
14        member of the same unitary business group but for the
15        fact the foreign person's business activity outside
16        the United States is 80% or more of the foreign
17        person's total business activity and (ii) for taxable
18        years ending on or after December 31, 2008, to a person
19        who would be a member of the same unitary business
20        group but for the fact that the person is prohibited
21        under Section 1501(a)(27) from being included in the
22        unitary business group because he or she is ordinarily
23        required to apportion business income under different
24        subsections of Section 304. The addition modification
25        required by this subparagraph shall be reduced to the
26        extent that dividends were included in base income of

 

 

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1        the unitary group for the same taxable year and
2        received by the taxpayer or by a member of the
3        taxpayer's unitary business group (including amounts
4        included in gross income pursuant to Sections 951
5        through 964 of the Internal Revenue Code and amounts
6        included in gross income under Section 78 of the
7        Internal Revenue Code) with respect to the stock of the
8        same person to whom the interest was paid, accrued, or
9        incurred.
10            This paragraph shall not apply to the following:
11                (i) an item of interest paid, accrued, or
12            incurred, directly or indirectly, to a person who
13            is subject in a foreign country or state, other
14            than a state which requires mandatory unitary
15            reporting, to a tax on or measured by net income
16            with respect to such interest; or
17                (ii) an item of interest paid, accrued, or
18            incurred, directly or indirectly, to a person if
19            the taxpayer can establish, based on a
20            preponderance of the evidence, both of the
21            following:
22                    (a) the person, during the same taxable
23                year, paid, accrued, or incurred, the interest
24                to a person that is not a related member, and
25                    (b) the transaction giving rise to the
26                interest expense between the taxpayer and the

 

 

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1                person did not have as a principal purpose the
2                avoidance of Illinois income tax, and is paid
3                pursuant to a contract or agreement that
4                reflects an arm's-length interest rate and
5                terms; or
6                (iii) the taxpayer can establish, based on
7            clear and convincing evidence, that the interest
8            paid, accrued, or incurred relates to a contract or
9            agreement entered into at arm's-length rates and
10            terms and the principal purpose for the payment is
11            not federal or Illinois tax avoidance; or
12                (iv) an item of interest paid, accrued, or
13            incurred, directly or indirectly, to a person if
14            the taxpayer establishes by clear and convincing
15            evidence that the adjustments are unreasonable; or
16            if the taxpayer and the Director agree in writing
17            to the application or use of an alternative method
18            of apportionment under Section 304(f).
19                Nothing in this subsection shall preclude the
20            Director from making any other adjustment
21            otherwise allowed under Section 404 of this Act for
22            any tax year beginning after the effective date of
23            this amendment provided such adjustment is made
24            pursuant to regulation adopted by the Department
25            and such regulations provide methods and standards
26            by which the Department will utilize its authority

 

 

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1            under Section 404 of this Act; and
2            (D-8) An amount equal to the amount of intangible
3        expenses and costs otherwise allowed as a deduction in
4        computing base income, and that were paid, accrued, or
5        incurred, directly or indirectly, (i) for taxable
6        years ending on or after December 31, 2004, to a
7        foreign person who would be a member of the same
8        unitary business group but for the fact that the
9        foreign person's business activity outside the United
10        States is 80% or more of that person's total business
11        activity and (ii) for taxable years ending on or after
12        December 31, 2008, to a person who would be a member of
13        the same unitary business group but for the fact that
14        the person is prohibited under Section 1501(a)(27)
15        from being included in the unitary business group
16        because he or she is ordinarily required to apportion
17        business income under different subsections of Section
18        304. The addition modification required by this
19        subparagraph shall be reduced to the extent that
20        dividends were included in base income of the unitary
21        group for the same taxable year and received by the
22        taxpayer or by a member of the taxpayer's unitary
23        business group (including amounts included in gross
24        income pursuant to Sections 951 through 964 of the
25        Internal Revenue Code and amounts included in gross
26        income under Section 78 of the Internal Revenue Code)

 

 

HB4300- 105 -LRB099 14379 HLH 38474 b

1        with respect to the stock of the same person to whom
2        the intangible expenses and costs were directly or
3        indirectly paid, incurred or accrued. The preceding
4        sentence shall not apply to the extent that the same
5        dividends caused a reduction to the addition
6        modification required under Section 203(d)(2)(D-7) of
7        this Act. As used in this subparagraph, the term
8        "intangible expenses and costs" includes (1) expenses,
9        losses, and costs for, or related to, the direct or
10        indirect acquisition, use, maintenance or management,
11        ownership, sale, exchange, or any other disposition of
12        intangible property; (2) losses incurred, directly or
13        indirectly, from factoring transactions or discounting
14        transactions; (3) royalty, patent, technical, and
15        copyright fees; (4) licensing fees; and (5) other
16        similar expenses and costs. For purposes of this
17        subparagraph, "intangible property" includes patents,
18        patent applications, trade names, trademarks, service
19        marks, copyrights, mask works, trade secrets, and
20        similar types of intangible assets;
21            This paragraph shall not apply to the following:
22                (i) any item of intangible expenses or costs
23            paid, accrued, or incurred, directly or
24            indirectly, from a transaction with a person who is
25            subject in a foreign country or state, other than a
26            state which requires mandatory unitary reporting,

 

 

HB4300- 106 -LRB099 14379 HLH 38474 b

1            to a tax on or measured by net income with respect
2            to such item; or
3                (ii) any item of intangible expense or cost
4            paid, accrued, or incurred, directly or
5            indirectly, if the taxpayer can establish, based
6            on a preponderance of the evidence, both of the
7            following:
8                    (a) the person during the same taxable
9                year paid, accrued, or incurred, the
10                intangible expense or cost to a person that is
11                not a related member, and
12                    (b) the transaction giving rise to the
13                intangible expense or cost between the
14                taxpayer and the person did not have as a
15                principal purpose the avoidance of Illinois
16                income tax, and is paid pursuant to a contract
17                or agreement that reflects arm's-length terms;
18                or
19                (iii) any item of intangible expense or cost
20            paid, accrued, or incurred, directly or
21            indirectly, from a transaction with a person if the
22            taxpayer establishes by clear and convincing
23            evidence, that the adjustments are unreasonable;
24            or if the taxpayer and the Director agree in
25            writing to the application or use of an alternative
26            method of apportionment under Section 304(f);

 

 

HB4300- 107 -LRB099 14379 HLH 38474 b

1                Nothing in this subsection shall preclude the
2            Director from making any other adjustment
3            otherwise allowed under Section 404 of this Act for
4            any tax year beginning after the effective date of
5            this amendment provided such adjustment is made
6            pursuant to regulation adopted by the Department
7            and such regulations provide methods and standards
8            by which the Department will utilize its authority
9            under Section 404 of this Act;
10            (D-9) For taxable years ending on or after December
11        31, 2008, an amount equal to the amount of insurance
12        premium expenses and costs otherwise allowed as a
13        deduction in computing base income, and that were paid,
14        accrued, or incurred, directly or indirectly, to a
15        person who would be a member of the same unitary
16        business group but for the fact that the person is
17        prohibited under Section 1501(a)(27) from being
18        included in the unitary business group because he or
19        she is ordinarily required to apportion business
20        income under different subsections of Section 304. The
21        addition modification required by this subparagraph
22        shall be reduced to the extent that dividends were
23        included in base income of the unitary group for the
24        same taxable year and received by the taxpayer or by a
25        member of the taxpayer's unitary business group
26        (including amounts included in gross income under

 

 

HB4300- 108 -LRB099 14379 HLH 38474 b

1        Sections 951 through 964 of the Internal Revenue Code
2        and amounts included in gross income under Section 78
3        of the Internal Revenue Code) with respect to the stock
4        of the same person to whom the premiums and costs were
5        directly or indirectly paid, incurred, or accrued. The
6        preceding sentence does not apply to the extent that
7        the same dividends caused a reduction to the addition
8        modification required under Section 203(d)(2)(D-7) or
9        Section 203(d)(2)(D-8) of this Act;
10            (D-10) An amount equal to the credit allowable to
11        the taxpayer under Section 218(a) of this Act,
12        determined without regard to Section 218(c) of this
13        Act;
14            (D-11) For taxable years ending on or after
15        December 31, 2015, an amount equal to the deduction
16        allowed under Section 199 of the Internal Revenue Code
17        for the taxable year;
18    and by deducting from the total so obtained the following
19    amounts:
20            (E) The valuation limitation amount;
21            (F) An amount equal to the amount of any tax
22        imposed by this Act which was refunded to the taxpayer
23        and included in such total for the taxable year;
24            (G) An amount equal to all amounts included in
25        taxable income as modified by subparagraphs (A), (B),
26        (C) and (D) which are exempt from taxation by this

 

 

HB4300- 109 -LRB099 14379 HLH 38474 b

1        State either by reason of its statutes or Constitution
2        or by reason of the Constitution, treaties or statutes
3        of the United States; provided that, in the case of any
4        statute of this State that exempts income derived from
5        bonds or other obligations from the tax imposed under
6        this Act, the amount exempted shall be the interest net
7        of bond premium amortization;
8            (H) Any income of the partnership which
9        constitutes personal service income as defined in
10        Section 1348 (b) (1) of the Internal Revenue Code (as
11        in effect December 31, 1981) or a reasonable allowance
12        for compensation paid or accrued for services rendered
13        by partners to the partnership, whichever is greater;
14        this subparagraph (H) is exempt from the provisions of
15        Section 250;
16            (I) An amount equal to all amounts of income
17        distributable to an entity subject to the Personal
18        Property Tax Replacement Income Tax imposed by
19        subsections (c) and (d) of Section 201 of this Act
20        including amounts distributable to organizations
21        exempt from federal income tax by reason of Section
22        501(a) of the Internal Revenue Code; this subparagraph
23        (I) is exempt from the provisions of Section 250;
24            (J) With the exception of any amounts subtracted
25        under subparagraph (G), an amount equal to the sum of
26        all amounts disallowed as deductions by (i) Sections

 

 

HB4300- 110 -LRB099 14379 HLH 38474 b

1        171(a) (2), and 265(2) of the Internal Revenue Code,
2        and all amounts of expenses allocable to interest and
3        disallowed as deductions by Section 265(1) of the
4        Internal Revenue Code; and (ii) for taxable years
5        ending on or after August 13, 1999, Sections 171(a)(2),
6        265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue
7        Code, plus, (iii) for taxable years ending on or after
8        December 31, 2011, Section 45G(e)(3) of the Internal
9        Revenue Code and, for taxable years ending on or after
10        December 31, 2008, any amount included in gross income
11        under Section 87 of the Internal Revenue Code; the
12        provisions of this subparagraph are exempt from the
13        provisions of Section 250;
14            (K) An amount equal to those dividends included in
15        such total which were paid by a corporation which
16        conducts business operations in a River Edge
17        Redevelopment Zone or zones created under the River
18        Edge Redevelopment Zone Act and conducts substantially
19        all of its operations from a River Edge Redevelopment
20        Zone or zones. This subparagraph (K) is exempt from the
21        provisions of Section 250;
22            (L) An amount equal to any contribution made to a
23        job training project established pursuant to the Real
24        Property Tax Increment Allocation Redevelopment Act;
25            (M) An amount equal to those dividends included in
26        such total that were paid by a corporation that

 

 

HB4300- 111 -LRB099 14379 HLH 38474 b

1        conducts business operations in a federally designated
2        Foreign Trade Zone or Sub-Zone and that is designated a
3        High Impact Business located in Illinois; provided
4        that dividends eligible for the deduction provided in
5        subparagraph (K) of paragraph (2) of this subsection
6        shall not be eligible for the deduction provided under
7        this subparagraph (M);
8            (N) An amount equal to the amount of the deduction
9        used to compute the federal income tax credit for
10        restoration of substantial amounts held under claim of
11        right for the taxable year pursuant to Section 1341 of
12        the Internal Revenue Code;
13            (O) For taxable years 2001 and thereafter, for the
14        taxable year in which the bonus depreciation deduction
15        is taken on the taxpayer's federal income tax return
16        under subsection (k) of Section 168 of the Internal
17        Revenue Code and for each applicable taxable year
18        thereafter, an amount equal to "x", where:
19                (1) "y" equals the amount of the depreciation
20            deduction taken for the taxable year on the
21            taxpayer's federal income tax return on property
22            for which the bonus depreciation deduction was
23            taken in any year under subsection (k) of Section
24            168 of the Internal Revenue Code, but not including
25            the bonus depreciation deduction;
26                (2) for taxable years ending on or before

 

 

HB4300- 112 -LRB099 14379 HLH 38474 b

1            December 31, 2005, "x" equals "y" multiplied by 30
2            and then divided by 70 (or "y" multiplied by
3            0.429); and
4                (3) for taxable years ending after December
5            31, 2005:
6                    (i) for property on which a bonus
7                depreciation deduction of 30% of the adjusted
8                basis was taken, "x" equals "y" multiplied by
9                30 and then divided by 70 (or "y" multiplied by
10                0.429); and
11                    (ii) for property on which a bonus
12                depreciation deduction of 50% of the adjusted
13                basis was taken, "x" equals "y" multiplied by
14                1.0; and .
15                (4) for taxable years beginning on and after
16            January 1, 2016, in the case of a small business,
17            for property acquired by purchase as defined in
18            subsection (d) of Section 179 of the Internal
19            Revenue Code, "x" equals the basis of the property
20            used to compute the depreciation deduction for
21            federal income tax purposes; for purposes of this
22            paragraph (O)(4), "small business" means an
23            individual sole proprietor, corporation, trust, or
24            partnership, including its affiliates, that is
25            independently owned and operated, not dominant in
26            its field, and has average gross annual sales for

 

 

HB4300- 113 -LRB099 14379 HLH 38474 b

1            the taxable year and the 2 previous taxable years
2            of less than $10,000,000.
3            The aggregate amount deducted under this
4        subparagraph in all taxable years for any one piece of
5        property may not exceed the amount of the bonus
6        depreciation deduction taken on that property on the
7        taxpayer's federal income tax return under subsection
8        (k) of Section 168 of the Internal Revenue Code. This
9        subparagraph (O) is exempt from the provisions of
10        Section 250;
11            (P) If the taxpayer sells, transfers, abandons, or
12        otherwise disposes of property for which the taxpayer
13        was required in any taxable year to make an addition
14        modification under subparagraph (D-5), then an amount
15        equal to that addition modification.
16            If the taxpayer continues to own property through
17        the last day of the last tax year for which the
18        taxpayer may claim a depreciation deduction for
19        federal income tax purposes and for which the taxpayer
20        was required in any taxable year to make an addition
21        modification under subparagraph (D-5), then an amount
22        equal to that addition modification.
23            The taxpayer is allowed to take the deduction under
24        this subparagraph only once with respect to any one
25        piece of property.
26            This subparagraph (P) is exempt from the

 

 

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1        provisions of Section 250;
2            (Q) The amount of (i) any interest income (net of
3        the deductions allocable thereto) taken into account
4        for the taxable year with respect to a transaction with
5        a taxpayer that is required to make an addition
6        modification with respect to such transaction under
7        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
8        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
9        the amount of such addition modification and (ii) any
10        income from intangible property (net of the deductions
11        allocable thereto) taken into account for the taxable
12        year with respect to a transaction with a taxpayer that
13        is required to make an addition modification with
14        respect to such transaction under Section
15        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
16        203(d)(2)(D-8), but not to exceed the amount of such
17        addition modification. This subparagraph (Q) is exempt
18        from Section 250;
19            (R) An amount equal to the interest income taken
20        into account for the taxable year (net of the
21        deductions allocable thereto) with respect to
22        transactions with (i) a foreign person who would be a
23        member of the taxpayer's unitary business group but for
24        the fact that the foreign person's business activity
25        outside the United States is 80% or more of that
26        person's total business activity and (ii) for taxable

 

 

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1        years ending on or after December 31, 2008, to a person
2        who would be a member of the same unitary business
3        group but for the fact that the person is prohibited
4        under Section 1501(a)(27) from being included in the
5        unitary business group because he or she is ordinarily
6        required to apportion business income under different
7        subsections of Section 304, but not to exceed the
8        addition modification required to be made for the same
9        taxable year under Section 203(d)(2)(D-7) for interest
10        paid, accrued, or incurred, directly or indirectly, to
11        the same person. This subparagraph (R) is exempt from
12        Section 250;
13            (S) An amount equal to the income from intangible
14        property taken into account for the taxable year (net
15        of the deductions allocable thereto) with respect to
16        transactions with (i) a foreign person who would be a
17        member of the taxpayer's unitary business group but for
18        the fact that the foreign person's business activity
19        outside the United States is 80% or more of that
20        person's total business activity and (ii) for taxable
21        years ending on or after December 31, 2008, to a person
22        who would be a member of the same unitary business
23        group but for the fact that the person is prohibited
24        under Section 1501(a)(27) from being included in the
25        unitary business group because he or she is ordinarily
26        required to apportion business income under different

 

 

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1        subsections of Section 304, but not to exceed the
2        addition modification required to be made for the same
3        taxable year under Section 203(d)(2)(D-8) for
4        intangible expenses and costs paid, accrued, or
5        incurred, directly or indirectly, to the same person.
6        This subparagraph (S) is exempt from Section 250; and
7            (T) For taxable years ending on or after December
8        31, 2011, in the case of a taxpayer who was required to
9        add back any insurance premiums under Section
10        203(d)(2)(D-9), such taxpayer may elect to subtract
11        that part of a reimbursement received from the
12        insurance company equal to the amount of the expense or
13        loss (including expenses incurred by the insurance
14        company) that would have been taken into account as a
15        deduction for federal income tax purposes if the
16        expense or loss had been uninsured. If a taxpayer makes
17        the election provided for by this subparagraph (T), the
18        insurer to which the premiums were paid must add back
19        to income the amount subtracted by the taxpayer
20        pursuant to this subparagraph (T). This subparagraph
21        (T) is exempt from the provisions of Section 250.
 
22    (e) Gross income; adjusted gross income; taxable income.
23        (1) In general. Subject to the provisions of paragraph
24    (2) and subsection (b) (3), for purposes of this Section
25    and Section 803(e), a taxpayer's gross income, adjusted

 

 

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1    gross income, or taxable income for the taxable year shall
2    mean the amount of gross income, adjusted gross income or
3    taxable income properly reportable for federal income tax
4    purposes for the taxable year under the provisions of the
5    Internal Revenue Code. Taxable income may be less than
6    zero. However, for taxable years ending on or after
7    December 31, 1986, net operating loss carryforwards from
8    taxable years ending prior to December 31, 1986, may not
9    exceed the sum of federal taxable income for the taxable
10    year before net operating loss deduction, plus the excess
11    of addition modifications over subtraction modifications
12    for the taxable year. For taxable years ending prior to
13    December 31, 1986, taxable income may never be an amount in
14    excess of the net operating loss for the taxable year as
15    defined in subsections (c) and (d) of Section 172 of the
16    Internal Revenue Code, provided that when taxable income of
17    a corporation (other than a Subchapter S corporation),
18    trust, or estate is less than zero and addition
19    modifications, other than those provided by subparagraph
20    (E) of paragraph (2) of subsection (b) for corporations or
21    subparagraph (E) of paragraph (2) of subsection (c) for
22    trusts and estates, exceed subtraction modifications, an
23    addition modification must be made under those
24    subparagraphs for any other taxable year to which the
25    taxable income less than zero (net operating loss) is
26    applied under Section 172 of the Internal Revenue Code or

 

 

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1    under subparagraph (E) of paragraph (2) of this subsection
2    (e) applied in conjunction with Section 172 of the Internal
3    Revenue Code.
4        (2) Special rule. For purposes of paragraph (1) of this
5    subsection, the taxable income properly reportable for
6    federal income tax purposes shall mean:
7            (A) Certain life insurance companies. In the case
8        of a life insurance company subject to the tax imposed
9        by Section 801 of the Internal Revenue Code, life
10        insurance company taxable income, plus the amount of
11        distribution from pre-1984 policyholder surplus
12        accounts as calculated under Section 815a of the
13        Internal Revenue Code;
14            (B) Certain other insurance companies. In the case
15        of mutual insurance companies subject to the tax
16        imposed by Section 831 of the Internal Revenue Code,
17        insurance company taxable income;
18            (C) Regulated investment companies. In the case of
19        a regulated investment company subject to the tax
20        imposed by Section 852 of the Internal Revenue Code,
21        investment company taxable income;
22            (D) Real estate investment trusts. In the case of a
23        real estate investment trust subject to the tax imposed
24        by Section 857 of the Internal Revenue Code, real
25        estate investment trust taxable income;
26            (E) Consolidated corporations. In the case of a

 

 

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1        corporation which is a member of an affiliated group of
2        corporations filing a consolidated income tax return
3        for the taxable year for federal income tax purposes,
4        taxable income determined as if such corporation had
5        filed a separate return for federal income tax purposes
6        for the taxable year and each preceding taxable year
7        for which it was a member of an affiliated group. For
8        purposes of this subparagraph, the taxpayer's separate
9        taxable income shall be determined as if the election
10        provided by Section 243(b) (2) of the Internal Revenue
11        Code had been in effect for all such years;
12            (F) Cooperatives. In the case of a cooperative
13        corporation or association, the taxable income of such
14        organization determined in accordance with the
15        provisions of Section 1381 through 1388 of the Internal
16        Revenue Code, but without regard to the prohibition
17        against offsetting losses from patronage activities
18        against income from nonpatronage activities; except
19        that a cooperative corporation or association may make
20        an election to follow its federal income tax treatment
21        of patronage losses and nonpatronage losses. In the
22        event such election is made, such losses shall be
23        computed and carried over in a manner consistent with
24        subsection (a) of Section 207 of this Act and
25        apportioned by the apportionment factor reported by
26        the cooperative on its Illinois income tax return filed

 

 

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1        for the taxable year in which the losses are incurred.
2        The election shall be effective for all taxable years
3        with original returns due on or after the date of the
4        election. In addition, the cooperative may file an
5        amended return or returns, as allowed under this Act,
6        to provide that the election shall be effective for
7        losses incurred or carried forward for taxable years
8        occurring prior to the date of the election. Once made,
9        the election may only be revoked upon approval of the
10        Director. The Department shall adopt rules setting
11        forth requirements for documenting the elections and
12        any resulting Illinois net loss and the standards to be
13        used by the Director in evaluating requests to revoke
14        elections. Public Act 96-932 is declaratory of
15        existing law;
16            (G) Subchapter S corporations. In the case of: (i)
17        a Subchapter S corporation for which there is in effect
18        an election for the taxable year under Section 1362 of
19        the Internal Revenue Code, the taxable income of such
20        corporation determined in accordance with Section
21        1363(b) of the Internal Revenue Code, except that
22        taxable income shall take into account those items
23        which are required by Section 1363(b)(1) of the
24        Internal Revenue Code to be separately stated; and (ii)
25        a Subchapter S corporation for which there is in effect
26        a federal election to opt out of the provisions of the

 

 

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1        Subchapter S Revision Act of 1982 and have applied
2        instead the prior federal Subchapter S rules as in
3        effect on July 1, 1982, the taxable income of such
4        corporation determined in accordance with the federal
5        Subchapter S rules as in effect on July 1, 1982; and
6            (H) Partnerships. In the case of a partnership,
7        taxable income determined in accordance with Section
8        703 of the Internal Revenue Code, except that taxable
9        income shall take into account those items which are
10        required by Section 703(a)(1) to be separately stated
11        but which would be taken into account by an individual
12        in calculating his taxable income.
13        (3) Recapture of business expenses on disposition of
14    asset or business. Notwithstanding any other law to the
15    contrary, if in prior years income from an asset or
16    business has been classified as business income and in a
17    later year is demonstrated to be non-business income, then
18    all expenses, without limitation, deducted in such later
19    year and in the 2 immediately preceding taxable years
20    related to that asset or business that generated the
21    non-business income shall be added back and recaptured as
22    business income in the year of the disposition of the asset
23    or business. Such amount shall be apportioned to Illinois
24    using the greater of the apportionment fraction computed
25    for the business under Section 304 of this Act for the
26    taxable year or the average of the apportionment fractions

 

 

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1    computed for the business under Section 304 of this Act for
2    the taxable year and for the 2 immediately preceding
3    taxable years.
 
4    (f) Valuation limitation amount.
5        (1) In general. The valuation limitation amount
6    referred to in subsections (a) (2) (G), (c) (2) (I) and
7    (d)(2) (E) is an amount equal to:
8            (A) The sum of the pre-August 1, 1969 appreciation
9        amounts (to the extent consisting of gain reportable
10        under the provisions of Section 1245 or 1250 of the
11        Internal Revenue Code) for all property in respect of
12        which such gain was reported for the taxable year; plus
13            (B) The lesser of (i) the sum of the pre-August 1,
14        1969 appreciation amounts (to the extent consisting of
15        capital gain) for all property in respect of which such
16        gain was reported for federal income tax purposes for
17        the taxable year, or (ii) the net capital gain for the
18        taxable year, reduced in either case by any amount of
19        such gain included in the amount determined under
20        subsection (a) (2) (F) or (c) (2) (H).
21        (2) Pre-August 1, 1969 appreciation amount.
22            (A) If the fair market value of property referred
23        to in paragraph (1) was readily ascertainable on August
24        1, 1969, the pre-August 1, 1969 appreciation amount for
25        such property is the lesser of (i) the excess of such

 

 

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1        fair market value over the taxpayer's basis (for
2        determining gain) for such property on that date
3        (determined under the Internal Revenue Code as in
4        effect on that date), or (ii) the total gain realized
5        and reportable for federal income tax purposes in
6        respect of the sale, exchange or other disposition of
7        such property.
8            (B) If the fair market value of property referred
9        to in paragraph (1) was not readily ascertainable on
10        August 1, 1969, the pre-August 1, 1969 appreciation
11        amount for such property is that amount which bears the
12        same ratio to the total gain reported in respect of the
13        property for federal income tax purposes for the
14        taxable year, as the number of full calendar months in
15        that part of the taxpayer's holding period for the
16        property ending July 31, 1969 bears to the number of
17        full calendar months in the taxpayer's entire holding
18        period for the property.
19            (C) The Department shall prescribe such
20        regulations as may be necessary to carry out the
21        purposes of this paragraph.
 
22    (g) Double deductions. Unless specifically provided
23otherwise, nothing in this Section shall permit the same item
24to be deducted more than once.
 

 

 

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1    (h) Legislative intention. Except as expressly provided by
2this Section there shall be no modifications or limitations on
3the amounts of income, gain, loss or deduction taken into
4account in determining gross income, adjusted gross income or
5taxable income for federal income tax purposes for the taxable
6year, or in the amount of such items entering into the
7computation of base income and net income under this Act for
8such taxable year, whether in respect of property values as of
9August 1, 1969 or otherwise.
10(Source: P.A. 96-45, eff. 7-15-09; 96-120, eff. 8-4-09; 96-198,
11eff. 8-10-09; 96-328, eff. 8-11-09; 96-520, eff. 8-14-09;
1296-835, eff. 12-16-09; 96-932, eff. 1-1-11; 96-935, eff.
136-21-10; 96-1214, eff. 7-22-10; 97-333, eff. 8-12-11; 97-507,
14eff. 8-23-11; 97-905, eff. 8-7-12.)
 
15    (35 ILCS 5/304)  (from Ch. 120, par. 3-304)
16    Sec. 304. Business income of persons other than residents.
17    (a) In general. The business income of a person other than
18a resident shall be allocated to this State if such person's
19business income is derived solely from this State. If a person
20other than a resident derives business income from this State
21and one or more other states, then, for tax years ending on or
22before December 30, 1998, and for tax years ending on or after
23December 31, 2015, and except as otherwise provided by this
24Section, such person's business income shall be apportioned to
25this State by multiplying the income by a fraction, the

 

 

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1numerator of which is the sum of the property factor (if any),
2the payroll factor (if any) and 200% of the sales factor (if
3any), and the denominator of which is 4 reduced by the number
4of factors other than the sales factor which have a denominator
5of zero and by an additional 2 if the sales factor has a
6denominator of zero. For tax years ending on or after December
731, 1998 and ending on or before December 30, 2015, and except
8as otherwise provided by this Section, persons other than
9residents who derive business income from this State and one or
10more other states shall compute their apportionment factor by
11weighting their property, payroll, and sales factors as
12provided in subsection (h) of this Section.
13    (1) Property factor.
14        (A) The property factor is a fraction, the numerator of
15    which is the average value of the person's real and
16    tangible personal property owned or rented and used in the
17    trade or business in this State during the taxable year and
18    the denominator of which is the average value of all the
19    person's real and tangible personal property owned or
20    rented and used in the trade or business during the taxable
21    year.
22        (B) Property owned by the person is valued at its
23    original cost. Property rented by the person is valued at 8
24    times the net annual rental rate. Net annual rental rate is
25    the annual rental rate paid by the person less any annual
26    rental rate received by the person from sub-rentals.

 

 

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1        (C) The average value of property shall be determined
2    by averaging the values at the beginning and ending of the
3    taxable year but the Director may require the averaging of
4    monthly values during the taxable year if reasonably
5    required to reflect properly the average value of the
6    person's property.
7    (2) Payroll factor.
8        (A) The payroll factor is a fraction, the numerator of
9    which is the total amount paid in this State during the
10    taxable year by the person for compensation, and the
11    denominator of which is the total compensation paid
12    everywhere during the taxable year.
13        (B) Compensation is paid in this State if:
14            (i) The individual's service is performed entirely
15        within this State;
16            (ii) The individual's service is performed both
17        within and without this State, but the service
18        performed without this State is incidental to the
19        individual's service performed within this State; or
20            (iii) Some of the service is performed within this
21        State and either the base of operations, or if there is
22        no base of operations, the place from which the service
23        is directed or controlled is within this State, or the
24        base of operations or the place from which the service
25        is directed or controlled is not in any state in which
26        some part of the service is performed, but the

 

 

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1        individual's residence is in this State.
2            (iv) Compensation paid to nonresident professional
3        athletes.
4            (a) General. The Illinois source income of a
5        nonresident individual who is a member of a
6        professional athletic team includes the portion of the
7        individual's total compensation for services performed
8        as a member of a professional athletic team during the
9        taxable year which the number of duty days spent within
10        this State performing services for the team in any
11        manner during the taxable year bears to the total
12        number of duty days spent both within and without this
13        State during the taxable year.
14            (b) Travel days. Travel days that do not involve
15        either a game, practice, team meeting, or other similar
16        team event are not considered duty days spent in this
17        State. However, such travel days are considered in the
18        total duty days spent both within and without this
19        State.
20            (c) Definitions. For purposes of this subpart
21        (iv):
22                (1) The term "professional athletic team"
23            includes, but is not limited to, any professional
24            baseball, basketball, football, soccer, or hockey
25            team.
26                (2) The term "member of a professional

 

 

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1            athletic team" includes those employees who are
2            active players, players on the disabled list, and
3            any other persons required to travel and who travel
4            with and perform services on behalf of a
5            professional athletic team on a regular basis.
6            This includes, but is not limited to, coaches,
7            managers, and trainers.
8                (3) Except as provided in items (C) and (D) of
9            this subpart (3), the term "duty days" means all
10            days during the taxable year from the beginning of
11            the professional athletic team's official
12            pre-season training period through the last game
13            in which the team competes or is scheduled to
14            compete. Duty days shall be counted for the year in
15            which they occur, including where a team's
16            official pre-season training period through the
17            last game in which the team competes or is
18            scheduled to compete, occurs during more than one
19            tax year.
20                    (A) Duty days shall also include days on
21                which a member of a professional athletic team
22                performs service for a team on a date that does
23                not fall within the foregoing period (e.g.,
24                participation in instructional leagues, the
25                "All Star Game", or promotional "caravans").
26                Performing a service for a professional

 

 

HB4300- 129 -LRB099 14379 HLH 38474 b

1                athletic team includes conducting training and
2                rehabilitation activities, when such
3                activities are conducted at team facilities.
4                    (B) Also included in duty days are game
5                days, practice days, days spent at team
6                meetings, promotional caravans, preseason
7                training camps, and days served with the team
8                through all post-season games in which the team
9                competes or is scheduled to compete.
10                    (C) Duty days for any person who joins a
11                team during the period from the beginning of
12                the professional athletic team's official
13                pre-season training period through the last
14                game in which the team competes, or is
15                scheduled to compete, shall begin on the day
16                that person joins the team. Conversely, duty
17                days for any person who leaves a team during
18                this period shall end on the day that person
19                leaves the team. Where a person switches teams
20                during a taxable year, a separate duty-day
21                calculation shall be made for the period the
22                person was with each team.
23                    (D) Days for which a member of a
24                professional athletic team is not compensated
25                and is not performing services for the team in
26                any manner, including days when such member of

 

 

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1                a professional athletic team has been
2                suspended without pay and prohibited from
3                performing any services for the team, shall not
4                be treated as duty days.
5                    (E) Days for which a member of a
6                professional athletic team is on the disabled
7                list and does not conduct rehabilitation
8                activities at facilities of the team, and is
9                not otherwise performing services for the team
10                in Illinois, shall not be considered duty days
11                spent in this State. All days on the disabled
12                list, however, are considered to be included in
13                total duty days spent both within and without
14                this State.
15                (4) The term "total compensation for services
16            performed as a member of a professional athletic
17            team" means the total compensation received during
18            the taxable year for services performed:
19                    (A) from the beginning of the official
20                pre-season training period through the last
21                game in which the team competes or is scheduled
22                to compete during that taxable year; and
23                    (B) during the taxable year on a date which
24                does not fall within the foregoing period
25                (e.g., participation in instructional leagues,
26                the "All Star Game", or promotional caravans).

 

 

HB4300- 131 -LRB099 14379 HLH 38474 b

1                This compensation shall include, but is not
2            limited to, salaries, wages, bonuses as described
3            in this subpart, and any other type of compensation
4            paid during the taxable year to a member of a
5            professional athletic team for services performed
6            in that year. This compensation does not include
7            strike benefits, severance pay, termination pay,
8            contract or option year buy-out payments,
9            expansion or relocation payments, or any other
10            payments not related to services performed for the
11            team.
12                For purposes of this subparagraph, "bonuses"
13            included in "total compensation for services
14            performed as a member of a professional athletic
15            team" subject to the allocation described in
16            Section 302(c)(1) are: bonuses earned as a result
17            of play (i.e., performance bonuses) during the
18            season, including bonuses paid for championship,
19            playoff or "bowl" games played by a team, or for
20            selection to all-star league or other honorary
21            positions; and bonuses paid for signing a
22            contract, unless the payment of the signing bonus
23            is not conditional upon the signee playing any
24            games for the team or performing any subsequent
25            services for the team or even making the team, the
26            signing bonus is payable separately from the

 

 

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1            salary and any other compensation, and the signing
2            bonus is nonrefundable.
3    (3) Sales factor.
4        (A) The sales factor is a fraction, the numerator of
5    which is the total sales of the person in this State during
6    the taxable year, and the denominator of which is the total
7    sales of the person everywhere during the taxable year.
8        (B) Sales of tangible personal property are in this
9    State if:
10            (i) The property is delivered or shipped to a
11        purchaser, other than the United States government,
12        within this State regardless of the f. o. b. point or
13        other conditions of the sale; or
14            (ii) The property is shipped from an office, store,
15        warehouse, factory or other place of storage in this
16        State and either the purchaser is the United States
17        government or the person is not taxable in the state of
18        the purchaser; provided, however, that premises owned
19        or leased by a person who has independently contracted
20        with the seller for the printing of newspapers,
21        periodicals or books shall not be deemed to be an
22        office, store, warehouse, factory or other place of
23        storage for purposes of this Section. Sales of tangible
24        personal property are not in this State if the seller
25        and purchaser would be members of the same unitary
26        business group but for the fact that either the seller

 

 

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1        or purchaser is a person with 80% or more of total
2        business activity outside of the United States and the
3        property is purchased for resale.
4        (B-1) Patents, copyrights, trademarks, and similar
5    items of intangible personal property.
6            (i) Gross receipts from the licensing, sale, or
7        other disposition of a patent, copyright, trademark,
8        or similar item of intangible personal property, other
9        than gross receipts governed by paragraph (B-7) of this
10        item (3), are in this State to the extent the item is
11        utilized in this State during the year the gross
12        receipts are included in gross income.
13            (ii) Place of utilization.
14                (I) A patent is utilized in a state to the
15            extent that it is employed in production,
16            fabrication, manufacturing, or other processing in
17            the state or to the extent that a patented product
18            is produced in the state. If a patent is utilized
19            in more than one state, the extent to which it is
20            utilized in any one state shall be a fraction equal
21            to the gross receipts of the licensee or purchaser
22            from sales or leases of items produced,
23            fabricated, manufactured, or processed within that
24            state using the patent and of patented items
25            produced within that state, divided by the total of
26            such gross receipts for all states in which the

 

 

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1            patent is utilized.
2                (II) A copyright is utilized in a state to the
3            extent that printing or other publication
4            originates in the state. If a copyright is utilized
5            in more than one state, the extent to which it is
6            utilized in any one state shall be a fraction equal
7            to the gross receipts from sales or licenses of
8            materials printed or published in that state
9            divided by the total of such gross receipts for all
10            states in which the copyright is utilized.
11                (III) Trademarks and other items of intangible
12            personal property governed by this paragraph (B-1)
13            are utilized in the state in which the commercial
14            domicile of the licensee or purchaser is located.
15            (iii) If the state of utilization of an item of
16        property governed by this paragraph (B-1) cannot be
17        determined from the taxpayer's books and records or
18        from the books and records of any person related to the
19        taxpayer within the meaning of Section 267(b) of the
20        Internal Revenue Code, 26 U.S.C. 267, the gross
21        receipts attributable to that item shall be excluded
22        from both the numerator and the denominator of the
23        sales factor.
24        (B-2) Gross receipts from the license, sale, or other
25    disposition of patents, copyrights, trademarks, and
26    similar items of intangible personal property, other than

 

 

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1    gross receipts governed by paragraph (B-7) of this item
2    (3), may be included in the numerator or denominator of the
3    sales factor only if gross receipts from licenses, sales,
4    or other disposition of such items comprise more than 50%
5    of the taxpayer's total gross receipts included in gross
6    income during the tax year and during each of the 2
7    immediately preceding tax years; provided that, when a
8    taxpayer is a member of a unitary business group, such
9    determination shall be made on the basis of the gross
10    receipts of the entire unitary business group.
11        (B-5) For taxable years ending on or after December 31,
12    2008, except as provided in subsections (ii) through (vii),
13    receipts from the sale of telecommunications service or
14    mobile telecommunications service are in this State if the
15    customer's service address is in this State.
16            (i) For purposes of this subparagraph (B-5), the
17        following terms have the following meanings:
18            "Ancillary services" means services that are
19        associated with or incidental to the provision of
20        "telecommunications services", including but not
21        limited to "detailed telecommunications billing",
22        "directory assistance", "vertical service", and "voice
23        mail services".
24            "Air-to-Ground Radiotelephone service" means a
25        radio service, as that term is defined in 47 CFR 22.99,
26        in which common carriers are authorized to offer and

 

 

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1        provide radio telecommunications service for hire to
2        subscribers in aircraft.
3            "Call-by-call Basis" means any method of charging
4        for telecommunications services where the price is
5        measured by individual calls.
6            "Communications Channel" means a physical or
7        virtual path of communications over which signals are
8        transmitted between or among customer channel
9        termination points.
10            "Conference bridging service" means an "ancillary
11        service" that links two or more participants of an
12        audio or video conference call and may include the
13        provision of a telephone number. "Conference bridging
14        service" does not include the "telecommunications
15        services" used to reach the conference bridge.
16            "Customer Channel Termination Point" means the
17        location where the customer either inputs or receives
18        the communications.
19            "Detailed telecommunications billing service"
20        means an "ancillary service" of separately stating
21        information pertaining to individual calls on a
22        customer's billing statement.
23            "Directory assistance" means an "ancillary
24        service" of providing telephone number information,
25        and/or address information.
26            "Home service provider" means the facilities based

 

 

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1        carrier or reseller with which the customer contracts
2        for the provision of mobile telecommunications
3        services.
4            "Mobile telecommunications service" means
5        commercial mobile radio service, as defined in Section
6        20.3 of Title 47 of the Code of Federal Regulations as
7        in effect on June 1, 1999.
8            "Place of primary use" means the street address
9        representative of where the customer's use of the
10        telecommunications service primarily occurs, which
11        must be the residential street address or the primary
12        business street address of the customer. In the case of
13        mobile telecommunications services, "place of primary
14        use" must be within the licensed service area of the
15        home service provider.
16            "Post-paid telecommunication service" means the
17        telecommunications service obtained by making a
18        payment on a call-by-call basis either through the use
19        of a credit card or payment mechanism such as a bank
20        card, travel card, credit card, or debit card, or by
21        charge made to a telephone number which is not
22        associated with the origination or termination of the
23        telecommunications service. A post-paid calling
24        service includes telecommunications service, except a
25        prepaid wireless calling service, that would be a
26        prepaid calling service except it is not exclusively a

 

 

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1        telecommunication service.
2            "Prepaid telecommunication service" means the
3        right to access exclusively telecommunications
4        services, which must be paid for in advance and which
5        enables the origination of calls using an access number
6        or authorization code, whether manually or
7        electronically dialed, and that is sold in
8        predetermined units or dollars of which the number
9        declines with use in a known amount.
10            "Prepaid Mobile telecommunication service" means a
11        telecommunications service that provides the right to
12        utilize mobile wireless service as well as other
13        non-telecommunication services, including but not
14        limited to ancillary services, which must be paid for
15        in advance that is sold in predetermined units or
16        dollars of which the number declines with use in a
17        known amount.
18            "Private communication service" means a
19        telecommunication service that entitles the customer
20        to exclusive or priority use of a communications
21        channel or group of channels between or among
22        termination points, regardless of the manner in which
23        such channel or channels are connected, and includes
24        switching capacity, extension lines, stations, and any
25        other associated services that are provided in
26        connection with the use of such channel or channels.

 

 

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1            "Service address" means:
2                (a) The location of the telecommunications
3            equipment to which a customer's call is charged and
4            from which the call originates or terminates,
5            regardless of where the call is billed or paid;
6                (b) If the location in line (a) is not known,
7            service address means the origination point of the
8            signal of the telecommunications services first
9            identified by either the seller's
10            telecommunications system or in information
11            received by the seller from its service provider
12            where the system used to transport such signals is
13            not that of the seller; and
14                (c) If the locations in line (a) and line (b)
15            are not known, the service address means the
16            location of the customer's place of primary use.
17            "Telecommunications service" means the electronic
18        transmission, conveyance, or routing of voice, data,
19        audio, video, or any other information or signals to a
20        point, or between or among points. The term
21        "telecommunications service" includes such
22        transmission, conveyance, or routing in which computer
23        processing applications are used to act on the form,
24        code or protocol of the content for purposes of
25        transmission, conveyance or routing without regard to
26        whether such service is referred to as voice over

 

 

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1        Internet protocol services or is classified by the
2        Federal Communications Commission as enhanced or value
3        added. "Telecommunications service" does not include:
4                (a) Data processing and information services
5            that allow data to be generated, acquired, stored,
6            processed, or retrieved and delivered by an
7            electronic transmission to a purchaser when such
8            purchaser's primary purpose for the underlying
9            transaction is the processed data or information;
10                (b) Installation or maintenance of wiring or
11            equipment on a customer's premises;
12                (c) Tangible personal property;
13                (d) Advertising, including but not limited to
14            directory advertising.
15                (e) Billing and collection services provided
16            to third parties;
17                (f) Internet access service;
18                (g) Radio and television audio and video
19            programming services, regardless of the medium,
20            including the furnishing of transmission,
21            conveyance and routing of such services by the
22            programming service provider. Radio and television
23            audio and video programming services shall include
24            but not be limited to cable service as defined in
25            47 USC 522(6) and audio and video programming
26            services delivered by commercial mobile radio

 

 

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1            service providers, as defined in 47 CFR 20.3;
2                (h) "Ancillary services"; or
3                (i) Digital products "delivered
4            electronically", including but not limited to
5            software, music, video, reading materials or ring
6            tones.
7            "Vertical service" means an "ancillary service"
8        that is offered in connection with one or more
9        "telecommunications services", which offers advanced
10        calling features that allow customers to identify
11        callers and to manage multiple calls and call
12        connections, including "conference bridging services".
13            "Voice mail service" means an "ancillary service"
14        that enables the customer to store, send or receive
15        recorded messages. "Voice mail service" does not
16        include any "vertical services" that the customer may
17        be required to have in order to utilize the "voice mail
18        service".
19            (ii) Receipts from the sale of telecommunications
20        service sold on an individual call-by-call basis are in
21        this State if either of the following applies:
22                (a) The call both originates and terminates in
23            this State.
24                (b) The call either originates or terminates
25            in this State and the service address is located in
26            this State.

 

 

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1            (iii) Receipts from the sale of postpaid
2        telecommunications service at retail are in this State
3        if the origination point of the telecommunication
4        signal, as first identified by the service provider's
5        telecommunication system or as identified by
6        information received by the seller from its service
7        provider if the system used to transport
8        telecommunication signals is not the seller's, is
9        located in this State.
10            (iv) Receipts from the sale of prepaid
11        telecommunications service or prepaid mobile
12        telecommunications service at retail are in this State
13        if the purchaser obtains the prepaid card or similar
14        means of conveyance at a location in this State.
15        Receipts from recharging a prepaid telecommunications
16        service or mobile telecommunications service is in
17        this State if the purchaser's billing information
18        indicates a location in this State.
19            (v) Receipts from the sale of private
20        communication services are in this State as follows:
21                (a) 100% of receipts from charges imposed at
22            each channel termination point in this State.
23                (b) 100% of receipts from charges for the total
24            channel mileage between each channel termination
25            point in this State.
26                (c) 50% of the total receipts from charges for

 

 

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1            service segments when those segments are between 2
2            customer channel termination points, 1 of which is
3            located in this State and the other is located
4            outside of this State, which segments are
5            separately charged.
6                (d) The receipts from charges for service
7            segments with a channel termination point located
8            in this State and in two or more other states, and
9            which segments are not separately billed, are in
10            this State based on a percentage determined by
11            dividing the number of customer channel
12            termination points in this State by the total
13            number of customer channel termination points.
14            (vi) Receipts from charges for ancillary services
15        for telecommunications service sold to customers at
16        retail are in this State if the customer's primary
17        place of use of telecommunications services associated
18        with those ancillary services is in this State. If the
19        seller of those ancillary services cannot determine
20        where the associated telecommunications are located,
21        then the ancillary services shall be based on the
22        location of the purchaser.
23            (vii) Receipts to access a carrier's network or
24        from the sale of telecommunication services or
25        ancillary services for resale are in this State as
26        follows:

 

 

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1                (a) 100% of the receipts from access fees
2            attributable to intrastate telecommunications
3            service that both originates and terminates in
4            this State.
5                (b) 50% of the receipts from access fees
6            attributable to interstate telecommunications
7            service if the interstate call either originates
8            or terminates in this State.
9                (c) 100% of the receipts from interstate end
10            user access line charges, if the customer's
11            service address is in this State. As used in this
12            subdivision, "interstate end user access line
13            charges" includes, but is not limited to, the
14            surcharge approved by the federal communications
15            commission and levied pursuant to 47 CFR 69.
16                (d) Gross receipts from sales of
17            telecommunication services or from ancillary
18            services for telecommunications services sold to
19            other telecommunication service providers for
20            resale shall be sourced to this State using the
21            apportionment concepts used for non-resale
22            receipts of telecommunications services if the
23            information is readily available to make that
24            determination. If the information is not readily
25            available, then the taxpayer may use any other
26            reasonable and consistent method.

 

 

HB4300- 145 -LRB099 14379 HLH 38474 b

1        (B-7) For taxable years ending on or after December 31,
2    2008, receipts from the sale of broadcasting services are
3    in this State if the broadcasting services are received in
4    this State. For purposes of this paragraph (B-7), the
5    following terms have the following meanings:
6            "Advertising revenue" means consideration received
7        by the taxpayer in exchange for broadcasting services
8        or allowing the broadcasting of commercials or
9        announcements in connection with the broadcasting of
10        film or radio programming, from sponsorships of the
11        programming, or from product placements in the
12        programming.
13            "Audience factor" means the ratio that the
14        audience or subscribers located in this State of a
15        station, a network, or a cable system bears to the
16        total audience or total subscribers for that station,
17        network, or cable system. The audience factor for film
18        or radio programming shall be determined by reference
19        to the books and records of the taxpayer or by
20        reference to published rating statistics provided the
21        method used by the taxpayer is consistently used from
22        year to year for this purpose and fairly represents the
23        taxpayer's activity in this State.
24            "Broadcast" or "broadcasting" or "broadcasting
25        services" means the transmission or provision of film
26        or radio programming, whether through the public

 

 

HB4300- 146 -LRB099 14379 HLH 38474 b

1        airwaves, by cable, by direct or indirect satellite
2        transmission, or by any other means of communication,
3        either through a station, a network, or a cable system.
4            "Film" or "film programming" means the broadcast
5        on television of any and all performances, events, or
6        productions, including but not limited to news,
7        sporting events, plays, stories, or other literary,
8        commercial, educational, or artistic works, either
9        live or through the use of video tape, disc, or any
10        other type of format or medium. Each episode of a
11        series of films produced for television shall
12        constitute separate "film" notwithstanding that the
13        series relates to the same principal subject and is
14        produced during one or more tax periods.
15            "Radio" or "radio programming" means the broadcast
16        on radio of any and all performances, events, or
17        productions, including but not limited to news,
18        sporting events, plays, stories, or other literary,
19        commercial, educational, or artistic works, either
20        live or through the use of an audio tape, disc, or any
21        other format or medium. Each episode in a series of
22        radio programming produced for radio broadcast shall
23        constitute a separate "radio programming"
24        notwithstanding that the series relates to the same
25        principal subject and is produced during one or more
26        tax periods.

 

 

HB4300- 147 -LRB099 14379 HLH 38474 b

1                (i) In the case of advertising revenue from
2            broadcasting, the customer is the advertiser and
3            the service is received in this State if the
4            commercial domicile of the advertiser is in this
5            State.
6                (ii) In the case where film or radio
7            programming is broadcast by a station, a network,
8            or a cable system for a fee or other remuneration
9            received from the recipient of the broadcast, the
10            portion of the service that is received in this
11            State is measured by the portion of the recipients
12            of the broadcast located in this State.
13            Accordingly, the fee or other remuneration for
14            such service that is included in the Illinois
15            numerator of the sales factor is the total of those
16            fees or other remuneration received from
17            recipients in Illinois. For purposes of this
18            paragraph, a taxpayer may determine the location
19            of the recipients of its broadcast using the
20            address of the recipient shown in its contracts
21            with the recipient or using the billing address of
22            the recipient in the taxpayer's records.
23                (iii) In the case where film or radio
24            programming is broadcast by a station, a network,
25            or a cable system for a fee or other remuneration
26            from the person providing the programming, the

 

 

HB4300- 148 -LRB099 14379 HLH 38474 b

1            portion of the broadcast service that is received
2            by such station, network, or cable system in this
3            State is measured by the portion of recipients of
4            the broadcast located in this State. Accordingly,
5            the amount of revenue related to such an
6            arrangement that is included in the Illinois
7            numerator of the sales factor is the total fee or
8            other total remuneration from the person providing
9            the programming related to that broadcast
10            multiplied by the Illinois audience factor for
11            that broadcast.
12                (iv) In the case where film or radio
13            programming is provided by a taxpayer that is a
14            network or station to a customer for broadcast in
15            exchange for a fee or other remuneration from that
16            customer the broadcasting service is received at
17            the location of the office of the customer from
18            which the services were ordered in the regular
19            course of the customer's trade or business.
20            Accordingly, in such a case the revenue derived by
21            the taxpayer that is included in the taxpayer's
22            Illinois numerator of the sales factor is the
23            revenue from such customers who receive the
24            broadcasting service in Illinois.
25                (v) In the case where film or radio programming
26            is provided by a taxpayer that is not a network or

 

 

HB4300- 149 -LRB099 14379 HLH 38474 b

1            station to another person for broadcasting in
2            exchange for a fee or other remuneration from that
3            person, the broadcasting service is received at
4            the location of the office of the customer from
5            which the services were ordered in the regular
6            course of the customer's trade or business.
7            Accordingly, in such a case the revenue derived by
8            the taxpayer that is included in the taxpayer's
9            Illinois numerator of the sales factor is the
10            revenue from such customers who receive the
11            broadcasting service in Illinois.
12        (B-8) Gross receipts from winnings under the Illinois
13    Lottery Law from the assignment of a prize under Section
14    13-1 of the Illinois Lottery Law are received in this
15    State. This paragraph (B-8) applies only to taxable years
16    ending on or after December 31, 2013.
17        (C) For taxable years ending before December 31, 2008,
18    sales, other than sales governed by paragraphs (B), (B-1),
19    (B-2), and (B-8) are in this State if:
20            (i) The income-producing activity is performed in
21        this State; or
22            (ii) The income-producing activity is performed
23        both within and without this State and a greater
24        proportion of the income-producing activity is
25        performed within this State than without this State,
26        based on performance costs.

 

 

HB4300- 150 -LRB099 14379 HLH 38474 b

1        (C-5) For taxable years ending on or after December 31,
2    2008, sales, other than sales governed by paragraphs (B),
3    (B-1), (B-2), (B-5), and (B-7), are in this State if any of
4    the following criteria are met:
5            (i) Sales from the sale or lease of real property
6        are in this State if the property is located in this
7        State.
8            (ii) Sales from the lease or rental of tangible
9        personal property are in this State if the property is
10        located in this State during the rental period. Sales
11        from the lease or rental of tangible personal property
12        that is characteristically moving property, including,
13        but not limited to, motor vehicles, rolling stock,
14        aircraft, vessels, or mobile equipment are in this
15        State to the extent that the property is used in this
16        State.
17            (iii) In the case of interest, net gains (but not
18        less than zero) and other items of income from
19        intangible personal property, the sale is in this State
20        if:
21                (a) in the case of a taxpayer who is a dealer
22            in the item of intangible personal property within
23            the meaning of Section 475 of the Internal Revenue
24            Code, the income or gain is received from a
25            customer in this State. For purposes of this
26            subparagraph, a customer is in this State if the

 

 

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1            customer is an individual, trust or estate who is a
2            resident of this State and, for all other
3            customers, if the customer's commercial domicile
4            is in this State. Unless the dealer has actual
5            knowledge of the residence or commercial domicile
6            of a customer during a taxable year, the customer
7            shall be deemed to be a customer in this State if
8            the billing address of the customer, as shown in
9            the records of the dealer, is in this State; or
10                (b) in all other cases, if the
11            income-producing activity of the taxpayer is
12            performed in this State or, if the
13            income-producing activity of the taxpayer is
14            performed both within and without this State, if a
15            greater proportion of the income-producing
16            activity of the taxpayer is performed within this
17            State than in any other state, based on performance
18            costs.
19            (iv) Sales of services are in this State if the
20        services are received in this State. For the purposes
21        of this section, gross receipts from the performance of
22        services provided to a corporation, partnership, or
23        trust may only be attributed to a state where that
24        corporation, partnership, or trust has a fixed place of
25        business. If the state where the services are received
26        is not readily determinable or is a state where the

 

 

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1        corporation, partnership, or trust receiving the
2        service does not have a fixed place of business, the
3        services shall be deemed to be received at the location
4        of the office of the customer from which the services
5        were ordered in the regular course of the customer's
6        trade or business. If the ordering office cannot be
7        determined, the services shall be deemed to be received
8        at the office of the customer to which the services are
9        billed. If the taxpayer is not taxable in the state in
10        which the services are received, the sale must be
11        excluded from both the numerator and the denominator of
12        the sales factor. The Department shall adopt rules
13        prescribing where specific types of service are
14        received, including, but not limited to, publishing,
15        and utility service.
16        (D) For taxable years ending on or after December 31,
17    1995, the following items of income shall not be included
18    in the numerator or denominator of the sales factor:
19    dividends; amounts included under Section 78 of the
20    Internal Revenue Code; and Subpart F income as defined in
21    Section 952 of the Internal Revenue Code. No inference
22    shall be drawn from the enactment of this paragraph (D) in
23    construing this Section for taxable years ending before
24    December 31, 1995.
25        (E) Paragraphs (B-1) and (B-2) shall apply to tax years
26    ending on or after December 31, 1999, provided that a

 

 

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1    taxpayer may elect to apply the provisions of these
2    paragraphs to prior tax years. Such election shall be made
3    in the form and manner prescribed by the Department, shall
4    be irrevocable, and shall apply to all tax years; provided
5    that, if a taxpayer's Illinois income tax liability for any
6    tax year, as assessed under Section 903 prior to January 1,
7    1999, was computed in a manner contrary to the provisions
8    of paragraphs (B-1) or (B-2), no refund shall be payable to
9    the taxpayer for that tax year to the extent such refund is
10    the result of applying the provisions of paragraph (B-1) or
11    (B-2) retroactively. In the case of a unitary business
12    group, such election shall apply to all members of such
13    group for every tax year such group is in existence, but
14    shall not apply to any taxpayer for any period during which
15    that taxpayer is not a member of such group.
16    (b) Insurance companies.
17        (1) In general. Except as otherwise provided by
18    paragraph (2), business income of an insurance company for
19    a taxable year shall be apportioned to this State by
20    multiplying such income by a fraction, the numerator of
21    which is the direct premiums written for insurance upon
22    property or risk in this State, and the denominator of
23    which is the direct premiums written for insurance upon
24    property or risk everywhere. For purposes of this
25    subsection, the term "direct premiums written" means the
26    total amount of direct premiums written, assessments and

 

 

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1    annuity considerations as reported for the taxable year on
2    the annual statement filed by the company with the Illinois
3    Director of Insurance in the form approved by the National
4    Convention of Insurance Commissioners or such other form as
5    may be prescribed in lieu thereof.
6        (2) Reinsurance. If the principal source of premiums
7    written by an insurance company consists of premiums for
8    reinsurance accepted by it, the business income of such
9    company shall be apportioned to this State by multiplying
10    such income by a fraction, the numerator of which is the
11    sum of (i) direct premiums written for insurance upon
12    property or risk in this State, plus (ii) premiums written
13    for reinsurance accepted in respect of property or risk in
14    this State, and the denominator of which is the sum of
15    (iii) direct premiums written for insurance upon property
16    or risk everywhere, plus (iv) premiums written for
17    reinsurance accepted in respect of property or risk
18    everywhere. For purposes of this paragraph, premiums
19    written for reinsurance accepted in respect of property or
20    risk in this State, whether or not otherwise determinable,
21    may, at the election of the company, be determined on the
22    basis of the proportion which premiums written for
23    reinsurance accepted from companies commercially domiciled
24    in Illinois bears to premiums written for reinsurance
25    accepted from all sources, or, alternatively, in the
26    proportion which the sum of the direct premiums written for

 

 

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1    insurance upon property or risk in this State by each
2    ceding company from which reinsurance is accepted bears to
3    the sum of the total direct premiums written by each such
4    ceding company for the taxable year. The election made by a
5    company under this paragraph for its first taxable year
6    ending on or after December 31, 2011, shall be binding for
7    that company for that taxable year and for all subsequent
8    taxable years, and may be altered only with the written
9    permission of the Department, which shall not be
10    unreasonably withheld.
11    (c) Financial organizations.
12        (1) In general. For taxable years ending before
13    December 31, 2008, business income of a financial
14    organization shall be apportioned to this State by
15    multiplying such income by a fraction, the numerator of
16    which is its business income from sources within this
17    State, and the denominator of which is its business income
18    from all sources. For the purposes of this subsection, the
19    business income of a financial organization from sources
20    within this State is the sum of the amounts referred to in
21    subparagraphs (A) through (E) following, but excluding the
22    adjusted income of an international banking facility as
23    determined in paragraph (2):
24            (A) Fees, commissions or other compensation for
25        financial services rendered within this State;
26            (B) Gross profits from trading in stocks, bonds or

 

 

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1        other securities managed within this State;
2            (C) Dividends, and interest from Illinois
3        customers, which are received within this State;
4            (D) Interest charged to customers at places of
5        business maintained within this State for carrying
6        debit balances of margin accounts, without deduction
7        of any costs incurred in carrying such accounts; and
8            (E) Any other gross income resulting from the
9        operation as a financial organization within this
10        State. In computing the amounts referred to in
11        paragraphs (A) through (E) of this subsection, any
12        amount received by a member of an affiliated group
13        (determined under Section 1504(a) of the Internal
14        Revenue Code but without reference to whether any such
15        corporation is an "includible corporation" under
16        Section 1504(b) of the Internal Revenue Code) from
17        another member of such group shall be included only to
18        the extent such amount exceeds expenses of the
19        recipient directly related thereto.
20        (2) International Banking Facility. For taxable years
21    ending before December 31, 2008:
22            (A) Adjusted Income. The adjusted income of an
23        international banking facility is its income reduced
24        by the amount of the floor amount.
25            (B) Floor Amount. The floor amount shall be the
26        amount, if any, determined by multiplying the income of

 

 

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1        the international banking facility by a fraction, not
2        greater than one, which is determined as follows:
3                (i) The numerator shall be:
4                The average aggregate, determined on a
5            quarterly basis, of the financial organization's
6            loans to banks in foreign countries, to foreign
7            domiciled borrowers (except where secured
8            primarily by real estate) and to foreign
9            governments and other foreign official
10            institutions, as reported for its branches,
11            agencies and offices within the state on its
12            "Consolidated Report of Condition", Schedule A,
13            Lines 2.c., 5.b., and 7.a., which was filed with
14            the Federal Deposit Insurance Corporation and
15            other regulatory authorities, for the year 1980,
16            minus
17                The average aggregate, determined on a
18            quarterly basis, of such loans (other than loans of
19            an international banking facility), as reported by
20            the financial institution for its branches,
21            agencies and offices within the state, on the
22            corresponding Schedule and lines of the
23            Consolidated Report of Condition for the current
24            taxable year, provided, however, that in no case
25            shall the amount determined in this clause (the
26            subtrahend) exceed the amount determined in the

 

 

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1            preceding clause (the minuend); and
2                (ii) the denominator shall be the average
3            aggregate, determined on a quarterly basis, of the
4            international banking facility's loans to banks in
5            foreign countries, to foreign domiciled borrowers
6            (except where secured primarily by real estate)
7            and to foreign governments and other foreign
8            official institutions, which were recorded in its
9            financial accounts for the current taxable year.
10            (C) Change to Consolidated Report of Condition and
11        in Qualification. In the event the Consolidated Report
12        of Condition which is filed with the Federal Deposit
13        Insurance Corporation and other regulatory authorities
14        is altered so that the information required for
15        determining the floor amount is not found on Schedule
16        A, lines 2.c., 5.b. and 7.a., the financial institution
17        shall notify the Department and the Department may, by
18        regulations or otherwise, prescribe or authorize the
19        use of an alternative source for such information. The
20        financial institution shall also notify the Department
21        should its international banking facility fail to
22        qualify as such, in whole or in part, or should there
23        be any amendment or change to the Consolidated Report
24        of Condition, as originally filed, to the extent such
25        amendment or change alters the information used in
26        determining the floor amount.

 

 

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1        (3) For taxable years ending on or after December 31,
2    2008, the business income of a financial organization shall
3    be apportioned to this State by multiplying such income by
4    a fraction, the numerator of which is its gross receipts
5    from sources in this State or otherwise attributable to
6    this State's marketplace and the denominator of which is
7    its gross receipts everywhere during the taxable year.
8    "Gross receipts" for purposes of this subparagraph (3)
9    means gross income, including net taxable gain on
10    disposition of assets, including securities and money
11    market instruments, when derived from transactions and
12    activities in the regular course of the financial
13    organization's trade or business. The following examples
14    are illustrative:
15            (i) Receipts from the lease or rental of real or
16        tangible personal property are in this State if the
17        property is located in this State during the rental
18        period. Receipts from the lease or rental of tangible
19        personal property that is characteristically moving
20        property, including, but not limited to, motor
21        vehicles, rolling stock, aircraft, vessels, or mobile
22        equipment are from sources in this State to the extent
23        that the property is used in this State.
24            (ii) Interest income, commissions, fees, gains on
25        disposition, and other receipts from assets in the
26        nature of loans that are secured primarily by real

 

 

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1        estate or tangible personal property are from sources
2        in this State if the security is located in this State.
3            (iii) Interest income, commissions, fees, gains on
4        disposition, and other receipts from consumer loans
5        that are not secured by real or tangible personal
6        property are from sources in this State if the debtor
7        is a resident of this State.
8            (iv) Interest income, commissions, fees, gains on
9        disposition, and other receipts from commercial loans
10        and installment obligations that are not secured by
11        real or tangible personal property are from sources in
12        this State if the proceeds of the loan are to be
13        applied in this State. If it cannot be determined where
14        the funds are to be applied, the income and receipts
15        are from sources in this State if the office of the
16        borrower from which the loan was negotiated in the
17        regular course of business is located in this State. If
18        the location of this office cannot be determined, the
19        income and receipts shall be excluded from the
20        numerator and denominator of the sales factor.
21            (v) Interest income, fees, gains on disposition,
22        service charges, merchant discount income, and other
23        receipts from credit card receivables are from sources
24        in this State if the card charges are regularly billed
25        to a customer in this State.
26            (vi) Receipts from the performance of services,

 

 

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1        including, but not limited to, fiduciary, advisory,
2        and brokerage services, are in this State if the
3        services are received in this State within the meaning
4        of subparagraph (a)(3)(C-5)(iv) of this Section.
5            (vii) Receipts from the issuance of travelers
6        checks and money orders are from sources in this State
7        if the checks and money orders are issued from a
8        location within this State.
9            (viii) Receipts from investment assets and
10        activities and trading assets and activities are
11        included in the receipts factor as follows:
12                (1) Interest, dividends, net gains (but not
13            less than zero) and other income from investment
14            assets and activities from trading assets and
15            activities shall be included in the receipts
16            factor. Investment assets and activities and
17            trading assets and activities include but are not
18            limited to: investment securities; trading account
19            assets; federal funds; securities purchased and
20            sold under agreements to resell or repurchase;
21            options; futures contracts; forward contracts;
22            notional principal contracts such as swaps;
23            equities; and foreign currency transactions. With
24            respect to the investment and trading assets and
25            activities described in subparagraphs (A) and (B)
26            of this paragraph, the receipts factor shall

 

 

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1            include the amounts described in such
2            subparagraphs.
3                    (A) The receipts factor shall include the
4                amount by which interest from federal funds
5                sold and securities purchased under resale
6                agreements exceeds interest expense on federal
7                funds purchased and securities sold under
8                repurchase agreements.
9                    (B) The receipts factor shall include the
10                amount by which interest, dividends, gains and
11                other income from trading assets and
12                activities, including but not limited to
13                assets and activities in the matched book, in
14                the arbitrage book, and foreign currency
15                transactions, exceed amounts paid in lieu of
16                interest, amounts paid in lieu of dividends,
17                and losses from such assets and activities.
18                (2) The numerator of the receipts factor
19            includes interest, dividends, net gains (but not
20            less than zero), and other income from investment
21            assets and activities and from trading assets and
22            activities described in paragraph (1) of this
23            subsection that are attributable to this State.
24                    (A) The amount of interest, dividends, net
25                gains (but not less than zero), and other
26                income from investment assets and activities

 

 

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1                in the investment account to be attributed to
2                this State and included in the numerator is
3                determined by multiplying all such income from
4                such assets and activities by a fraction, the
5                numerator of which is the gross income from
6                such assets and activities which are properly
7                assigned to a fixed place of business of the
8                taxpayer within this State and the denominator
9                of which is the gross income from all such
10                assets and activities.
11                    (B) The amount of interest from federal
12                funds sold and purchased and from securities
13                purchased under resale agreements and
14                securities sold under repurchase agreements
15                attributable to this State and included in the
16                numerator is determined by multiplying the
17                amount described in subparagraph (A) of
18                paragraph (1) of this subsection from such
19                funds and such securities by a fraction, the
20                numerator of which is the gross income from
21                such funds and such securities which are
22                properly assigned to a fixed place of business
23                of the taxpayer within this State and the
24                denominator of which is the gross income from
25                all such funds and such securities.
26                    (C) The amount of interest, dividends,

 

 

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1                gains, and other income from trading assets and
2                activities, including but not limited to
3                assets and activities in the matched book, in
4                the arbitrage book and foreign currency
5                transactions (but excluding amounts described
6                in subparagraphs (A) or (B) of this paragraph),
7                attributable to this State and included in the
8                numerator is determined by multiplying the
9                amount described in subparagraph (B) of
10                paragraph (1) of this subsection by a fraction,
11                the numerator of which is the gross income from
12                such trading assets and activities which are
13                properly assigned to a fixed place of business
14                of the taxpayer within this State and the
15                denominator of which is the gross income from
16                all such assets and activities.
17                    (D) Properly assigned, for purposes of
18                this paragraph (2) of this subsection, means
19                the investment or trading asset or activity is
20                assigned to the fixed place of business with
21                which it has a preponderance of substantive
22                contacts. An investment or trading asset or
23                activity assigned by the taxpayer to a fixed
24                place of business without the State shall be
25                presumed to have been properly assigned if:
26                        (i) the taxpayer has assigned, in the

 

 

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1                    regular course of its business, such asset
2                    or activity on its records to a fixed place
3                    of business consistent with federal or
4                    state regulatory requirements;
5                        (ii) such assignment on its records is
6                    based upon substantive contacts of the
7                    asset or activity to such fixed place of
8                    business; and
9                        (iii) the taxpayer uses such records
10                    reflecting assignment of such assets or
11                    activities for the filing of all state and
12                    local tax returns for which an assignment
13                    of such assets or activities to a fixed
14                    place of business is required.
15                    (E) The presumption of proper assignment
16                of an investment or trading asset or activity
17                provided in subparagraph (D) of paragraph (2)
18                of this subsection may be rebutted upon a
19                showing by the Department, supported by a
20                preponderance of the evidence, that the
21                preponderance of substantive contacts
22                regarding such asset or activity did not occur
23                at the fixed place of business to which it was
24                assigned on the taxpayer's records. If the
25                fixed place of business that has a
26                preponderance of substantive contacts cannot

 

 

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1                be determined for an investment or trading
2                asset or activity to which the presumption in
3                subparagraph (D) of paragraph (2) of this
4                subsection does not apply or with respect to
5                which that presumption has been rebutted, that
6                asset or activity is properly assigned to the
7                state in which the taxpayer's commercial
8                domicile is located. For purposes of this
9                subparagraph (E), it shall be presumed,
10                subject to rebuttal, that taxpayer's
11                commercial domicile is in the state of the
12                United States or the District of Columbia to
13                which the greatest number of employees are
14                regularly connected with the management of the
15                investment or trading income or out of which
16                they are working, irrespective of where the
17                services of such employees are performed, as of
18                the last day of the taxable year.
19        (4) (Blank).
20        (5) (Blank).
21    (c-1) Federally regulated exchanges. For taxable years
22ending on or after December 31, 2012, business income of a
23federally regulated exchange shall, at the option of the
24federally regulated exchange, be apportioned to this State by
25multiplying such income by a fraction, the numerator of which
26is its business income from sources within this State, and the

 

 

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1denominator of which is its business income from all sources.
2For purposes of this subsection, the business income within
3this State of a federally regulated exchange is the sum of the
4following:
5        (1) Receipts attributable to transactions executed on
6    a physical trading floor if that physical trading floor is
7    located in this State.
8        (2) Receipts attributable to all other matching,
9    execution, or clearing transactions, including without
10    limitation receipts from the provision of matching,
11    execution, or clearing services to another entity,
12    multiplied by (i) for taxable years ending on or after
13    December 31, 2012 but before December 31, 2013, 63.77%; and
14    (ii) for taxable years ending on or after December 31,
15    2013, 27.54%.
16        (3) All other receipts not governed by subparagraphs
17    (1) or (2) of this subsection (c-1), to the extent the
18    receipts would be characterized as "sales in this State"
19    under item (3) of subsection (a) of this Section.
20    "Federally regulated exchange" means (i) a "registered
21entity" within the meaning of 7 U.S.C. Section 1a(40)(A), (B),
22or (C), (ii) an "exchange" or "clearing agency" within the
23meaning of 15 U.S.C. Section 78c (a)(1) or (23), (iii) any such
24entities regulated under any successor regulatory structure to
25the foregoing, and (iv) all taxpayers who are members of the
26same unitary business group as a federally regulated exchange,

 

 

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1determined without regard to the prohibition in Section
21501(a)(27) of this Act against including in a unitary business
3group taxpayers who are ordinarily required to apportion
4business income under different subsections of this Section;
5provided that this subparagraph (iv) shall apply only if 50% or
6more of the business receipts of the unitary business group
7determined by application of this subparagraph (iv) for the
8taxable year are attributable to the matching, execution, or
9clearing of transactions conducted by an entity described in
10subparagraph (i), (ii), or (iii) of this paragraph.
11    In no event shall the Illinois apportionment percentage
12computed in accordance with this subsection (c-1) for any
13taxpayer for any tax year be less than the Illinois
14apportionment percentage computed under this subsection (c-1)
15for that taxpayer for the first full tax year ending on or
16after December 31, 2013 for which this subsection (c-1) applied
17to the taxpayer.
18    (d) Transportation services. For taxable years ending
19before December 31, 2008, business income derived from
20furnishing transportation services shall be apportioned to
21this State in accordance with paragraphs (1) and (2):
22        (1) Such business income (other than that derived from
23    transportation by pipeline) shall be apportioned to this
24    State by multiplying such income by a fraction, the
25    numerator of which is the revenue miles of the person in
26    this State, and the denominator of which is the revenue

 

 

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1    miles of the person everywhere. For purposes of this
2    paragraph, a revenue mile is the transportation of 1
3    passenger or 1 net ton of freight the distance of 1 mile
4    for a consideration. Where a person is engaged in the
5    transportation of both passengers and freight, the
6    fraction above referred to shall be determined by means of
7    an average of the passenger revenue mile fraction and the
8    freight revenue mile fraction, weighted to reflect the
9    person's
10            (A) relative railway operating income from total
11        passenger and total freight service, as reported to the
12        Interstate Commerce Commission, in the case of
13        transportation by railroad, and
14            (B) relative gross receipts from passenger and
15        freight transportation, in case of transportation
16        other than by railroad.
17        (2) Such business income derived from transportation
18    by pipeline shall be apportioned to this State by
19    multiplying such income by a fraction, the numerator of
20    which is the revenue miles of the person in this State, and
21    the denominator of which is the revenue miles of the person
22    everywhere. For the purposes of this paragraph, a revenue
23    mile is the transportation by pipeline of 1 barrel of oil,
24    1,000 cubic feet of gas, or of any specified quantity of
25    any other substance, the distance of 1 mile for a
26    consideration.

 

 

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1        (3) For taxable years ending on or after December 31,
2    2008, business income derived from providing
3    transportation services other than airline services shall
4    be apportioned to this State by using a fraction, (a) the
5    numerator of which shall be (i) all receipts from any
6    movement or shipment of people, goods, mail, oil, gas, or
7    any other substance (other than by airline) that both
8    originates and terminates in this State, plus (ii) that
9    portion of the person's gross receipts from movements or
10    shipments of people, goods, mail, oil, gas, or any other
11    substance (other than by airline) that originates in one
12    state or jurisdiction and terminates in another state or
13    jurisdiction, that is determined by the ratio that the
14    miles traveled in this State bears to total miles
15    everywhere and (b) the denominator of which shall be all
16    revenue derived from the movement or shipment of people,
17    goods, mail, oil, gas, or any other substance (other than
18    by airline). Where a taxpayer is engaged in the
19    transportation of both passengers and freight, the
20    fraction above referred to shall first be determined
21    separately for passenger miles and freight miles. Then an
22    average of the passenger miles fraction and the freight
23    miles fraction shall be weighted to reflect the taxpayer's:
24            (A) relative railway operating income from total
25        passenger and total freight service, as reported to the
26        Surface Transportation Board, in the case of

 

 

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1        transportation by railroad; and
2            (B) relative gross receipts from passenger and
3        freight transportation, in case of transportation
4        other than by railroad.
5        (4) For taxable years ending on or after December 31,
6    2008, business income derived from furnishing airline
7    transportation services shall be apportioned to this State
8    by multiplying such income by a fraction, the numerator of
9    which is the revenue miles of the person in this State, and
10    the denominator of which is the revenue miles of the person
11    everywhere. For purposes of this paragraph, a revenue mile
12    is the transportation of one passenger or one net ton of
13    freight the distance of one mile for a consideration. If a
14    person is engaged in the transportation of both passengers
15    and freight, the fraction above referred to shall be
16    determined by means of an average of the passenger revenue
17    mile fraction and the freight revenue mile fraction,
18    weighted to reflect the person's relative gross receipts
19    from passenger and freight airline transportation.
20    (e) Combined apportionment. Where 2 or more persons are
21engaged in a unitary business as described in subsection
22(a)(27) of Section 1501, a part of which is conducted in this
23State by one or more members of the group, the business income
24attributable to this State by any such member or members shall
25be apportioned by means of the combined apportionment method.
26    (f) Alternative allocation. If the allocation and

 

 

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1apportionment provisions of subsections (a) through (e) and of
2subsection (h) do not, for taxable years ending before December
331, 2008, fairly represent the extent of a person's business
4activity in this State, or, for taxable years ending on or
5after December 31, 2008, fairly represent the market for the
6person's goods, services, or other sources of business income,
7the person may petition for, or the Director may, without a
8petition, permit or require, in respect of all or any part of
9the person's business activity, if reasonable:
10        (1) Separate accounting;
11        (2) The exclusion of any one or more factors;
12        (3) The inclusion of one or more additional factors
13    which will fairly represent the person's business
14    activities or market in this State; or
15        (4) The employment of any other method to effectuate an
16    equitable allocation and apportionment of the person's
17    business income.
18    (g) Cross reference. For allocation of business income by
19residents, see Section 301(a).
20    (h) For tax years ending on or after December 31, 1998, and
21ending on or before December 31, 2015, the apportionment factor
22of persons who apportion their business income to this State
23under subsection (a) shall be equal to:
24        (1) for tax years ending on or after December 31, 1998
25    and before December 31, 1999, 16 2/3% of the property
26    factor plus 16 2/3% of the payroll factor plus 66 2/3% of

 

 

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1    the sales factor;
2        (2) for tax years ending on or after December 31, 1999
3    and before December 31, 2000, 8 1/3% of the property factor
4    plus 8 1/3% of the payroll factor plus 83 1/3% of the sales
5    factor;
6        (3) for tax years ending on or after December 31, 2000,
7    the sales factor.
8If, in any tax year ending on or after December 31, 1998 and
9before December 31, 2000, the denominator of the payroll,
10property, or sales factor is zero, the apportionment factor
11computed in paragraph (1) or (2) of this subsection for that
12year shall be divided by an amount equal to 100% minus the
13percentage weight given to each factor whose denominator is
14equal to zero.
15(Source: P.A. 97-507, eff. 8-23-11; 97-636, eff. 6-1-12;
1698-478, eff. 1-1-14; 98-496, eff. 1-1-14; 98-756, eff.
177-16-14.)
 
18    (35 ILCS 5/309 new)
19    Sec. 309. Water's edge election; inclusion of tax havens.
20    (a) As used in this Section:
21        "Affiliated corporation" means a United States parent
22    corporation and any subsidiary of which more than 50% of
23    the voting stock is owned directly or indirectly by another
24    corporate member of the water's-edge combined group.
25        "United States" means the 50 states of the United

 

 

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1    States and the District of Columbia.
2        "Water's edge combined group" means all corporations
3    or entities included in the election of a taxpayer under
4    this Section.
5    (b) Notwithstanding any other provisions of law, a taxpayer
6subject to the taxes imposed under subsections (a) and (b) of
7Section 201 of this Act may apportion its income under this
8Section. A return under filed by a taxpayer that elects to
9apportion its income under this Section must include the income
10and apportionment factors of the following affiliated
11corporations only:
12        (1) a corporation incorporated in the United States in
13    a unitary relationship with the taxpayer and eligible to be
14    included in a federal consolidated return as described in
15    26 U.S.C. 1501 through 1505 that has more than 20% of its
16    payroll and property assignable to locations inside the
17    United States; for purposes of determining eligibility for
18    inclusion in a federal consolidated return under this
19    subsection (1)(a), the 80% stock ownership requirements of
20    26 U.S.C. 1504 must be reduced to ownership of over 50% of
21    the voting stock directly or indirectly owned or controlled
22    by an includable corporation;
23        (2) domestic international sales corporations, as
24    described in 26 U.S.C. 991 through 994, and foreign sales
25    corporations, as described in 26 U.S.C. 921 through 927;
26        (3) export trade corporations, as described in 26

 

 

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1    U.S.C. 970 and 971;
2        (4) foreign corporations deriving gain or loss from
3    disposition of a United States real property interest to
4    the extent recognized under 26 U.S.C. 897;
5        (5) a corporation incorporated outside the United
6    States if over 50% of its voting stock is owned directly or
7    indirectly by the taxpayer and if more than 20% of the
8    average of its payroll and property is assignable to a
9    location inside the United States; or
10        (6) a corporation that is in a unitary relationship
11    with the taxpayer and that is incorporated in a tax haven,
12    including Andorra, Anguilla, Antigua and Barbuda, Aruba,
13    the Bahamas, Bahrain, Barbados, Belize, Bermuda, British
14    Virgin Islands, Cayman Islands, Cook Islands, Cyprus,
15    Dominica, Gibraltar, Grenada, Guernsey-Sark-Alderney, Isle
16    of Man, Jersey, Liberia, Liechtenstein, Luxembourg, Malta,
17    Marshall Islands, Mauritius, Monaco, Montserrat, Nauru,
18    Netherlands Antilles, Niue, Panama, Samoa, San Marino,
19    Seychelles, St. Kitts and Nevis, St. Lucia, St. Vincent and
20    the Grenadines, Turks and Caicos Islands, U.S. Virgin
21    Islands, and Vanuatu.
22    (c) For purposes of paragraphs (1) through (5) of
23subsection (b), the location of payroll and property shall be
24determined under the individual state's laws and regulations
25that set forth the apportionment formulas used to assign net
26income subject to taxes on or measured by net income. If a

 

 

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1state does not impose a tax on or measured by net income,
2apportionment is determined under this Act. For the purposes of
3paragraph (6) of subsection (b), income shifted to a tax haven,
4to the extent taxable, is considered income subject to
5apportionment.
6    (d) A water's edge election may be made by a taxpayer and
7is effective only if every affiliated corporation subject to
8the taxes imposed under this Act consents to the election.
9Consent by the common parent of an affiliated group constitutes
10consent of all members of the group. An affiliated corporation
11that becomes subject to taxes under this Act after the water's
12edge election is considered to have consented to the election.
13The election must disclose the identity of the taxpayer and the
14identity of any affiliated corporation, including an
15affiliated corporation incorporated in a tax haven set forth in
16paragraph (6) of subsection (b), in which the taxpayer owns
17directly or indirectly more than 50% of the voting stock of the
18affiliated corporation.
19    (e) Each water's edge election must be for a 3-year
20renewable period. A water's edge election may be changed by a
21taxpayer before the end of each 3-year period only with the
22permission of the Department. In granting a change of election,
23the Department shall impose reasonable conditions that are
24necessary to prevent the avoidance of tax or clearly reflect
25income for the election period prior to the change.
26    (f) For the purposes of this Section, dividends received

 

 

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1from corporations incorporated outside the United States, to
2the extent taxable, are considered income subject to
3apportionment. The after-tax net income of United States
4corporations excluded from eligibility as affiliated
5corporations under this Section and possession corporations
6described in sections 931 through 934 and 936 of the Internal
7Revenue Code are considered dividends received from
8corporations incorporated outside the United States. Eighty
9percent of all dividends apportionable under this Section must
10be excluded from income subject to apportionment. "Deemed"
11distributions, as set forth in section 78 of the Internal
12Revenue Code, and corresponding amounts with respect to
13dividends considered received under this subsection must be
14excluded from the income of the water's-edge combined group.
15The dividends apportionable under this subsection are in lieu
16of any expenses attributable to dividend income. A dividend
17from a corporation required to be combined in the water's edge
18combined group must be eliminated from the calculation of
19apportionable income.
 
20    (35 ILCS 5/901)  (from Ch. 120, par. 9-901)
21    Sec. 901. Collection authority.
22    (a) In general.
23    The Department shall collect the taxes imposed by this Act.
24The Department shall collect certified past due child support
25amounts under Section 2505-650 of the Department of Revenue Law

 

 

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1(20 ILCS 2505/2505-650). Except as provided in subsections (c),
2(e), (f), (g), and (h) of this Section, money collected
3pursuant to subsections (a) and (b) of Section 201 of this Act
4shall be paid into the General Revenue Fund in the State
5treasury; money collected pursuant to subsections (c) and (d)
6of Section 201 of this Act shall be paid into the Personal
7Property Tax Replacement Fund, a special fund in the State
8Treasury; and money collected under Section 2505-650 of the
9Department of Revenue Law (20 ILCS 2505/2505-650) shall be paid
10into the Child Support Enforcement Trust Fund, a special fund
11outside the State Treasury, or to the State Disbursement Unit
12established under Section 10-26 of the Illinois Public Aid
13Code, as directed by the Department of Healthcare and Family
14Services.
15    (b) Local Government Distributive Fund.
16    Beginning August 1, 1969, and continuing through June 30,
171994, the Treasurer shall transfer each month from the General
18Revenue Fund to a special fund in the State treasury, to be
19known as the "Local Government Distributive Fund", an amount
20equal to 1/12 of the net revenue realized from the tax imposed
21by subsections (a) and (b) of Section 201 of this Act during
22the preceding month. Beginning July 1, 1994, and continuing
23through June 30, 1995, the Treasurer shall transfer each month
24from the General Revenue Fund to the Local Government
25Distributive Fund an amount equal to 1/11 of the net revenue
26realized from the tax imposed by subsections (a) and (b) of

 

 

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1Section 201 of this Act during the preceding month. Beginning
2July 1, 1995 and continuing through January 31, 2011, the
3Treasurer shall transfer each month from the General Revenue
4Fund to the Local Government Distributive Fund an amount equal
5to the net of (i) 1/10 of the net revenue realized from the tax
6imposed by subsections (a) and (b) of Section 201 of the
7Illinois Income Tax Act during the preceding month (ii) minus,
8beginning July 1, 2003 and ending June 30, 2004, $6,666,666,
9and beginning July 1, 2004, zero. Beginning February 1, 2011,
10and continuing through January 31, 2015, the Treasurer shall
11transfer each month from the General Revenue Fund to the Local
12Government Distributive Fund an amount equal to the sum of (i)
136% (10% of the ratio of the 3% individual income tax rate prior
14to 2011 to the 5% individual income tax rate after 2010) of the
15net revenue realized from the tax imposed by subsections (a)
16and (b) of Section 201 of this Act upon individuals, trusts,
17and estates during the preceding month and (ii) 6.86% (10% of
18the ratio of the 4.8% corporate income tax rate prior to 2011
19to the 7% corporate income tax rate after 2010) of the net
20revenue realized from the tax imposed by subsections (a) and
21(b) of Section 201 of this Act upon corporations during the
22preceding month. Beginning February 1, 2015 and continuing
23through January 31, 2016 January 31, 2025, the Treasurer shall
24transfer each month from the General Revenue Fund to the Local
25Government Distributive Fund an amount equal to the sum of (i)
268% (10% of the ratio of the 3% individual income tax rate prior

 

 

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1to 2011 to the 3.75% individual income tax rate after 2014) of
2the net revenue realized from the tax imposed by subsections
3(a) and (b) of Section 201 of this Act upon individuals,
4trusts, and estates during the preceding month and (ii) 9.14%
5(10% of the ratio of the 4.8% corporate income tax rate prior
6to 2011 to the 5.25% corporate income tax rate after 2014) of
7the net revenue realized from the tax imposed by subsections
8(a) and (b) of Section 201 of this Act upon corporations during
9the preceding month. Beginning February 1, 2016 and continuing
10through January 31, 2025, the Treasurer shall transfer each
11month from the General Revenue Fund to the Local Government
12Distributive Fund an amount equal to the sum of (i) 7.2% (9% of
13the ratio of the 3% individual income tax rate prior to 2011 to
14the 3.75% individual income tax rate after 2014) of the net
15revenue realized from the tax imposed by subsections (a) and
16(b) of Section 201 of this Act upon individuals, trusts, and
17estates during the preceding month and (ii) 8.23% (9% of the
18ratio of the 4.8% corporate income tax rate prior to 2011 to
19the 5.25% corporate income tax rate after 2014) of the net
20revenue realized from the tax imposed by subsections (a) and
21(b) of Section 201 of this Act upon corporations during the
22preceding month. Beginning February 1, 2025, the Treasurer
23shall transfer each month from the General Revenue Fund to the
24Local Government Distributive Fund an amount equal to the sum
25of (i) 8.31% 9.23% (9% 10% of the ratio of the 3% individual
26income tax rate prior to 2011 to the 3.25% individual income

 

 

HB4300- 181 -LRB099 14379 HLH 38474 b

1tax rate after 2024) of the net revenue realized from the tax
2imposed by subsections (a) and (b) of Section 201 of this Act
3upon individuals, trusts, and estates during the preceding
4month and (ii) 9% 10% of the net revenue realized from the tax
5imposed by subsections (a) and (b) of Section 201 of this Act
6upon corporations during the preceding month. Net revenue
7realized for a month shall be defined as the revenue from the
8tax imposed by subsections (a) and (b) of Section 201 of this
9Act which is deposited in the General Revenue Fund, the
10Education Assistance Fund, the Income Tax Surcharge Local
11Government Distributive Fund, the Fund for the Advancement of
12Education, and the Commitment to Human Services Fund during the
13month minus the amount paid out of the General Revenue Fund in
14State warrants during that same month as refunds to taxpayers
15for overpayment of liability under the tax imposed by
16subsections (a) and (b) of Section 201 of this Act.
17    Beginning on August 26, 2014 (the effective date of Public
18Act 98-1052), the Comptroller shall perform the transfers
19required by this subsection (b) no later than 60 days after he
20or she receives the certification from the Treasurer as
21provided in Section 1 of the State Revenue Sharing Act.
22    (c) Deposits Into Income Tax Refund Fund.
23        (1) Beginning on January 1, 1989 and thereafter, the
24    Department shall deposit a percentage of the amounts
25    collected pursuant to subsections (a) and (b)(1), (2), and
26    (3), of Section 201 of this Act into a fund in the State

 

 

HB4300- 182 -LRB099 14379 HLH 38474 b

1    treasury known as the Income Tax Refund Fund. The
2    Department shall deposit 6% of such amounts during the
3    period beginning January 1, 1989 and ending on June 30,
4    1989. Beginning with State fiscal year 1990 and for each
5    fiscal year thereafter, the percentage deposited into the
6    Income Tax Refund Fund during a fiscal year shall be the
7    Annual Percentage. For fiscal years 1999 through 2001, the
8    Annual Percentage shall be 7.1%. For fiscal year 2003, the
9    Annual Percentage shall be 8%. For fiscal year 2004, the
10    Annual Percentage shall be 11.7%. Upon the effective date
11    of this amendatory Act of the 93rd General Assembly, the
12    Annual Percentage shall be 10% for fiscal year 2005. For
13    fiscal year 2006, the Annual Percentage shall be 9.75%. For
14    fiscal year 2007, the Annual Percentage shall be 9.75%. For
15    fiscal year 2008, the Annual Percentage shall be 7.75%. For
16    fiscal year 2009, the Annual Percentage shall be 9.75%. For
17    fiscal year 2010, the Annual Percentage shall be 9.75%. For
18    fiscal year 2011, the Annual Percentage shall be 8.75%. For
19    fiscal year 2012, the Annual Percentage shall be 8.75%. For
20    fiscal year 2013, the Annual Percentage shall be 9.75%. For
21    fiscal year 2014, the Annual Percentage shall be 9.5%. For
22    fiscal year 2015, the Annual Percentage shall be 10%. For
23    all other fiscal years, the Annual Percentage shall be
24    calculated as a fraction, the numerator of which shall be
25    the amount of refunds approved for payment by the
26    Department during the preceding fiscal year as a result of

 

 

HB4300- 183 -LRB099 14379 HLH 38474 b

1    overpayment of tax liability under subsections (a) and
2    (b)(1), (2), and (3) of Section 201 of this Act plus the
3    amount of such refunds remaining approved but unpaid at the
4    end of the preceding fiscal year, minus the amounts
5    transferred into the Income Tax Refund Fund from the
6    Tobacco Settlement Recovery Fund, and the denominator of
7    which shall be the amounts which will be collected pursuant
8    to subsections (a) and (b)(1), (2), and (3) of Section 201
9    of this Act during the preceding fiscal year; except that
10    in State fiscal year 2002, the Annual Percentage shall in
11    no event exceed 7.6%. The Director of Revenue shall certify
12    the Annual Percentage to the Comptroller on the last
13    business day of the fiscal year immediately preceding the
14    fiscal year for which it is to be effective.
15        (2) Beginning on January 1, 1989 and thereafter, the
16    Department shall deposit a percentage of the amounts
17    collected pursuant to subsections (a) and (b)(6), (7), and
18    (8), (c) and (d) of Section 201 of this Act into a fund in
19    the State treasury known as the Income Tax Refund Fund. The
20    Department shall deposit 18% of such amounts during the
21    period beginning January 1, 1989 and ending on June 30,
22    1989. Beginning with State fiscal year 1990 and for each
23    fiscal year thereafter, the percentage deposited into the
24    Income Tax Refund Fund during a fiscal year shall be the
25    Annual Percentage. For fiscal years 1999, 2000, and 2001,
26    the Annual Percentage shall be 19%. For fiscal year 2003,

 

 

HB4300- 184 -LRB099 14379 HLH 38474 b

1    the Annual Percentage shall be 27%. For fiscal year 2004,
2    the Annual Percentage shall be 32%. Upon the effective date
3    of this amendatory Act of the 93rd General Assembly, the
4    Annual Percentage shall be 24% for fiscal year 2005. For
5    fiscal year 2006, the Annual Percentage shall be 20%. For
6    fiscal year 2007, the Annual Percentage shall be 17.5%. For
7    fiscal year 2008, the Annual Percentage shall be 15.5%. For
8    fiscal year 2009, the Annual Percentage shall be 17.5%. For
9    fiscal year 2010, the Annual Percentage shall be 17.5%. For
10    fiscal year 2011, the Annual Percentage shall be 17.5%. For
11    fiscal year 2012, the Annual Percentage shall be 17.5%. For
12    fiscal year 2013, the Annual Percentage shall be 14%. For
13    fiscal year 2014, the Annual Percentage shall be 13.4%. For
14    fiscal year 2015, the Annual Percentage shall be 14%. For
15    all other fiscal years, the Annual Percentage shall be
16    calculated as a fraction, the numerator of which shall be
17    the amount of refunds approved for payment by the
18    Department during the preceding fiscal year as a result of
19    overpayment of tax liability under subsections (a) and
20    (b)(6), (7), and (8), (c) and (d) of Section 201 of this
21    Act plus the amount of such refunds remaining approved but
22    unpaid at the end of the preceding fiscal year, and the
23    denominator of which shall be the amounts which will be
24    collected pursuant to subsections (a) and (b)(6), (7), and
25    (8), (c) and (d) of Section 201 of this Act during the
26    preceding fiscal year; except that in State fiscal year

 

 

HB4300- 185 -LRB099 14379 HLH 38474 b

1    2002, the Annual Percentage shall in no event exceed 23%.
2    The Director of Revenue shall certify the Annual Percentage
3    to the Comptroller on the last business day of the fiscal
4    year immediately preceding the fiscal year for which it is
5    to be effective.
6        (3) The Comptroller shall order transferred and the
7    Treasurer shall transfer from the Tobacco Settlement
8    Recovery Fund to the Income Tax Refund Fund (i) $35,000,000
9    in January, 2001, (ii) $35,000,000 in January, 2002, and
10    (iii) $35,000,000 in January, 2003.
11    (d) Expenditures from Income Tax Refund Fund.
12        (1) Beginning January 1, 1989, money in the Income Tax
13    Refund Fund shall be expended exclusively for the purpose
14    of paying refunds resulting from overpayment of tax
15    liability under Section 201 of this Act, for paying rebates
16    under Section 208.1 in the event that the amounts in the
17    Homeowners' Tax Relief Fund are insufficient for that
18    purpose, and for making transfers pursuant to this
19    subsection (d).
20        (2) The Director shall order payment of refunds
21    resulting from overpayment of tax liability under Section
22    201 of this Act from the Income Tax Refund Fund only to the
23    extent that amounts collected pursuant to Section 201 of
24    this Act and transfers pursuant to this subsection (d) and
25    item (3) of subsection (c) have been deposited and retained
26    in the Fund.

 

 

HB4300- 186 -LRB099 14379 HLH 38474 b

1        (3) As soon as possible after the end of each fiscal
2    year, the Director shall order transferred and the State
3    Treasurer and State Comptroller shall transfer from the
4    Income Tax Refund Fund to the Personal Property Tax
5    Replacement Fund an amount, certified by the Director to
6    the Comptroller, equal to the excess of the amount
7    collected pursuant to subsections (c) and (d) of Section
8    201 of this Act deposited into the Income Tax Refund Fund
9    during the fiscal year over the amount of refunds resulting
10    from overpayment of tax liability under subsections (c) and
11    (d) of Section 201 of this Act paid from the Income Tax
12    Refund Fund during the fiscal year.
13        (4) As soon as possible after the end of each fiscal
14    year, the Director shall order transferred and the State
15    Treasurer and State Comptroller shall transfer from the
16    Personal Property Tax Replacement Fund to the Income Tax
17    Refund Fund an amount, certified by the Director to the
18    Comptroller, equal to the excess of the amount of refunds
19    resulting from overpayment of tax liability under
20    subsections (c) and (d) of Section 201 of this Act paid
21    from the Income Tax Refund Fund during the fiscal year over
22    the amount collected pursuant to subsections (c) and (d) of
23    Section 201 of this Act deposited into the Income Tax
24    Refund Fund during the fiscal year.
25        (4.5) As soon as possible after the end of fiscal year
26    1999 and of each fiscal year thereafter, the Director shall

 

 

HB4300- 187 -LRB099 14379 HLH 38474 b

1    order transferred and the State Treasurer and State
2    Comptroller shall transfer from the Income Tax Refund Fund
3    to the General Revenue Fund any surplus remaining in the
4    Income Tax Refund Fund as of the end of such fiscal year;
5    excluding for fiscal years 2000, 2001, and 2002 amounts
6    attributable to transfers under item (3) of subsection (c)
7    less refunds resulting from the earned income tax credit.
8        (5) This Act shall constitute an irrevocable and
9    continuing appropriation from the Income Tax Refund Fund
10    for the purpose of paying refunds upon the order of the
11    Director in accordance with the provisions of this Section.
12    (e) Deposits into the Education Assistance Fund and the
13Income Tax Surcharge Local Government Distributive Fund.
14    On July 1, 1991, and thereafter, of the amounts collected
15pursuant to subsections (a) and (b) of Section 201 of this Act,
16minus deposits into the Income Tax Refund Fund, the Department
17shall deposit 7.3% into the Education Assistance Fund in the
18State Treasury. Beginning July 1, 1991, and continuing through
19January 31, 1993, of the amounts collected pursuant to
20subsections (a) and (b) of Section 201 of the Illinois Income
21Tax Act, minus deposits into the Income Tax Refund Fund, the
22Department shall deposit 3.0% into the Income Tax Surcharge
23Local Government Distributive Fund in the State Treasury.
24Beginning February 1, 1993 and continuing through June 30,
251993, of the amounts collected pursuant to subsections (a) and
26(b) of Section 201 of the Illinois Income Tax Act, minus

 

 

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1deposits into the Income Tax Refund Fund, the Department shall
2deposit 4.4% into the Income Tax Surcharge Local Government
3Distributive Fund in the State Treasury. Beginning July 1,
41993, and continuing through June 30, 1994, of the amounts
5collected under subsections (a) and (b) of Section 201 of this
6Act, minus deposits into the Income Tax Refund Fund, the
7Department shall deposit 1.475% into the Income Tax Surcharge
8Local Government Distributive Fund in the State Treasury.
9    (f) Deposits into the Fund for the Advancement of
10Education. Beginning February 1, 2015, the Department shall
11deposit the following portions of the revenue realized from the
12tax imposed upon individuals, trusts, and estates by
13subsections (a) and (b) of Section 201 of this Act during the
14preceding month, minus deposits into the Income Tax Refund
15Fund, into the Fund for the Advancement of Education:
16        (1) beginning February 1, 2015, and prior to February
17    1, 2025, 1/30; and
18        (2) beginning February 1, 2025, 1/26.
19    If the rate of tax imposed by subsection (a) and (b) of
20Section 201 is reduced pursuant to Section 201.5 of this Act,
21the Department shall not make the deposits required by this
22subsection (f) on or after the effective date of the reduction.
23    (g) Deposits into the Commitment to Human Services Fund.
24Beginning February 1, 2015, the Department shall deposit the
25following portions of the revenue realized from the tax imposed
26upon individuals, trusts, and estates by subsections (a) and

 

 

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1(b) of Section 201 of this Act during the preceding month,
2minus deposits into the Income Tax Refund Fund, into the
3Commitment to Human Services Fund:
4        (1) beginning February 1, 2015, and prior to February
5    1, 2025, 1/30; and
6        (2) beginning February 1, 2025, 1/26.
7    If the rate of tax imposed by subsection (a) and (b) of
8Section 201 is reduced pursuant to Section 201.5 of this Act,
9the Department shall not make the deposits required by this
10subsection (g) on or after the effective date of the reduction.
11    (h) Deposits into the Tax Compliance and Administration
12Fund. Beginning on the first day of the first calendar month to
13occur on or after August 26, 2014 (the effective date of Public
14Act 98-1098), each month the Department shall pay into the Tax
15Compliance and Administration Fund, to be used, subject to
16appropriation, to fund additional auditors and compliance
17personnel at the Department, an amount equal to 1/12 of 5% of
18the cash receipts collected during the preceding fiscal year by
19the Audit Bureau of the Department from the tax imposed by
20subsections (a), (b), (c), and (d) of Section 201 of this Act,
21net of deposits into the Income Tax Refund Fund made from those
22cash receipts.
23(Source: P.A. 98-24, eff. 6-19-13; 98-674, eff. 6-30-14;
2498-1052, eff. 8-26-14; 98-1098, eff. 8-26-14; 99-78, eff.
257-20-15.)
 

 

 

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1    (35 ILCS 5/1501)  (from Ch. 120, par. 15-1501)
2    Sec. 1501. Definitions.
3    (a) In general. When used in this Act, where not otherwise
4distinctly expressed or manifestly incompatible with the
5intent thereof:
6        (1) Business income. The term "business income" means
7    all income that may be treated as apportionable business
8    income under the Constitution of the United States.
9    Business income is net of the deductions allocable thereto.
10    Such term does not include compensation or the deductions
11    allocable thereto. For each taxable year beginning on or
12    after January 1, 2003, a taxpayer may elect to treat all
13    income other than compensation as business income. This
14    election shall be made in accordance with rules adopted by
15    the Department and, once made, shall be irrevocable.
16        (1.5) Captive real estate investment trust:
17            (A) The term "captive real estate investment
18        trust" means a corporation, trust, or association:
19                (i) that is considered a real estate
20            investment trust for the taxable year under
21            Section 856 of the Internal Revenue Code;
22                (ii) the certificates of beneficial interest
23            or shares of which are not regularly traded on an
24            established securities market; and
25                (iii) of which more than 50% of the voting
26            power or value of the beneficial interest or

 

 

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1            shares, at any time during the last half of the
2            taxable year, is owned or controlled, directly,
3            indirectly, or constructively, by a single
4            corporation.
5            (B) The term "captive real estate investment
6        trust" does not include:
7                (i) a real estate investment trust of which
8            more than 50% of the voting power or value of the
9            beneficial interest or shares is owned or
10            controlled, directly, indirectly, or
11            constructively, by:
12                    (a) a real estate investment trust, other
13                than a captive real estate investment trust;
14                    (b) a person who is exempt from taxation
15                under Section 501 of the Internal Revenue Code,
16                and who is not required to treat income
17                received from the real estate investment trust
18                as unrelated business taxable income under
19                Section 512 of the Internal Revenue Code;
20                    (c) a listed Australian property trust, if
21                no more than 50% of the voting power or value
22                of the beneficial interest or shares of that
23                trust, at any time during the last half of the
24                taxable year, is owned or controlled, directly
25                or indirectly, by a single person;
26                    (d) an entity organized as a trust,

 

 

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1                provided a listed Australian property trust
2                described in subparagraph (c) owns or
3                controls, directly or indirectly, or
4                constructively, 75% or more of the voting power
5                or value of the beneficial interests or shares
6                of such entity; or
7                    (e) an entity that is organized outside of
8                the laws of the United States and that
9                satisfies all of the following criteria:
10                        (1) at least 75% of the entity's total
11                    asset value at the close of its taxable
12                    year is represented by real estate assets
13                    (as defined in Section 856(c)(5)(B) of the
14                    Internal Revenue Code, thereby including
15                    shares or certificates of beneficial
16                    interest in any real estate investment
17                    trust), cash and cash equivalents, and
18                    U.S. Government securities;
19                        (2) the entity is not subject to tax on
20                    amounts that are distributed to its
21                    beneficial owners or is exempt from
22                    entity-level taxation;
23                        (3) the entity distributes at least
24                    85% of its taxable income (as computed in
25                    the jurisdiction in which it is organized)
26                    to the holders of its shares or

 

 

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1                    certificates of beneficial interest on an
2                    annual basis;
3                        (4) either (i) the shares or
4                    beneficial interests of the entity are
5                    regularly traded on an established
6                    securities market or (ii) not more than 10%
7                    of the voting power or value in the entity
8                    is held, directly, indirectly, or
9                    constructively, by a single entity or
10                    individual; and
11                        (5) the entity is organized in a
12                    country that has entered into a tax treaty
13                    with the United States; or
14                (ii) during its first taxable year for which it
15            elects to be treated as a real estate investment
16            trust under Section 856(c)(1) of the Internal
17            Revenue Code, a real estate investment trust the
18            certificates of beneficial interest or shares of
19            which are not regularly traded on an established
20            securities market, but only if the certificates of
21            beneficial interest or shares of the real estate
22            investment trust are regularly traded on an
23            established securities market prior to the earlier
24            of the due date (including extensions) for filing
25            its return under this Act for that first taxable
26            year or the date it actually files that return.

 

 

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1            (C) For the purposes of this subsection (1.5), the
2        constructive ownership rules prescribed under Section
3        318(a) of the Internal Revenue Code, as modified by
4        Section 856(d)(5) of the Internal Revenue Code, apply
5        in determining the ownership of stock, assets, or net
6        profits of any person.
7            (D) For the purposes of this item (1.5), for
8        taxable years ending on or after August 16, 2007, the
9        voting power or value of the beneficial interest or
10        shares of a real estate investment trust does not
11        include any voting power or value of beneficial
12        interest or shares in a real estate investment trust
13        held directly or indirectly in a segregated asset
14        account by a life insurance company (as described in
15        Section 817 of the Internal Revenue Code) to the extent
16        such voting power or value is for the benefit of
17        entities or persons who are either immune from taxation
18        or exempt from taxation under subtitle A of the
19        Internal Revenue Code.
20        (2) Commercial domicile. The term "commercial
21    domicile" means the principal place from which the trade or
22    business of the taxpayer is directed or managed.
23        (3) Compensation. The term "compensation" means wages,
24    salaries, commissions and any other form of remuneration
25    paid to employees for personal services.
26        (4) Corporation. The term "corporation" includes

 

 

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1    associations, joint-stock companies, insurance companies
2    and cooperatives. Any entity, including a limited
3    liability company formed under the Illinois Limited
4    Liability Company Act, shall be treated as a corporation if
5    it is so classified for federal income tax purposes.
6        (5) Department. The term "Department" means the
7    Department of Revenue of this State.
8        (6) Director. The term "Director" means the Director of
9    Revenue of this State.
10        (7) Fiduciary. The term "fiduciary" means a guardian,
11    trustee, executor, administrator, receiver, or any person
12    acting in any fiduciary capacity for any person.
13        (8) Financial organization.
14            (A) The term "financial organization" means any
15        bank, bank holding company, trust company, savings
16        bank, industrial bank, land bank, safe deposit
17        company, private banker, savings and loan association,
18        building and loan association, credit union, currency
19        exchange, cooperative bank, small loan company, sales
20        finance company, investment company, or any person
21        which is owned by a bank or bank holding company. For
22        the purpose of this Section a "person" will include
23        only those persons which a bank holding company may
24        acquire and hold an interest in, directly or
25        indirectly, under the provisions of the Bank Holding
26        Company Act of 1956 (12 U.S.C. 1841, et seq.), except

 

 

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1        where interests in any person must be disposed of
2        within certain required time limits under the Bank
3        Holding Company Act of 1956.
4            (B) For purposes of subparagraph (A) of this
5        paragraph, the term "bank" includes (i) any entity that
6        is regulated by the Comptroller of the Currency under
7        the National Bank Act, or by the Federal Reserve Board,
8        or by the Federal Deposit Insurance Corporation and
9        (ii) any federally or State chartered bank operating as
10        a credit card bank.
11            (C) For purposes of subparagraph (A) of this
12        paragraph, the term "sales finance company" has the
13        meaning provided in the following item (i) or (ii):
14                (i) A person primarily engaged in one or more
15            of the following businesses: the business of
16            purchasing customer receivables, the business of
17            making loans upon the security of customer
18            receivables, the business of making loans for the
19            express purpose of funding purchases of tangible
20            personal property or services by the borrower, or
21            the business of finance leasing. For purposes of
22            this item (i), "customer receivable" means:
23                    (a) a retail installment contract or
24                retail charge agreement within the meaning of
25                the Sales Finance Agency Act, the Retail
26                Installment Sales Act, or the Motor Vehicle

 

 

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1                Retail Installment Sales Act;
2                    (b) an installment, charge, credit, or
3                similar contract or agreement arising from the
4                sale of tangible personal property or services
5                in a transaction involving a deferred payment
6                price payable in one or more installments
7                subsequent to the sale; or
8                    (c) the outstanding balance of a contract
9                or agreement described in provisions (a) or (b)
10                of this item (i).
11                A customer receivable need not provide for
12            payment of interest on deferred payments. A sales
13            finance company may purchase a customer receivable
14            from, or make a loan secured by a customer
15            receivable to, the seller in the original
16            transaction or to a person who purchased the
17            customer receivable directly or indirectly from
18            that seller.
19                (ii) A corporation meeting each of the
20            following criteria:
21                    (a) the corporation must be a member of an
22                "affiliated group" within the meaning of
23                Section 1504(a) of the Internal Revenue Code,
24                determined without regard to Section 1504(b)
25                of the Internal Revenue Code;
26                    (b) more than 50% of the gross income of

 

 

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1                the corporation for the taxable year must be
2                interest income derived from qualifying loans.
3                A "qualifying loan" is a loan made to a member
4                of the corporation's affiliated group that
5                originates customer receivables (within the
6                meaning of item (i)) or to whom customer
7                receivables originated by a member of the
8                affiliated group have been transferred, to the
9                extent the average outstanding balance of
10                loans from that corporation to members of its
11                affiliated group during the taxable year do not
12                exceed the limitation amount for that
13                corporation. The "limitation amount" for a
14                corporation is the average outstanding
15                balances during the taxable year of customer
16                receivables (within the meaning of item (i))
17                originated by all members of the affiliated
18                group. If the average outstanding balances of
19                the loans made by a corporation to members of
20                its affiliated group exceed the limitation
21                amount, the interest income of that
22                corporation from qualifying loans shall be
23                equal to its interest income from loans to
24                members of its affiliated groups times a
25                fraction equal to the limitation amount
26                divided by the average outstanding balances of

 

 

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1                the loans made by that corporation to members
2                of its affiliated group;
3                    (c) the total of all shareholder's equity
4                (including, without limitation, paid-in
5                capital on common and preferred stock and
6                retained earnings) of the corporation plus the
7                total of all of its loans, advances, and other
8                obligations payable or owed to members of its
9                affiliated group may not exceed 20% of the
10                total assets of the corporation at any time
11                during the tax year; and
12                    (d) more than 50% of all interest-bearing
13                obligations of the affiliated group payable to
14                persons outside the group determined in
15                accordance with generally accepted accounting
16                principles must be obligations of the
17                corporation.
18            This amendatory Act of the 91st General Assembly is
19        declaratory of existing law.
20            (D) Subparagraphs (B) and (C) of this paragraph are
21        declaratory of existing law and apply retroactively,
22        for all tax years beginning on or before December 31,
23        1996, to all original returns, to all amended returns
24        filed no later than 30 days after the effective date of
25        this amendatory Act of 1996, and to all notices issued
26        on or before the effective date of this amendatory Act

 

 

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1        of 1996 under subsection (a) of Section 903, subsection
2        (a) of Section 904, subsection (e) of Section 909, or
3        Section 912. A taxpayer that is a "financial
4        organization" that engages in any transaction with an
5        affiliate shall be a "financial organization" for all
6        purposes of this Act.
7            (E) For all tax years beginning on or before
8        December 31, 1996, a taxpayer that falls within the
9        definition of a "financial organization" under
10        subparagraphs (B) or (C) of this paragraph, but who
11        does not fall within the definition of a "financial
12        organization" under the Proposed Regulations issued by
13        the Department of Revenue on July 19, 1996, may
14        irrevocably elect to apply the Proposed Regulations
15        for all of those years as though the Proposed
16        Regulations had been lawfully promulgated, adopted,
17        and in effect for all of those years. For purposes of
18        applying subparagraphs (B) or (C) of this paragraph to
19        all of those years, the election allowed by this
20        subparagraph applies only to the taxpayer making the
21        election and to those members of the taxpayer's unitary
22        business group who are ordinarily required to
23        apportion business income under the same subsection of
24        Section 304 of this Act as the taxpayer making the
25        election. No election allowed by this subparagraph
26        shall be made under a claim filed under subsection (d)

 

 

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1        of Section 909 more than 30 days after the effective
2        date of this amendatory Act of 1996.
3            (F) Finance Leases. For purposes of this
4        subsection, a finance lease shall be treated as a loan
5        or other extension of credit, rather than as a lease,
6        regardless of how the transaction is characterized for
7        any other purpose, including the purposes of any
8        regulatory agency to which the lessor is subject. A
9        finance lease is any transaction in the form of a lease
10        in which the lessee is treated as the owner of the
11        leased asset entitled to any deduction for
12        depreciation allowed under Section 167 of the Internal
13        Revenue Code.
14        (9) Fiscal year. The term "fiscal year" means an
15    accounting period of 12 months ending on the last day of
16    any month other than December.
17        (9.5) Fixed place of business. The term "fixed place of
18    business" has the same meaning as that term is given in
19    Section 864 of the Internal Revenue Code and the related
20    Treasury regulations.
21        (10) Includes and including. The terms "includes" and
22    "including" when used in a definition contained in this Act
23    shall not be deemed to exclude other things otherwise
24    within the meaning of the term defined.
25        (11) Internal Revenue Code. The term "Internal Revenue
26    Code" means the United States Internal Revenue Code of 1954

 

 

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1    or any successor law or laws relating to federal income
2    taxes in effect for the taxable year.
3        (11.5) Investment partnership.
4            (A) The term "investment partnership" means any
5        entity that is treated as a partnership for federal
6        income tax purposes that meets the following
7        requirements:
8                (i) no less than 90% of the partnership's cost
9            of its total assets consists of qualifying
10            investment securities, deposits at banks or other
11            financial institutions, and office space and
12            equipment reasonably necessary to carry on its
13            activities as an investment partnership;
14                (ii) no less than 90% of its gross income
15            consists of interest, dividends, and gains from
16            the sale or exchange of qualifying investment
17            securities; and
18                (iii) the partnership is not a dealer in
19            qualifying investment securities.
20            (B) For purposes of this paragraph (11.5), the term
21        "qualifying investment securities" includes all of the
22        following:
23                (i) common stock, including preferred or debt
24            securities convertible into common stock, and
25            preferred stock;
26                (ii) bonds, debentures, and other debt

 

 

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1            securities;
2                (iii) foreign and domestic currency deposits
3            secured by federal, state, or local governmental
4            agencies;
5                (iv) mortgage or asset-backed securities
6            secured by federal, state, or local governmental
7            agencies;
8                (v) repurchase agreements and loan
9            participations;
10                (vi) foreign currency exchange contracts and
11            forward and futures contracts on foreign
12            currencies;
13                (vii) stock and bond index securities and
14            futures contracts and other similar financial
15            securities and futures contracts on those
16            securities;
17                (viii) options for the purchase or sale of any
18            of the securities, currencies, contracts, or
19            financial instruments described in items (i) to
20            (vii), inclusive;
21                (ix) regulated futures contracts;
22                (x) commodities (not described in Section
23            1221(a)(1) of the Internal Revenue Code) or
24            futures, forwards, and options with respect to
25            such commodities, provided, however, that any item
26            of a physical commodity to which title is actually

 

 

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1            acquired in the partnership's capacity as a dealer
2            in such commodity shall not be a qualifying
3            investment security;
4                (xi) derivatives; and
5                (xii) a partnership interest in another
6            partnership that is an investment partnership.
7        (12) Mathematical error. The term "mathematical error"
8    includes the following types of errors, omissions, or
9    defects in a return filed by a taxpayer which prevents
10    acceptance of the return as filed for processing:
11            (A) arithmetic errors or incorrect computations on
12        the return or supporting schedules;
13            (B) entries on the wrong lines;
14            (C) omission of required supporting forms or
15        schedules or the omission of the information in whole
16        or in part called for thereon; and
17            (D) an attempt to claim, exclude, deduct, or
18        improperly report, in a manner directly contrary to the
19        provisions of the Act and regulations thereunder any
20        item of income, exemption, deduction, or credit.
21        (13) Nonbusiness income. The term "nonbusiness income"
22    means all income other than business income or
23    compensation.
24        (14) Nonresident. The term "nonresident" means a
25    person who is not a resident.
26        (15) Paid, incurred and accrued. The terms "paid",

 

 

HB4300- 205 -LRB099 14379 HLH 38474 b

1    "incurred" and "accrued" shall be construed according to
2    the method of accounting upon the basis of which the
3    person's base income is computed under this Act.
4        (16) Partnership and partner. The term "partnership"
5    includes a syndicate, group, pool, joint venture or other
6    unincorporated organization, through or by means of which
7    any business, financial operation, or venture is carried
8    on, and which is not, within the meaning of this Act, a
9    trust or estate or a corporation; and the term "partner"
10    includes a member in such syndicate, group, pool, joint
11    venture or organization.
12        The term "partnership" includes any entity, including
13    a limited liability company formed under the Illinois
14    Limited Liability Company Act, classified as a partnership
15    for federal income tax purposes.
16        The term "partnership" does not include a syndicate,
17    group, pool, joint venture, or other unincorporated
18    organization established for the sole purpose of playing
19    the Illinois State Lottery.
20        (17) Part-year resident. The term "part-year resident"
21    means an individual who became a resident during the
22    taxable year or ceased to be a resident during the taxable
23    year. Under Section 1501(a)(20)(A)(i) residence commences
24    with presence in this State for other than a temporary or
25    transitory purpose and ceases with absence from this State
26    for other than a temporary or transitory purpose. Under

 

 

HB4300- 206 -LRB099 14379 HLH 38474 b

1    Section 1501(a)(20)(A)(ii) residence commences with the
2    establishment of domicile in this State and ceases with the
3    establishment of domicile in another State.
4        (18) Person. The term "person" shall be construed to
5    mean and include an individual, a trust, estate,
6    partnership, association, firm, company, corporation,
7    limited liability company, or fiduciary. For purposes of
8    Section 1301 and 1302 of this Act, a "person" means (i) an
9    individual, (ii) a corporation, (iii) an officer, agent, or
10    employee of a corporation, (iv) a member, agent or employee
11    of a partnership, or (v) a member, manager, employee,
12    officer, director, or agent of a limited liability company
13    who in such capacity commits an offense specified in
14    Section 1301 and 1302.
15        (18A) Records. The term "records" includes all data
16    maintained by the taxpayer, whether on paper, microfilm,
17    microfiche, or any type of machine-sensible data
18    compilation.
19        (19) Regulations. The term "regulations" includes
20    rules promulgated and forms prescribed by the Department.
21        (20) Resident. The term "resident" means:
22            (A) an individual (i) who is in this State for
23        other than a temporary or transitory purpose during the
24        taxable year; or (ii) who is domiciled in this State
25        but is absent from the State for a temporary or
26        transitory purpose during the taxable year;

 

 

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1            (B) The estate of a decedent who at his or her
2        death was domiciled in this State;
3            (C) A trust created by a will of a decedent who at
4        his death was domiciled in this State; and
5            (D) An irrevocable trust, the grantor of which was
6        domiciled in this State at the time such trust became
7        irrevocable. For purpose of this subparagraph, a trust
8        shall be considered irrevocable to the extent that the
9        grantor is not treated as the owner thereof under
10        Sections 671 through 678 of the Internal Revenue Code.
11        (21) Sales. The term "sales" means all gross receipts
12    of the taxpayer not allocated under Sections 301, 302 and
13    303.
14        (22) State. The term "state" when applied to a
15    jurisdiction other than this State means any state of the
16    United States, the District of Columbia, the Commonwealth
17    of Puerto Rico, any Territory or Possession of the United
18    States, and any foreign country, or any political
19    subdivision of any of the foregoing. For purposes of the
20    foreign tax credit under Section 601, the term "state"
21    means any state of the United States, the District of
22    Columbia, the Commonwealth of Puerto Rico, and any
23    territory or possession of the United States, or any
24    political subdivision of any of the foregoing, effective
25    for tax years ending on or after December 31, 1989.
26        (23) Taxable year. The term "taxable year" means the

 

 

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1    calendar year, or the fiscal year ending during such
2    calendar year, upon the basis of which the base income is
3    computed under this Act. "Taxable year" means, in the case
4    of a return made for a fractional part of a year under the
5    provisions of this Act, the period for which such return is
6    made.
7        (24) Taxpayer. The term "taxpayer" means any person
8    subject to the tax imposed by this Act.
9        (25) International banking facility. The term
10    international banking facility shall have the same meaning
11    as is set forth in the Illinois Banking Act or as is set
12    forth in the laws of the United States or regulations of
13    the Board of Governors of the Federal Reserve System.
14        (26) Income Tax Return Preparer.
15            (A) The term "income tax return preparer" means any
16        person who prepares for compensation, or who employs
17        one or more persons to prepare for compensation, any
18        return of tax imposed by this Act or any claim for
19        refund of tax imposed by this Act. The preparation of a
20        substantial portion of a return or claim for refund
21        shall be treated as the preparation of that return or
22        claim for refund.
23            (B) A person is not an income tax return preparer
24        if all he or she does is
25                (i) furnish typing, reproducing, or other
26            mechanical assistance;

 

 

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1                (ii) prepare returns or claims for refunds for
2            the employer by whom he or she is regularly and
3            continuously employed;
4                (iii) prepare as a fiduciary returns or claims
5            for refunds for any person; or
6                (iv) prepare claims for refunds for a taxpayer
7            in response to any notice of deficiency issued to
8            that taxpayer or in response to any waiver of
9            restriction after the commencement of an audit of
10            that taxpayer or of another taxpayer if a
11            determination in the audit of the other taxpayer
12            directly or indirectly affects the tax liability
13            of the taxpayer whose claims he or she is
14            preparing.
15        (27) Unitary business group.
16            (A) The term "unitary business group" means a group
17        of persons related through common ownership whose
18        business activities are integrated with, dependent
19        upon and contribute to each other. The group will not
20        include those members whose business activity outside
21        the United States is 80% or more of any such member's
22        total business activity; for purposes of this
23        paragraph and clause (a)(3)(B)(ii) of Section 304,
24        business activity within the United States shall be
25        measured by means of the factors ordinarily applicable
26        under subsections (a), (b), (c), (d), or (h) of Section

 

 

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1        304 except that, in the case of members ordinarily
2        required to apportion business income by means of the 3
3        factor formula of property, payroll and sales
4        specified in subsection (a) of Section 304, including
5        the formula as weighted in subsection (h) of Section
6        304, such members shall not use the sales factor in the
7        computation and the results of the property and payroll
8        factor computations of subsection (a) of Section 304
9        shall be divided by 2 (by one if either the property or
10        payroll factor has a denominator of zero). The
11        computation required by the preceding sentence shall,
12        in each case, involve the division of the member's
13        property, payroll, or revenue miles in the United
14        States, insurance premiums on property or risk in the
15        United States, or financial organization business
16        income from sources within the United States, as the
17        case may be, by the respective worldwide figures for
18        such items. Common ownership in the case of
19        corporations is the direct or indirect control or
20        ownership of more than 50% of the outstanding voting
21        stock of the persons carrying on unitary business
22        activity. Unitary business activity can ordinarily be
23        illustrated where the activities of the members are:
24        (1) in the same general line (such as manufacturing,
25        wholesaling, retailing of tangible personal property,
26        insurance, transportation or finance); or (2) are

 

 

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1        steps in a vertically structured enterprise or process
2        (such as the steps involved in the production of
3        natural resources, which might include exploration,
4        mining, refining, and marketing); and, in either
5        instance, the members are functionally integrated
6        through the exercise of strong centralized management
7        (where, for example, authority over such matters as
8        purchasing, financing, tax compliance, product line,
9        personnel, marketing and capital investment is not
10        left to each member).
11            (B) In no event, for taxable years ending prior to
12        December 31, 2015, shall any unitary business group
13        include members which are ordinarily required to
14        apportion business income under different subsections
15        of Section 304 except that for tax years ending on or
16        after December 31, 1987 this prohibition shall not
17        apply to a holding company that would otherwise be a
18        member of a unitary business group with taxpayers that
19        apportion business income under any of subsections
20        (b), (c), (c-1), or (d) of Section 304. If a unitary
21        business group would, but for the preceding sentence,
22        include members that are ordinarily required to
23        apportion business income under different subsections
24        of Section 304, then for each subsection of Section 304
25        for which there are two or more members, there shall be
26        a separate unitary business group composed of such

 

 

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1        members. For purposes of the preceding two sentences, a
2        member is "ordinarily required to apportion business
3        income" under a particular subsection of Section 304 if
4        it would be required to use the apportionment method
5        prescribed by such subsection except for the fact that
6        it derives business income solely from Illinois. As
7        used in this paragraph, the phrase "United States"
8        means only the 50 states and the District of Columbia,
9        but does not include any territory or possession of the
10        United States or any area over which the United States
11        has asserted jurisdiction or claimed exclusive rights
12        with respect to the exploration for or exploitation of
13        natural resources.
14            (C) Holding companies.
15                (i) For purposes of this subparagraph, a
16            "holding company" is a corporation (other than a
17            corporation that is a financial organization under
18            paragraph (8) of this subsection (a) of Section
19            1501 because it is a bank holding company under the
20            provisions of the Bank Holding Company Act of 1956
21            (12 U.S.C. 1841, et seq.) or because it is owned by
22            a bank or a bank holding company) that owns a
23            controlling interest in one or more other
24            taxpayers ("controlled taxpayers"); that, during
25            the period that includes the taxable year and the 2
26            immediately preceding taxable years or, if the

 

 

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1            corporation was formed during the current or
2            immediately preceding taxable year, the taxable
3            years in which the corporation has been in
4            existence, derived substantially all its gross
5            income from dividends, interest, rents, royalties,
6            fees or other charges received from controlled
7            taxpayers for the provision of services, and gains
8            on the sale or other disposition of interests in
9            controlled taxpayers or in property leased or
10            licensed to controlled taxpayers or used by the
11            taxpayer in providing services to controlled
12            taxpayers; and that incurs no substantial expenses
13            other than expenses (including interest and other
14            costs of borrowing) incurred in connection with
15            the acquisition and holding of interests in
16            controlled taxpayers and in the provision of
17            services to controlled taxpayers or in the leasing
18            or licensing of property to controlled taxpayers.
19                (ii) The income of a holding company which is a
20            member of more than one unitary business group
21            shall be included in each unitary business group of
22            which it is a member on a pro rata basis, by
23            including in each unitary business group that
24            portion of the base income of the holding company
25            that bears the same proportion to the total base
26            income of the holding company as the gross receipts

 

 

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1            of the unitary business group bears to the combined
2            gross receipts of all unitary business groups (in
3            both cases without regard to the holding company)
4            or on any other reasonable basis, consistently
5            applied.
6                (iii) A holding company shall apportion its
7            business income under the subsection of Section
8            304 used by the other members of its unitary
9            business group. The apportionment factors of a
10            holding company which would be a member of more
11            than one unitary business group shall be included
12            with the apportionment factors of each unitary
13            business group of which it is a member on a pro
14            rata basis using the same method used in clause
15            (ii).
16                (iv) The provisions of this subparagraph (C)
17            are intended to clarify existing law.
18            (D) If including the base income and factors of a
19        holding company in more than one unitary business group
20        under subparagraph (C) does not fairly reflect the
21        degree of integration between the holding company and
22        one or more of the unitary business groups, the
23        dependence of the holding company and one or more of
24        the unitary business groups upon each other, or the
25        contributions between the holding company and one or
26        more of the unitary business groups, the holding

 

 

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1        company may petition the Director, under the
2        procedures provided under Section 304(f), for
3        permission to include all base income and factors of
4        the holding company only with members of a unitary
5        business group apportioning their business income
6        under one subsection of subsections (a), (b), (c), or
7        (d) of Section 304. If the petition is granted, the
8        holding company shall be included in a unitary business
9        group only with persons apportioning their business
10        income under the selected subsection of Section 304
11        until the Director grants a petition of the holding
12        company either to be included in more than one unitary
13        business group under subparagraph (C) or to include its
14        base income and factors only with members of a unitary
15        business group apportioning their business income
16        under a different subsection of Section 304.
17            (E) If the unitary business group members'
18        accounting periods differ, the common parent's
19        accounting period or, if there is no common parent, the
20        accounting period of the member that is expected to
21        have, on a recurring basis, the greatest Illinois
22        income tax liability must be used to determine whether
23        to use the apportionment method provided in subsection
24        (a) or subsection (h) of Section 304. The prohibition
25        against membership in a unitary business group for
26        taxpayers ordinarily required to apportion income

 

 

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1        under different subsections of Section 304 does not
2        apply to taxpayers required to apportion income under
3        subsection (a) and subsection (h) of Section 304. The
4        provisions of this amendatory Act of 1998 apply to tax
5        years ending on or after December 31, 1998.
6        (28) Subchapter S corporation. The term "Subchapter S
7    corporation" means a corporation for which there is in
8    effect an election under Section 1362 of the Internal
9    Revenue Code, or for which there is a federal election to
10    opt out of the provisions of the Subchapter S Revision Act
11    of 1982 and have applied instead the prior federal
12    Subchapter S rules as in effect on July 1, 1982.
13        (30) Foreign person. The term "foreign person" means
14    any person who is a nonresident alien individual and any
15    nonindividual entity, regardless of where created or
16    organized, whose business activity outside the United
17    States is 80% or more of the entity's total business
18    activity.
 
19    (b) Other definitions.
20        (1) Words denoting number, gender, and so forth, when
21    used in this Act, where not otherwise distinctly expressed
22    or manifestly incompatible with the intent thereof:
23            (A) Words importing the singular include and apply
24        to several persons, parties or things;
25            (B) Words importing the plural include the

 

 

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1        singular; and
2            (C) Words importing the masculine gender include
3        the feminine as well.
4        (2) "Company" or "association" as including successors
5    and assigns. The word "company" or "association", when used
6    in reference to a corporation, shall be deemed to embrace
7    the words "successors and assigns of such company or
8    association", and in like manner as if these last-named
9    words, or words of similar import, were expressed.
10        (3) Other terms. Any term used in any Section of this
11    Act with respect to the application of, or in connection
12    with, the provisions of any other Section of this Act shall
13    have the same meaning as in such other Section.
14(Source: P.A. 99-213, eff. 7-31-15.)
 
15    Section 15-15. The Property Tax Code is amended by changing
16Sections 3-40 and 4-20 as follows:
 
17    (35 ILCS 200/3-40)
18    Sec. 3-40. Compensation of supervisors of assessments.
19    (a) A supervisor of assessments shall receive annual
20compensation in an amount fixed by the county board subject to
21the following minimum amounts:
22        In counties with less than 14,000 inhabitants, not less
23    than $7,500;
24        In counties with 14,000 or more but less than 30,000

 

 

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1    inhabitants, not less than $8,000;
2        In counties with 30,000 or more but less than 60,000
3    inhabitants, not less than $9,000;
4        In counties with 60,000 or more but less than 100,000
5    inhabitants, not less than $10,000;
6        In counties with 100,000 or more but less than 200,000
7    inhabitants, not less than $11,500;
8        In counties with 200,000 or more but less than 300,000
9    inhabitants, not less than $13,000;
10        In counties with 300,000 or more but less than
11    1,000,000 inhabitants, not less than $15,000.
12For purposes of this subsection, the number of inhabitants
13shall be determined by the latest Federal decennial or special
14census of the county.
15    (b) Elected supervisors of assessments who began a term of
16office before December 1, 1990 shall be compensated at the rate
17of their base salary. "Base salary" is the compensation paid
18for their position before July 1, 1989.
19    (c) Elected supervisors of assessments beginning a term of
20office on or after December 1, 1990 shall, beginning December
211, 1993, receive their base salary plus at least 12% of base
22salary.
23    Any supervisor of assessments who has been presented a
24Certified Assessing Evaluator Certificate by the International
25Association of Assessing Officers shall receive an additional
26compensation of $500 per year to be paid out of funds

 

 

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1appropriated to the Department from the Personal Property Tax
2Replacement Fund. No additional compensation shall be paid to
3supervisors of assessments whose terms of office begin on or
4after the effective date of this amendatory Act of the 99th
5General Assembly.
6    The salary set by the county board shall be paid in equal
7monthly installments out of the treasury of the county in which
8he or she is appointed or elected. If the Department has
9determined that the total assessed value of property in a
10county, as equalized by the supervisor of assessments under
11Section 9-210, is between 31 1/3% and 35 1/3% of the total fair
12cash value of property in the county, subject to appropriation,
13the Department shall reimburse the county monthly from the
14Personal Property Tax Replacement Fund 50% of the amount of
15salary the county paid to the officer for the preceding month.
16    The county board shall provide necessary office space for
17the officer and pay all necessary expenses of the office out of
18the county treasury.
19    Each supervisor of assessments may, with the advice and
20consent of the county board, appoint necessary deputies and
21clerks, their compensation to be fixed by the county board and
22paid by the county.
23(Source: P.A. 97-72, eff. 7-1-11.)
 
24    (35 ILCS 200/4-20)
25    Sec. 4-20. Additional compensation based on performance.

 

 

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1Any assessor in counties with less than 3,000,000 but more than
250,000 inhabitants each year may petition the Department to
3receive additional compensation based on performance. To
4receive additional compensation, the official's assessment
5jurisdiction must meet the following criteria:
6        (1) the median level of assessment must be no more than
7    35 1/3% and no less than 31 1/3% of fair cash value of
8    property in his or her assessment jurisdiction; and
9        (2) the coefficient of dispersion must not be greater
10    than 15%.
11For purposes of this Section, "coefficient of dispersion" means
12the average deviation of all assessments from the median level.
13For purposes of this Section, the number of inhabitants shall
14be determined by the latest federal decennial census. When the
15most recent census shows an increase in inhabitants to over
1650,000 or a decrease to 50,000 or fewer, then the assessment
17year used to compute the coefficient of dispersion and the most
18recent year of the 3-year average level of assessments is the
19year that determines qualification for additional
20compensation. The Department will promulgate rules and
21regulations to determine whether an assessor meets these
22criteria.
23    Any assessor in a county of 50,000 or fewer inhabitants may
24petition the Department for consideration to receive
25additional compensation each year based on performance. In
26order to receive the additional compensation, the assessments

 

 

HB4300- 221 -LRB099 14379 HLH 38474 b

1in the official's assessment jurisdiction must meet the
2following criteria: (i) the median level of assessments must be
3no more than 35 1/3% and no less than 31 1/3% of fair cash value
4of property in his or her assessment jurisdiction; and (ii) the
5coefficient of dispersion must not be greater than 40% in 1994,
638% in 1995, 36% in 1996, 34% in 1997, 32% in 1998, and 30% in
71999 and every year thereafter.
8    Real estate transfer declarations used by the Department in
9annual sales-assessment ratio studies will be used to evaluate
10applications for additional compensation. The Department will
11audit other property to determine if the sales-assessment ratio
12study data is representative of the assessment jurisdiction. If
13the ratio study is found not representative, appraisals and
14other information may be utilized. If the ratio study is
15representative, upon certification by the Department, the
16assessor shall receive additional compensation of $3,000 for
17that year, to be paid out of funds appropriated to the
18Department from the Personal Property Tax Replacement Fund.
19    No additional compensation shall be paid to assessors whose
20terms of office begin on or after the effective date of this
21amendatory Act of the 99th General Assembly.
22    As used in this Section, "assessor" means any township or
23multi-township assessor, or supervisor of assessments.
24(Source: P.A. 97-72, eff. 7-1-11.)
 
25    Section 15-20. The Tax Delinquency Amnesty Act is amended

 

 

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1by changing Section 10 as follows:
 
2    (35 ILCS 745/10)
3    Sec. 10. Amnesty program. The Department shall establish an
4amnesty program for all taxpayers owing any tax imposed by
5reason of or pursuant to authorization by any law of the State
6of Illinois and collected by the Department.
7    The amnesty program shall be for a period from October 1,
82003 through November 15, 2003, and for a period beginning on
9October 1, 2010 and ending November 8, 2010, and for a period
10beginning on October 1, 2016 and ending November 8, 2016.
11    The amnesty program shall provide that, upon payment by a
12taxpayer of all taxes due from that taxpayer to the State of
13Illinois for any taxable period ending (i) after June 30, 1983
14and prior to July 1, 2002 for the tax amnesty period occurring
15from October 1, 2003 through November 15, 2003, and (ii) after
16June 30, 2002 and prior to July 1, 2009 for the tax amnesty
17period beginning on October 1, 2010 through November 8, 2010,
18and (iii) after June 30, 2008 and prior to July 1, 2015 for the
19tax amnesty period beginning on October 1, 2016 through
20November 8, 2016, the Department shall abate and not seek to
21collect any interest or penalties that may be applicable and
22the Department shall not seek civil or criminal prosecution for
23any taxpayer for the period of time for which amnesty has been
24granted to the taxpayer. Failure to pay all taxes due to the
25State for a taxable period shall invalidate any amnesty granted

 

 

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1under this Act. Amnesty shall be granted only if all amnesty
2conditions are satisfied by the taxpayer.
3    Amnesty shall not be granted to taxpayers who are a party
4to any criminal investigation or to any civil or criminal
5litigation that is pending in any circuit court or appellate
6court or the Supreme Court of this State for nonpayment,
7delinquency, or fraud in relation to any State tax imposed by
8any law of the State of Illinois.
9    Participation in an amnesty program shall not preclude a
10taxpayer from claiming a refund for an overpayment of tax on an
11issue unrelated to the issues for which the taxpayer claimed
12amnesty or for an overpayment of tax by taxpayers estimating a
13non-final liability for the amnesty program pursuant to Section
14506(b) of the Illinois Income Tax Act (35 ILCS 5/506(b)).
15    Voluntary payments made under this Act shall be made by
16cash, check, guaranteed remittance, or ACH debit.
17    The Department shall adopt rules as necessary to implement
18the provisions of this Act.
19    Except as otherwise provided in this Section, all money
20collected under this Act that would otherwise be deposited into
21the General Revenue Fund shall be deposited as follows: (i)
22one-half into the Common School Fund; (ii) one-half into the
23General Revenue Fund. Two percent of all money collected under
24this Act shall be deposited by the State Treasurer into the Tax
25Compliance and Administration Fund and, subject to
26appropriation, shall be used by the Department to cover costs

 

 

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1associated with the administration of this Act.
2(Source: P.A. 96-1435, eff. 8-16-10.)
 
3    Section 15-25. The Counties Code is amended by changing
4Sections 3-10007, 4-6001, 4-6002, 4-6003, and 4-8002 as
5follows:
 
6    (55 ILCS 5/3-10007)  (from Ch. 34, par. 3-10007)
7    Sec. 3-10007. Annual stipend. In addition to all other
8compensation provided by law, every elected county treasurer,
9for additional duties mandated by State law, shall receive an
10annual stipend of (i) $5,000 if his or her term begins before
11December 1, 1998, (ii) $5,500 after December 1, 1998 and $6,500
12after December 1, 1999 if his or her term begins on or after
13December 1, 1998 but before December 1, 2000, and (iii) $6,500
14if his or her term begins December 1, 2000 or thereafter, to be
15annually appropriated from the Personal Property Tax
16Replacement Fund by the General Assembly to the Department of
17Revenue which shall distribute the awards in annual lump sum
18payments to every elected county treasurer. This annual stipend
19shall not affect any other compensation provided by law to be
20paid to elected county treasurers. No county board may reduce
21or otherwise impair the compensation payable from county funds
22to an elected county treasurer if such reduction or impairment
23is the result of his receiving an annual stipend under this
24Section. No stipend shall be paid to county treasurers whose

 

 

HB4300- 225 -LRB099 14379 HLH 38474 b

1terms of office begin on or after the effective date of this
2amendatory Act of the 99th General Assembly.
3(Source: P.A. 97-72, eff. 7-1-11.)
 
4    (55 ILCS 5/4-6001)  (from Ch. 34, par. 4-6001)
5    Sec. 4-6001. Officers in counties of less than 2,000,000.
6    (a) In all counties of less than 2,000,000 inhabitants, the
7compensation of Coroners, County Treasurers, County Clerks,
8Recorders and Auditors shall be determined under this Section.
9The County Board in those counties shall fix the amount of the
10necessary clerk hire, stationery, fuel and other expenses of
11those officers. The compensation of those officers shall be
12separate from the necessary clerk hire, stationery, fuel and
13other expenses, and such compensation (except for coroners in
14those counties with less than 2,000,000 population in which the
15coroner's compensation is set in accordance with Section
164-6002) shall be fixed within the following limits:
17    To each such officer in counties containing less than
1814,000 inhabitants, not less than $13,500 per annum.
19    To each such officer in counties containing 14,000 or more
20inhabitants, but less than 30,000 inhabitants, not less than
21$14,500 per annum.
22    To each such officer in counties containing 30,000 or more
23inhabitants but less than 60,000 inhabitants, not less than
24$15,000 per annum.
25    To each such officer in counties containing 60,000 or more

 

 

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1inhabitants but less than 100,000 inhabitants, not less than
2$15,000 per annum.
3    To each such officer in counties containing 100,000 or more
4inhabitants but less than 200,000 inhabitants, not less than
5$16,500 per annum.
6    To each such officer in counties containing 200,000 or more
7inhabitants but less than 300,000 inhabitants, not less than
8$18,000 per annum.
9    To each such officer in counties containing 300,000 or more
10inhabitants but less than 2,000,000 inhabitants, not less than
11$20,000 per annum.
12    (b) Those officers beginning a term of office before
13December 1, 1990 shall be compensated at the rate of their base
14salary. "Base salary" is the compensation paid for each of
15those offices, respectively, before July 1, 1989.
16    (c) Those officers beginning a term of office on or after
17December 1, 1990 shall be compensated as follows:
18        (1) Beginning December 1, 1990, base salary plus at
19    least 3% of base salary.
20        (2) Beginning December 1, 1991, base salary plus at
21    least 6% of base salary.
22        (3) Beginning December 1, 1992, base salary plus at
23    least 9% of base salary.
24        (4) Beginning December 1, 1993, base salary plus at
25    least 12% of base salary.
26    (d) In addition to but separate and apart from the

 

 

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1compensation provided in this Section, the county clerk of each
2county, the recorder of each county, and the chief clerk of
3each county board of election commissioners shall receive an
4award as follows:
5        (1) $4,500 per year after January 1, 1998;
6        (2) $5,500 per year after January 1, 1999; and
7        (3) $6,500 per year after January 1, 2000.
8The total amount required for such awards each year shall be
9appropriated by the General Assembly to the State Board of
10Elections which shall distribute the awards in annual lump sum
11payments to the several county clerks, recorders, and chief
12election clerks. Beginning December 1, 1990, this annual award,
13and any other award or stipend paid out of State funds to
14county officers, shall not affect any other compensation
15provided by law to be paid to county officers. No stipend shall
16be paid to county officers whose terms of office begin on or
17after the effective date of this amendatory Act of the 99th
18General Assembly.
19    (e) Beginning December 1, 1990, no county board may reduce
20or otherwise impair the compensation payable from county funds
21to a county officer if the reduction or impairment is the
22result of the county officer receiving an award or stipend
23payable from State funds.
24    (f) The compensation, necessary clerk hire, stationery,
25fuel and other expenses of the county auditor, as fixed by the
26county board, shall be paid by the county.

 

 

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1    (g) The population of all counties for the purpose of
2fixing compensation, as herein provided, shall be based upon
3the last Federal census immediately previous to the election of
4the officer in question in each county.
5    (h) With respect to an auditor who takes office on or after
6the effective date of this amendatory Act of the 95th General
7Assembly, the auditor shall receive an annual stipend of $6,500
8per year. The General Assembly shall appropriate the total
9amount required for the stipend each year from the Personal
10Property Tax Replacement Fund to the Department of Revenue, and
11the Department of Revenue shall distribute the awards in an
12annual lump sum payment to each county auditor. The stipend
13shall be in addition to, but separate and apart from, the
14compensation provided in this Section. No stipend shall be paid
15to auditors whose terms of office begin on or after the
16effective date of this amendatory Act of the 99th General
17Assembly. No county board may reduce or otherwise impair the
18compensation payable from county funds to the auditor if the
19reduction or impairment is the result of the auditor receiving
20an award or stipend pursuant to this subsection.
21(Source: P.A. 97-72, eff. 7-1-11.)
 
22    (55 ILCS 5/4-6002)  (from Ch. 34, par. 4-6002)
23    Sec. 4-6002. Coroners in counties of less than 2,000,000.
24    (a) The County Board, in all counties of less than
252,000,000 inhabitants, shall fix the compensation of Coroners

 

 

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1within the limitations fixed by this Division, and shall
2appropriate for their necessary clerk hire, stationery, fuel,
3supplies, and other expenses. The compensation of the Coroner
4shall be fixed separately from his necessary clerk hire,
5stationery, fuel and other expenses, and such compensation
6shall be fixed within the following limits:
7    To each Coroner in counties containing less than 5,000
8inhabitants, not less than $4,500 per annum.
9    To each Coroner in counties containing 5,000 or more
10inhabitants but less than 14,000 inhabitants, not less than
11$6,000 per annum.
12    To each Coroner in counties containing 14,000 or more
13inhabitants, but less than 30,000 inhabitants, not less than
14$9,000 per annum.
15    To each Coroner in counties containing 30,000 or more
16inhabitants, but less than 60,000 inhabitants, not less than
17$14,000 per annum.
18    To each Coroner in counties containing 60,000 or more
19inhabitants, but less than 100,000 inhabitants, not less than
20$15,000 per annum.
21    To each Coroner in counties containing 100,000 or more
22inhabitants, but less than 200,000 inhabitants, not less than
23$16,500 per annum.
24    To each Coroner in counties containing 200,000 or more
25inhabitants, but less than 300,000 inhabitants, not less than
26$18,000 per annum.

 

 

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1    To each Coroner in counties containing 300,000 or more
2inhabitants, but less than 2,000,000 inhabitants, not less than
3$20,000 per annum.
4    The population of all counties for the purpose of fixing
5compensation, as herein provided, shall be based upon the last
6Federal census immediately previous to the election of the
7Coroner in question in each county. This Section does not apply
8to a county which has abolished the elective office of coroner.
9    (b) Those coroners beginning a term of office on or after
10December 1, 1990 shall be compensated as follows:
11        (1) Beginning December 1, 1990, base salary plus at
12    least 3% of base salary.
13        (2) Beginning December 1, 1991, base salary plus at
14    least 6% of base salary.
15        (3) Beginning December 1, 1992, base salary plus at
16    least 9% of base salary.
17        (4) Beginning December 1, 1993, base salary plus at
18    least 12% of base salary.
19    "Base salary", as used in this subsection (b), means the
20salary in effect before July 1, 1989.
21    (c) In addition to, but separate and apart from, the
22compensation provided in this Section, subject to
23appropriation, the coroner of each county shall receive an
24annual stipend of $6,500 to be paid by the Illinois Department
25of Revenue out of the Personal Property Tax Replacement Fund if
26his or her term begins on or after December 1, 2000. No stipend

 

 

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1shall be paid to coroners whose terms of office begin on or
2after the effective date of this amendatory Act of the 99th
3General Assembly.
4(Source: P.A. 97-72, eff. 7-1-11.)
 
5    (55 ILCS 5/4-6003)  (from Ch. 34, par. 4-6003)
6    Sec. 4-6003. Compensation of sheriffs for certain expenses
7in counties of less than 2,000,000.
8    (a) The County Board, in all counties of less than
92,000,000 inhabitants, shall fix the compensation of sheriffs,
10with the amount of their necessary clerk hire, stationery, fuel
11and other expenses. The county shall supply the sheriff with
12all necessary uniforms, guns and ammunition. The compensation
13of each such officer shall be fixed separately from his
14necessary clerk hire, stationery, fuel and other expenses.
15Beginning immediately, no county with a population under
162,000,000 may reduce the rate of compensation of its sheriff
17below the rate of compensation that it was actually paying to
18its sheriff on January 1, 2002 or the effective date of this
19amendatory Act of the 92nd General Assembly, whichever is
20greater.
21    (b) In addition to the requirement of subsection (a), the
22rate of compensation payable to the sheriff by the county shall
23not be less than the following:
24    To each such sheriff in counties containing less than
2510,000 inhabitants, not less than $27,000 per annum.

 

 

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1    To each such sheriff in counties containing 10,000 or more
2inhabitants but less than 20,000 inhabitants, not less than
3$31,000 per annum.
4    To each such sheriff in counties containing 20,000 or more
5inhabitants but less than 30,000 inhabitants, not less than
6$34,000 per annum.
7    To each such sheriff in counties containing 30,000 or more
8inhabitants but less than 60,000 inhabitants, not less than
9$37,000 per annum.
10    To each such sheriff in counties containing 60,000 or more
11inhabitants but less than 100,000 inhabitants, not less than
12$40,000 per annum.
13    To each such sheriff in counties containing 100,000 or more
14inhabitants but less than 2,000,000 inhabitants, not less than
15$43,000 per annum.
16    The population of each county for the purpose of fixing
17compensation as herein provided, shall be based upon the last
18federal census immediately previous to the election of the
19sheriff in question in such county.
20    (c) (Blank).
21    (d) In addition to the salary provided for in subsections
22(a), (b), and (c), beginning December 1, 1998, subject to
23appropriation, each sheriff, for his or her additional duties
24imposed by other statutes or laws, shall receive an annual
25stipend to be paid by the Illinois Department of Revenue out of
26the Personal Property Tax Replacement Fund in the amount of

 

 

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1$6,500. No stipend shall be paid to any sheriff whose term of
2office begins on or after the effective date of this amendatory
3Act of the 99th General Assembly.
4    (e) No county board may reduce or otherwise impair the
5compensation payable from county funds to a sheriff if the
6reduction or impairment is the result of the sheriff receiving
7an award or stipend payable from State funds.
8(Source: P.A. 97-72, eff. 7-1-11.)
 
9    (55 ILCS 5/4-8002)  (from Ch. 34, par. 4-8002)
10    Sec. 4-8002. Additional compensation of sheriff and
11recorder.
12    (a) In addition to any salary otherwise provided by law,
13beginning December 1, 1998, subject to appropriation, the
14sheriff of Cook County for his or her additional duties imposed
15by other statutes or laws shall receive an annual stipend to be
16paid by the Illinois Department of Revenue out of the Personal
17Property Tax Replacement Fund in the amount of $6,500. However,
18no such stipend shall be paid to any sheriff of Cook County
19whose term of office begins on or after the effective date of
20this amendatory Act of the 99th General Assembly. The county
21board shall not reduce or otherwise impair the compensation
22payable from county funds to the sheriff if the reduction or
23impairment is the result of the sheriff receiving a stipend
24payable from State funds.
25    (b) In addition to any salary otherwise provided by law,

 

 

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1beginning December 1, 2000, subject to appropriation, the
2recorder of deeds of Cook County for his or her additional
3duties imposed by law shall receive an annual stipend to be
4paid by the State in an amount equal to the stipend paid to
5each recorder in other counties under subsection (d) of Section
64-6001 of this Code. However, no such stipend shall be paid to
7any recorder of deeds of Cook County whose term of office
8begins on or after the effective date of this amendatory Act of
9the 99th General Assembly. The county board may not reduce or
10otherwise impair the compensation payable from county funds to
11the recorder of deeds if the reduction or impairment is the
12result of the recorder of deeds receiving a stipend payable
13from State funds.
14(Source: P.A. 97-72, eff. 7-1-11; 97-619, eff. 11-14-11.)
 
15    Section 15-30. The Clerks of Courts Act is amended by
16changing Section 27.3 as follows:
 
17    (705 ILCS 105/27.3)  (from Ch. 25, par. 27.3)
18    Sec. 27.3. Compensation.
19    (a) The county board shall provide the compensation of
20Clerks of the Circuit Court, and the amount necessary for clerk
21hire, stationery, fuel and other expenses. Beginning December
221, 1989, the compensation per annum for Clerks of the Circuit
23Court shall be as follows:
24    In counties where the population is:

 

 

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1Less than 14,000.......................at least $13,500
214,001-30,000..........................at least $14,500
330,001-60,000..........................at least $15,000
460,001-100,000.........................at least $15,000
5100,001-200,000........................at least $16,500
6200,001-300,000........................at least $18,000
7300,001- 3,000,000.....................at least $20,000
8Over 3,000,000.........................at least $55,000
9    (b) In counties in which the population is 3,000,000 or
10less, "base salary" is the compensation paid for each Clerk of
11the Circuit Court, respectively, before July 1, 1989.
12    (c) The Clerks of the Circuit Court, in counties in which
13the population is 3,000,000 or less, shall be compensated as
14follows:
15        (1) Beginning December 1, 1989, base salary plus at
16    least 3% of base salary.
17        (2) Beginning December 1, 1990, base salary plus at
18    least 6% of base salary.
19        (3) Beginning December 1, 1991, base salary plus at
20    least 9% of base salary.
21        (4) Beginning December 1, 1992, base salary plus at
22    least 12% of base salary.
23    (d) In addition to the compensation provided by the county
24board, each Clerk of the Circuit Court shall receive an award
25from the State for the additional duties imposed by Sections
265-9-1 and 5-9-1.2 of the Unified Code of Corrections, Section

 

 

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110 of the Violent Crime Victims Assistance Act, Section 16-104a
2of the Illinois Vehicle Code, and other laws, in the following
3amount:
4    (1) $3,500 per year before January 1, 1997.
5    (2) $4,500 per year beginning January 1, 1997.
6    (3) $5,500 per year beginning January 1, 1998.
7    (4) $6,500 per year beginning January 1, 1999.
8The total amount required for such awards shall be appropriated
9each year by the General Assembly to the Supreme Court, which
10shall distribute such awards in annual lump sum payments to the
11Clerks of the Circuit Court in all counties. This annual award,
12and any other award or stipend paid out of State funds to the
13Clerks of the Circuit Court, shall not affect any other
14compensation provided by law to be paid to Clerks of the
15Circuit Court. No award or stipend authorized under this
16subsection (d) shall be paid to any recorder of deeds of Cook
17County whose term of office begins on or after the effective
18date of this amendatory Act of the 99th General Assembly.
19    (e) (Blank).
20    (f) No county board may reduce or otherwise impair the
21compensation payable from county funds to a Clerk of the
22Circuit Court if the reduction or impairment is the result of
23the Clerk of the Circuit Court receiving an award or stipend
24payable from State funds.
25(Source: P.A. 98-24, eff. 6-19-13.)
 

 

 

HB4300- 237 -LRB099 14379 HLH 38474 b

1    Section 15-35. The Limited Liability Company Act is amended
2by changing Section 50-10 as follows:
 
3    (805 ILCS 180/50-10)
4    Sec. 50-10. Fees.
5    (a) The Secretary of State shall charge and collect in
6accordance with the provisions of this Act and rules
7promulgated under its authority all of the following:
8        (1) Fees for filing documents.
9        (2) Miscellaneous charges.
10        (3) Fees for the sale of lists of filings and for
11    copies of any documents.
12    (b) The Secretary of State shall charge and collect for all
13of the following:
14        (1) Filing articles of organization (domestic),
15    application for admission (foreign), and restated articles
16    of organization (domestic), $150 $500. Notwithstanding the
17    foregoing, the fee for filing articles of organization
18    (domestic), application for admission (foreign), and
19    restated articles of organization (domestic) in connection
20    with a limited liability company with ability to establish
21    series pursuant to Section 37-40 of this Act is $400 $750.
22        (2) Filing articles of amendment or an amended
23    application for admission, $50 $150.
24        (3) Filing articles of dissolution or application for
25    withdrawal, $5 $100.

 

 

HB4300- 238 -LRB099 14379 HLH 38474 b

1        (4) Filing an application to reserve a name, $25 $300.
2        (5) Filing a notice of cancellation of a reserved name,
3    $5 $100.
4        (6) Filing a notice of a transfer of a reserved name,
5    $25 $100.
6        (7) Registration of a name, $50 $300.
7        (8) Renewal of registration of a name, $50 $100.
8        (9) Filing an application for use of an assumed name
9    under Section 1-20 of this Act, $150 for each year or part
10    thereof ending in 0 or 5, $120 for each year or part
11    thereof ending in 1 or 6, $90 for each year or part thereof
12    ending in 2 or 7, $60 for each year or part thereof ending
13    in 3 or 8, $30 for each year or part thereof ending in 4 or
14    9, and a renewal for each assumed name, $150.
15        (9.5) Filing an application for change of an assumed
16    name, $25.
17        (10) Filing an application for change or cancellation
18    of an assumed name, $5 $100.
19        (11) Filing an annual report of a limited liability
20    company or foreign limited liability company, $75 $250, if
21    filed as required by this Act, plus a penalty if
22    delinquent. Notwithstanding the foregoing, the fee for
23    filing an annual report of a limited liability company or
24    foreign limited liability company with ability to
25    establish series is $75 $250 plus $50 for each series for
26    which a certificate of designation has been filed pursuant

 

 

HB4300- 239 -LRB099 14379 HLH 38474 b

1    to Section 37-40 of this Act and active on the last day of
2    the third month preceding the company's anniversary month,
3    plus a penalty if delinquent.
4        (12) Filing an application for reinstatement of a
5    limited liability company or foreign limited liability
6    company $200 $500.
7        (13) Filing Articles of Merger, $100 plus $50 for each
8    party to the merger in excess of the first 2 parties.
9        (14) Filing an Agreement of Conversion or Statement of
10    Conversion, $100.
11        (15) Filing a statement of change of address of
12    registered office or change of registered agent, or both,
13    or filing a statement of correction, $25.
14        (16) Filing a petition for refund, $5 $15.
15        (17) Filing any other document, $5 $100.
16        (18) Filing a certificate of designation of a limited
17    liability company with the ability to establish series
18    pursuant to Section 37-40 of this Act, $50.
19    (c) The Secretary of State shall charge and collect all of
20the following:
21        (1) For furnishing a copy or certified copy of any
22    document, instrument, or paper relating to a limited
23    liability company or foreign limited liability company, or
24    for a certificate, $25.
25        (2) For the transfer of information by computer process
26    media to any purchaser, fees established by rule.

 

 

HB4300- 240 -LRB099 14379 HLH 38474 b

1(Source: P.A. 97-839, eff. 7-20-12.)
 
2
ARTICLE 20. INCOME TAX; CONTINENTAL SHELF

 
3    Section 20-5. The Illinois Income Tax Act is amended by
4changing Section 1501 as follows:
 
5    (35 ILCS 5/1501)  (from Ch. 120, par. 15-1501)
6    Sec. 1501. Definitions.
7    (a) In general. When used in this Act, where not otherwise
8distinctly expressed or manifestly incompatible with the
9intent thereof:
10        (1) Business income. The term "business income" means
11    all income that may be treated as apportionable business
12    income under the Constitution of the United States.
13    Business income is net of the deductions allocable thereto.
14    Such term does not include compensation or the deductions
15    allocable thereto. For each taxable year beginning on or
16    after January 1, 2003, a taxpayer may elect to treat all
17    income other than compensation as business income. This
18    election shall be made in accordance with rules adopted by
19    the Department and, once made, shall be irrevocable.
20        (1.5) Captive real estate investment trust:
21            (A) The term "captive real estate investment
22        trust" means a corporation, trust, or association:
23                (i) that is considered a real estate

 

 

HB4300- 241 -LRB099 14379 HLH 38474 b

1            investment trust for the taxable year under
2            Section 856 of the Internal Revenue Code;
3                (ii) the certificates of beneficial interest
4            or shares of which are not regularly traded on an
5            established securities market; and
6                (iii) of which more than 50% of the voting
7            power or value of the beneficial interest or
8            shares, at any time during the last half of the
9            taxable year, is owned or controlled, directly,
10            indirectly, or constructively, by a single
11            corporation.
12            (B) The term "captive real estate investment
13        trust" does not include:
14                (i) a real estate investment trust of which
15            more than 50% of the voting power or value of the
16            beneficial interest or shares is owned or
17            controlled, directly, indirectly, or
18            constructively, by:
19                    (a) a real estate investment trust, other
20                than a captive real estate investment trust;
21                    (b) a person who is exempt from taxation
22                under Section 501 of the Internal Revenue Code,
23                and who is not required to treat income
24                received from the real estate investment trust
25                as unrelated business taxable income under
26                Section 512 of the Internal Revenue Code;

 

 

HB4300- 242 -LRB099 14379 HLH 38474 b

1                    (c) a listed Australian property trust, if
2                no more than 50% of the voting power or value
3                of the beneficial interest or shares of that
4                trust, at any time during the last half of the
5                taxable year, is owned or controlled, directly
6                or indirectly, by a single person;
7                    (d) an entity organized as a trust,
8                provided a listed Australian property trust
9                described in subparagraph (c) owns or
10                controls, directly or indirectly, or
11                constructively, 75% or more of the voting power
12                or value of the beneficial interests or shares
13                of such entity; or
14                    (e) an entity that is organized outside of
15                the laws of the United States and that
16                satisfies all of the following criteria:
17                        (1) at least 75% of the entity's total
18                    asset value at the close of its taxable
19                    year is represented by real estate assets
20                    (as defined in Section 856(c)(5)(B) of the
21                    Internal Revenue Code, thereby including
22                    shares or certificates of beneficial
23                    interest in any real estate investment
24                    trust), cash and cash equivalents, and
25                    U.S. Government securities;
26                        (2) the entity is not subject to tax on

 

 

HB4300- 243 -LRB099 14379 HLH 38474 b

1                    amounts that are distributed to its
2                    beneficial owners or is exempt from
3                    entity-level taxation;
4                        (3) the entity distributes at least
5                    85% of its taxable income (as computed in
6                    the jurisdiction in which it is organized)
7                    to the holders of its shares or
8                    certificates of beneficial interest on an
9                    annual basis;
10                        (4) either (i) the shares or
11                    beneficial interests of the entity are
12                    regularly traded on an established
13                    securities market or (ii) not more than 10%
14                    of the voting power or value in the entity
15                    is held, directly, indirectly, or
16                    constructively, by a single entity or
17                    individual; and
18                        (5) the entity is organized in a
19                    country that has entered into a tax treaty
20                    with the United States; or
21                (ii) during its first taxable year for which it
22            elects to be treated as a real estate investment
23            trust under Section 856(c)(1) of the Internal
24            Revenue Code, a real estate investment trust the
25            certificates of beneficial interest or shares of
26            which are not regularly traded on an established

 

 

HB4300- 244 -LRB099 14379 HLH 38474 b

1            securities market, but only if the certificates of
2            beneficial interest or shares of the real estate
3            investment trust are regularly traded on an
4            established securities market prior to the earlier
5            of the due date (including extensions) for filing
6            its return under this Act for that first taxable
7            year or the date it actually files that return.
8            (C) For the purposes of this subsection (1.5), the
9        constructive ownership rules prescribed under Section
10        318(a) of the Internal Revenue Code, as modified by
11        Section 856(d)(5) of the Internal Revenue Code, apply
12        in determining the ownership of stock, assets, or net
13        profits of any person.
14            (D) For the purposes of this item (1.5), for
15        taxable years ending on or after August 16, 2007, the
16        voting power or value of the beneficial interest or
17        shares of a real estate investment trust does not
18        include any voting power or value of beneficial
19        interest or shares in a real estate investment trust
20        held directly or indirectly in a segregated asset
21        account by a life insurance company (as described in
22        Section 817 of the Internal Revenue Code) to the extent
23        such voting power or value is for the benefit of
24        entities or persons who are either immune from taxation
25        or exempt from taxation under subtitle A of the
26        Internal Revenue Code.

 

 

HB4300- 245 -LRB099 14379 HLH 38474 b

1        (2) Commercial domicile. The term "commercial
2    domicile" means the principal place from which the trade or
3    business of the taxpayer is directed or managed.
4        (3) Compensation. The term "compensation" means wages,
5    salaries, commissions and any other form of remuneration
6    paid to employees for personal services.
7        (4) Corporation. The term "corporation" includes
8    associations, joint-stock companies, insurance companies
9    and cooperatives. Any entity, including a limited
10    liability company formed under the Illinois Limited
11    Liability Company Act, shall be treated as a corporation if
12    it is so classified for federal income tax purposes.
13        (5) Department. The term "Department" means the
14    Department of Revenue of this State.
15        (6) Director. The term "Director" means the Director of
16    Revenue of this State.
17        (7) Fiduciary. The term "fiduciary" means a guardian,
18    trustee, executor, administrator, receiver, or any person
19    acting in any fiduciary capacity for any person.
20        (8) Financial organization.
21            (A) The term "financial organization" means any
22        bank, bank holding company, trust company, savings
23        bank, industrial bank, land bank, safe deposit
24        company, private banker, savings and loan association,
25        building and loan association, credit union, currency
26        exchange, cooperative bank, small loan company, sales

 

 

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1        finance company, investment company, or any person
2        which is owned by a bank or bank holding company. For
3        the purpose of this Section a "person" will include
4        only those persons which a bank holding company may
5        acquire and hold an interest in, directly or
6        indirectly, under the provisions of the Bank Holding
7        Company Act of 1956 (12 U.S.C. 1841, et seq.), except
8        where interests in any person must be disposed of
9        within certain required time limits under the Bank
10        Holding Company Act of 1956.
11            (B) For purposes of subparagraph (A) of this
12        paragraph, the term "bank" includes (i) any entity that
13        is regulated by the Comptroller of the Currency under
14        the National Bank Act, or by the Federal Reserve Board,
15        or by the Federal Deposit Insurance Corporation and
16        (ii) any federally or State chartered bank operating as
17        a credit card bank.
18            (C) For purposes of subparagraph (A) of this
19        paragraph, the term "sales finance company" has the
20        meaning provided in the following item (i) or (ii):
21                (i) A person primarily engaged in one or more
22            of the following businesses: the business of
23            purchasing customer receivables, the business of
24            making loans upon the security of customer
25            receivables, the business of making loans for the
26            express purpose of funding purchases of tangible

 

 

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1            personal property or services by the borrower, or
2            the business of finance leasing. For purposes of
3            this item (i), "customer receivable" means:
4                    (a) a retail installment contract or
5                retail charge agreement within the meaning of
6                the Sales Finance Agency Act, the Retail
7                Installment Sales Act, or the Motor Vehicle
8                Retail Installment Sales Act;
9                    (b) an installment, charge, credit, or
10                similar contract or agreement arising from the
11                sale of tangible personal property or services
12                in a transaction involving a deferred payment
13                price payable in one or more installments
14                subsequent to the sale; or
15                    (c) the outstanding balance of a contract
16                or agreement described in provisions (a) or (b)
17                of this item (i).
18                A customer receivable need not provide for
19            payment of interest on deferred payments. A sales
20            finance company may purchase a customer receivable
21            from, or make a loan secured by a customer
22            receivable to, the seller in the original
23            transaction or to a person who purchased the
24            customer receivable directly or indirectly from
25            that seller.
26                (ii) A corporation meeting each of the

 

 

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1            following criteria:
2                    (a) the corporation must be a member of an
3                "affiliated group" within the meaning of
4                Section 1504(a) of the Internal Revenue Code,
5                determined without regard to Section 1504(b)
6                of the Internal Revenue Code;
7                    (b) more than 50% of the gross income of
8                the corporation for the taxable year must be
9                interest income derived from qualifying loans.
10                A "qualifying loan" is a loan made to a member
11                of the corporation's affiliated group that
12                originates customer receivables (within the
13                meaning of item (i)) or to whom customer
14                receivables originated by a member of the
15                affiliated group have been transferred, to the
16                extent the average outstanding balance of
17                loans from that corporation to members of its
18                affiliated group during the taxable year do not
19                exceed the limitation amount for that
20                corporation. The "limitation amount" for a
21                corporation is the average outstanding
22                balances during the taxable year of customer
23                receivables (within the meaning of item (i))
24                originated by all members of the affiliated
25                group. If the average outstanding balances of
26                the loans made by a corporation to members of

 

 

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1                its affiliated group exceed the limitation
2                amount, the interest income of that
3                corporation from qualifying loans shall be
4                equal to its interest income from loans to
5                members of its affiliated groups times a
6                fraction equal to the limitation amount
7                divided by the average outstanding balances of
8                the loans made by that corporation to members
9                of its affiliated group;
10                    (c) the total of all shareholder's equity
11                (including, without limitation, paid-in
12                capital on common and preferred stock and
13                retained earnings) of the corporation plus the
14                total of all of its loans, advances, and other
15                obligations payable or owed to members of its
16                affiliated group may not exceed 20% of the
17                total assets of the corporation at any time
18                during the tax year; and
19                    (d) more than 50% of all interest-bearing
20                obligations of the affiliated group payable to
21                persons outside the group determined in
22                accordance with generally accepted accounting
23                principles must be obligations of the
24                corporation.
25            This amendatory Act of the 91st General Assembly is
26        declaratory of existing law.

 

 

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1            (D) Subparagraphs (B) and (C) of this paragraph are
2        declaratory of existing law and apply retroactively,
3        for all tax years beginning on or before December 31,
4        1996, to all original returns, to all amended returns
5        filed no later than 30 days after the effective date of
6        this amendatory Act of 1996, and to all notices issued
7        on or before the effective date of this amendatory Act
8        of 1996 under subsection (a) of Section 903, subsection
9        (a) of Section 904, subsection (e) of Section 909, or
10        Section 912. A taxpayer that is a "financial
11        organization" that engages in any transaction with an
12        affiliate shall be a "financial organization" for all
13        purposes of this Act.
14            (E) For all tax years beginning on or before
15        December 31, 1996, a taxpayer that falls within the
16        definition of a "financial organization" under
17        subparagraphs (B) or (C) of this paragraph, but who
18        does not fall within the definition of a "financial
19        organization" under the Proposed Regulations issued by
20        the Department of Revenue on July 19, 1996, may
21        irrevocably elect to apply the Proposed Regulations
22        for all of those years as though the Proposed
23        Regulations had been lawfully promulgated, adopted,
24        and in effect for all of those years. For purposes of
25        applying subparagraphs (B) or (C) of this paragraph to
26        all of those years, the election allowed by this

 

 

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1        subparagraph applies only to the taxpayer making the
2        election and to those members of the taxpayer's unitary
3        business group who are ordinarily required to
4        apportion business income under the same subsection of
5        Section 304 of this Act as the taxpayer making the
6        election. No election allowed by this subparagraph
7        shall be made under a claim filed under subsection (d)
8        of Section 909 more than 30 days after the effective
9        date of this amendatory Act of 1996.
10            (F) Finance Leases. For purposes of this
11        subsection, a finance lease shall be treated as a loan
12        or other extension of credit, rather than as a lease,
13        regardless of how the transaction is characterized for
14        any other purpose, including the purposes of any
15        regulatory agency to which the lessor is subject. A
16        finance lease is any transaction in the form of a lease
17        in which the lessee is treated as the owner of the
18        leased asset entitled to any deduction for
19        depreciation allowed under Section 167 of the Internal
20        Revenue Code.
21        (9) Fiscal year. The term "fiscal year" means an
22    accounting period of 12 months ending on the last day of
23    any month other than December.
24        (9.5) Fixed place of business. The term "fixed place of
25    business" has the same meaning as that term is given in
26    Section 864 of the Internal Revenue Code and the related

 

 

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1    Treasury regulations.
2        (10) Includes and including. The terms "includes" and
3    "including" when used in a definition contained in this Act
4    shall not be deemed to exclude other things otherwise
5    within the meaning of the term defined.
6        (11) Internal Revenue Code. The term "Internal Revenue
7    Code" means the United States Internal Revenue Code of 1954
8    or any successor law or laws relating to federal income
9    taxes in effect for the taxable year.
10        (11.5) Investment partnership.
11            (A) The term "investment partnership" means any
12        entity that is treated as a partnership for federal
13        income tax purposes that meets the following
14        requirements:
15                (i) no less than 90% of the partnership's cost
16            of its total assets consists of qualifying
17            investment securities, deposits at banks or other
18            financial institutions, and office space and
19            equipment reasonably necessary to carry on its
20            activities as an investment partnership;
21                (ii) no less than 90% of its gross income
22            consists of interest, dividends, and gains from
23            the sale or exchange of qualifying investment
24            securities; and
25                (iii) the partnership is not a dealer in
26            qualifying investment securities.

 

 

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1            (B) For purposes of this paragraph (11.5), the term
2        "qualifying investment securities" includes all of the
3        following:
4                (i) common stock, including preferred or debt
5            securities convertible into common stock, and
6            preferred stock;
7                (ii) bonds, debentures, and other debt
8            securities;
9                (iii) foreign and domestic currency deposits
10            secured by federal, state, or local governmental
11            agencies;
12                (iv) mortgage or asset-backed securities
13            secured by federal, state, or local governmental
14            agencies;
15                (v) repurchase agreements and loan
16            participations;
17                (vi) foreign currency exchange contracts and
18            forward and futures contracts on foreign
19            currencies;
20                (vii) stock and bond index securities and
21            futures contracts and other similar financial
22            securities and futures contracts on those
23            securities;
24                (viii) options for the purchase or sale of any
25            of the securities, currencies, contracts, or
26            financial instruments described in items (i) to

 

 

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1            (vii), inclusive;
2                (ix) regulated futures contracts;
3                (x) commodities (not described in Section
4            1221(a)(1) of the Internal Revenue Code) or
5            futures, forwards, and options with respect to
6            such commodities, provided, however, that any item
7            of a physical commodity to which title is actually
8            acquired in the partnership's capacity as a dealer
9            in such commodity shall not be a qualifying
10            investment security;
11                (xi) derivatives; and
12                (xii) a partnership interest in another
13            partnership that is an investment partnership.
14        (12) Mathematical error. The term "mathematical error"
15    includes the following types of errors, omissions, or
16    defects in a return filed by a taxpayer which prevents
17    acceptance of the return as filed for processing:
18            (A) arithmetic errors or incorrect computations on
19        the return or supporting schedules;
20            (B) entries on the wrong lines;
21            (C) omission of required supporting forms or
22        schedules or the omission of the information in whole
23        or in part called for thereon; and
24            (D) an attempt to claim, exclude, deduct, or
25        improperly report, in a manner directly contrary to the
26        provisions of the Act and regulations thereunder any

 

 

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1        item of income, exemption, deduction, or credit.
2        (13) Nonbusiness income. The term "nonbusiness income"
3    means all income other than business income or
4    compensation.
5        (14) Nonresident. The term "nonresident" means a
6    person who is not a resident.
7        (15) Paid, incurred and accrued. The terms "paid",
8    "incurred" and "accrued" shall be construed according to
9    the method of accounting upon the basis of which the
10    person's base income is computed under this Act.
11        (16) Partnership and partner. The term "partnership"
12    includes a syndicate, group, pool, joint venture or other
13    unincorporated organization, through or by means of which
14    any business, financial operation, or venture is carried
15    on, and which is not, within the meaning of this Act, a
16    trust or estate or a corporation; and the term "partner"
17    includes a member in such syndicate, group, pool, joint
18    venture or organization.
19        The term "partnership" includes any entity, including
20    a limited liability company formed under the Illinois
21    Limited Liability Company Act, classified as a partnership
22    for federal income tax purposes.
23        The term "partnership" does not include a syndicate,
24    group, pool, joint venture, or other unincorporated
25    organization established for the sole purpose of playing
26    the Illinois State Lottery.

 

 

HB4300- 256 -LRB099 14379 HLH 38474 b

1        (17) Part-year resident. The term "part-year resident"
2    means an individual who became a resident during the
3    taxable year or ceased to be a resident during the taxable
4    year. Under Section 1501(a)(20)(A)(i) residence commences
5    with presence in this State for other than a temporary or
6    transitory purpose and ceases with absence from this State
7    for other than a temporary or transitory purpose. Under
8    Section 1501(a)(20)(A)(ii) residence commences with the
9    establishment of domicile in this State and ceases with the
10    establishment of domicile in another State.
11        (18) Person. The term "person" shall be construed to
12    mean and include an individual, a trust, estate,
13    partnership, association, firm, company, corporation,
14    limited liability company, or fiduciary. For purposes of
15    Section 1301 and 1302 of this Act, a "person" means (i) an
16    individual, (ii) a corporation, (iii) an officer, agent, or
17    employee of a corporation, (iv) a member, agent or employee
18    of a partnership, or (v) a member, manager, employee,
19    officer, director, or agent of a limited liability company
20    who in such capacity commits an offense specified in
21    Section 1301 and 1302.
22        (18A) Records. The term "records" includes all data
23    maintained by the taxpayer, whether on paper, microfilm,
24    microfiche, or any type of machine-sensible data
25    compilation.
26        (19) Regulations. The term "regulations" includes

 

 

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1    rules promulgated and forms prescribed by the Department.
2        (20) Resident. The term "resident" means:
3            (A) an individual (i) who is in this State for
4        other than a temporary or transitory purpose during the
5        taxable year; or (ii) who is domiciled in this State
6        but is absent from the State for a temporary or
7        transitory purpose during the taxable year;
8            (B) The estate of a decedent who at his or her
9        death was domiciled in this State;
10            (C) A trust created by a will of a decedent who at
11        his death was domiciled in this State; and
12            (D) An irrevocable trust, the grantor of which was
13        domiciled in this State at the time such trust became
14        irrevocable. For purpose of this subparagraph, a trust
15        shall be considered irrevocable to the extent that the
16        grantor is not treated as the owner thereof under
17        Sections 671 through 678 of the Internal Revenue Code.
18        (21) Sales. The term "sales" means all gross receipts
19    of the taxpayer not allocated under Sections 301, 302 and
20    303.
21        (22) State. The term "state" when applied to a
22    jurisdiction other than this State means any state of the
23    United States, the District of Columbia, the Commonwealth
24    of Puerto Rico, any Territory or Possession of the United
25    States, and any foreign country, or any political
26    subdivision of any of the foregoing. For purposes of the

 

 

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1    foreign tax credit under Section 601, the term "state"
2    means any state of the United States, the District of
3    Columbia, the Commonwealth of Puerto Rico, and any
4    territory or possession of the United States, or any
5    political subdivision of any of the foregoing, effective
6    for tax years ending on or after December 31, 1989.
7        (23) Taxable year. The term "taxable year" means the
8    calendar year, or the fiscal year ending during such
9    calendar year, upon the basis of which the base income is
10    computed under this Act. "Taxable year" means, in the case
11    of a return made for a fractional part of a year under the
12    provisions of this Act, the period for which such return is
13    made.
14        (24) Taxpayer. The term "taxpayer" means any person
15    subject to the tax imposed by this Act.
16        (25) International banking facility. The term
17    international banking facility shall have the same meaning
18    as is set forth in the Illinois Banking Act or as is set
19    forth in the laws of the United States or regulations of
20    the Board of Governors of the Federal Reserve System.
21        (26) Income Tax Return Preparer.
22            (A) The term "income tax return preparer" means any
23        person who prepares for compensation, or who employs
24        one or more persons to prepare for compensation, any
25        return of tax imposed by this Act or any claim for
26        refund of tax imposed by this Act. The preparation of a

 

 

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1        substantial portion of a return or claim for refund
2        shall be treated as the preparation of that return or
3        claim for refund.
4            (B) A person is not an income tax return preparer
5        if all he or she does is
6                (i) furnish typing, reproducing, or other
7            mechanical assistance;
8                (ii) prepare returns or claims for refunds for
9            the employer by whom he or she is regularly and
10            continuously employed;
11                (iii) prepare as a fiduciary returns or claims
12            for refunds for any person; or
13                (iv) prepare claims for refunds for a taxpayer
14            in response to any notice of deficiency issued to
15            that taxpayer or in response to any waiver of
16            restriction after the commencement of an audit of
17            that taxpayer or of another taxpayer if a
18            determination in the audit of the other taxpayer
19            directly or indirectly affects the tax liability
20            of the taxpayer whose claims he or she is
21            preparing.
22        (27) Unitary business group.
23            (A) The term "unitary business group" means a group
24        of persons related through common ownership whose
25        business activities are integrated with, dependent
26        upon and contribute to each other. The group will not

 

 

HB4300- 260 -LRB099 14379 HLH 38474 b

1        include those members whose business activity outside
2        the United States is 80% or more of any such member's
3        total business activity; for purposes of this
4        paragraph and clause (a)(3)(B)(ii) of Section 304,
5        business activity within the United States shall be
6        measured by means of the factors ordinarily applicable
7        under subsections (a), (b), (c), (d), or (h) of Section
8        304 except that, in the case of members ordinarily
9        required to apportion business income by means of the 3
10        factor formula of property, payroll and sales
11        specified in subsection (a) of Section 304, including
12        the formula as weighted in subsection (h) of Section
13        304, such members shall not use the sales factor in the
14        computation and the results of the property and payroll
15        factor computations of subsection (a) of Section 304
16        shall be divided by 2 (by one if either the property or
17        payroll factor has a denominator of zero). The
18        computation required by the preceding sentence shall,
19        in each case, involve the division of the member's
20        property, payroll, or revenue miles in the United
21        States, insurance premiums on property or risk in the
22        United States, or financial organization business
23        income from sources within the United States, as the
24        case may be, by the respective worldwide figures for
25        such items. Common ownership in the case of
26        corporations is the direct or indirect control or

 

 

HB4300- 261 -LRB099 14379 HLH 38474 b

1        ownership of more than 50% of the outstanding voting
2        stock of the persons carrying on unitary business
3        activity. Unitary business activity can ordinarily be
4        illustrated where the activities of the members are:
5        (1) in the same general line (such as manufacturing,
6        wholesaling, retailing of tangible personal property,
7        insurance, transportation or finance); or (2) are
8        steps in a vertically structured enterprise or process
9        (such as the steps involved in the production of
10        natural resources, which might include exploration,
11        mining, refining, and marketing); and, in either
12        instance, the members are functionally integrated
13        through the exercise of strong centralized management
14        (where, for example, authority over such matters as
15        purchasing, financing, tax compliance, product line,
16        personnel, marketing and capital investment is not
17        left to each member).
18            (B) In no event, shall any unitary business group
19        include members which are ordinarily required to
20        apportion business income under different subsections
21        of Section 304 except that for tax years ending on or
22        after December 31, 1987 this prohibition shall not
23        apply to a holding company that would otherwise be a
24        member of a unitary business group with taxpayers that
25        apportion business income under any of subsections
26        (b), (c), (c-1), or (d) of Section 304. If a unitary

 

 

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1        business group would, but for the preceding sentence,
2        include members that are ordinarily required to
3        apportion business income under different subsections
4        of Section 304, then for each subsection of Section 304
5        for which there are two or more members, there shall be
6        a separate unitary business group composed of such
7        members. For purposes of the preceding two sentences, a
8        member is "ordinarily required to apportion business
9        income" under a particular subsection of Section 304 if
10        it would be required to use the apportionment method
11        prescribed by such subsection except for the fact that
12        it derives business income solely from Illinois. As
13        used in this paragraph, for taxable years ending before
14        December 31, 2015, the phrase "United States" means
15        only the 50 states and the District of Columbia, but
16        does not include any territory or possession of the
17        United States or any area over which the United States
18        has asserted jurisdiction or claimed exclusive rights
19        with respect to the exploration for or exploitation of
20        natural resources. For taxable years ending on or after
21        December 31, 2015, the phrase "United States", as used
22        in this paragraph, means only the 50 states, the
23        District of Columbia, and any area over which the
24        United States has asserted jurisdiction or claimed
25        exclusive rights with respect to the exploration for or
26        exploitation of natural resources, but does not

 

 

HB4300- 263 -LRB099 14379 HLH 38474 b

1        include any territory or possession of the United
2        States.
3            (C) Holding companies.
4                (i) For purposes of this subparagraph, a
5            "holding company" is a corporation (other than a
6            corporation that is a financial organization under
7            paragraph (8) of this subsection (a) of Section
8            1501 because it is a bank holding company under the
9            provisions of the Bank Holding Company Act of 1956
10            (12 U.S.C. 1841, et seq.) or because it is owned by
11            a bank or a bank holding company) that owns a
12            controlling interest in one or more other
13            taxpayers ("controlled taxpayers"); that, during
14            the period that includes the taxable year and the 2
15            immediately preceding taxable years or, if the
16            corporation was formed during the current or
17            immediately preceding taxable year, the taxable
18            years in which the corporation has been in
19            existence, derived substantially all its gross
20            income from dividends, interest, rents, royalties,
21            fees or other charges received from controlled
22            taxpayers for the provision of services, and gains
23            on the sale or other disposition of interests in
24            controlled taxpayers or in property leased or
25            licensed to controlled taxpayers or used by the
26            taxpayer in providing services to controlled

 

 

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1            taxpayers; and that incurs no substantial expenses
2            other than expenses (including interest and other
3            costs of borrowing) incurred in connection with
4            the acquisition and holding of interests in
5            controlled taxpayers and in the provision of
6            services to controlled taxpayers or in the leasing
7            or licensing of property to controlled taxpayers.
8                (ii) The income of a holding company which is a
9            member of more than one unitary business group
10            shall be included in each unitary business group of
11            which it is a member on a pro rata basis, by
12            including in each unitary business group that
13            portion of the base income of the holding company
14            that bears the same proportion to the total base
15            income of the holding company as the gross receipts
16            of the unitary business group bears to the combined
17            gross receipts of all unitary business groups (in
18            both cases without regard to the holding company)
19            or on any other reasonable basis, consistently
20            applied.
21                (iii) A holding company shall apportion its
22            business income under the subsection of Section
23            304 used by the other members of its unitary
24            business group. The apportionment factors of a
25            holding company which would be a member of more
26            than one unitary business group shall be included

 

 

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1            with the apportionment factors of each unitary
2            business group of which it is a member on a pro
3            rata basis using the same method used in clause
4            (ii).
5                (iv) The provisions of this subparagraph (C)
6            are intended to clarify existing law.
7            (D) If including the base income and factors of a
8        holding company in more than one unitary business group
9        under subparagraph (C) does not fairly reflect the
10        degree of integration between the holding company and
11        one or more of the unitary business groups, the
12        dependence of the holding company and one or more of
13        the unitary business groups upon each other, or the
14        contributions between the holding company and one or
15        more of the unitary business groups, the holding
16        company may petition the Director, under the
17        procedures provided under Section 304(f), for
18        permission to include all base income and factors of
19        the holding company only with members of a unitary
20        business group apportioning their business income
21        under one subsection of subsections (a), (b), (c), or
22        (d) of Section 304. If the petition is granted, the
23        holding company shall be included in a unitary business
24        group only with persons apportioning their business
25        income under the selected subsection of Section 304
26        until the Director grants a petition of the holding

 

 

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1        company either to be included in more than one unitary
2        business group under subparagraph (C) or to include its
3        base income and factors only with members of a unitary
4        business group apportioning their business income
5        under a different subsection of Section 304.
6            (E) If the unitary business group members'
7        accounting periods differ, the common parent's
8        accounting period or, if there is no common parent, the
9        accounting period of the member that is expected to
10        have, on a recurring basis, the greatest Illinois
11        income tax liability must be used to determine whether
12        to use the apportionment method provided in subsection
13        (a) or subsection (h) of Section 304. The prohibition
14        against membership in a unitary business group for
15        taxpayers ordinarily required to apportion income
16        under different subsections of Section 304 does not
17        apply to taxpayers required to apportion income under
18        subsection (a) and subsection (h) of Section 304. The
19        provisions of this amendatory Act of 1998 apply to tax
20        years ending on or after December 31, 1998.
21        (28) Subchapter S corporation. The term "Subchapter S
22    corporation" means a corporation for which there is in
23    effect an election under Section 1362 of the Internal
24    Revenue Code, or for which there is a federal election to
25    opt out of the provisions of the Subchapter S Revision Act
26    of 1982 and have applied instead the prior federal

 

 

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1    Subchapter S rules as in effect on July 1, 1982.
2        (30) Foreign person. The term "foreign person" means
3    any person who is a nonresident alien individual and any
4    nonindividual entity, regardless of where created or
5    organized, whose business activity outside the United
6    States is 80% or more of the entity's total business
7    activity.
 
8    (b) Other definitions.
9        (1) Words denoting number, gender, and so forth, when
10    used in this Act, where not otherwise distinctly expressed
11    or manifestly incompatible with the intent thereof:
12            (A) Words importing the singular include and apply
13        to several persons, parties or things;
14            (B) Words importing the plural include the
15        singular; and
16            (C) Words importing the masculine gender include
17        the feminine as well.
18        (2) "Company" or "association" as including successors
19    and assigns. The word "company" or "association", when used
20    in reference to a corporation, shall be deemed to embrace
21    the words "successors and assigns of such company or
22    association", and in like manner as if these last-named
23    words, or words of similar import, were expressed.
24        (3) Other terms. Any term used in any Section of this
25    Act with respect to the application of, or in connection

 

 

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1    with, the provisions of any other Section of this Act shall
2    have the same meaning as in such other Section.
3(Source: P.A. 99-213, eff. 7-31-15.)
 
4
ARTICLE 25. COMPENSATION; BOARDS AND COMMISSIONS

 
5    Section 25-5. The Personnel Code is amended by changing
6Section 7d as follows:
 
7    (20 ILCS 415/7d)  (from Ch. 127, par. 63b107d)
8    Sec. 7d. Compensation. The chairman shall be paid an annual
9salary of $8,200 from the third Monday in January, 1979 to the
10third Monday in January, 1980; $8,700 from the third Monday in
11January, 1980 to the third Monday in January, 1981; $9,300 from
12the third Monday in January, 1981 to the third Monday in
13January 1982; $10,000 from the third Monday in January, 1982 to
14the effective date of this amendatory Act of the 91st General
15Assembly; and $25,000 until July 1, 2016 thereafter, or as set
16by the Compensation Review Board, whichever is greater. Other
17members of the Commission shall each be paid an annual salary
18of $5,500 from the third Monday in January, 1979 to the third
19Monday in January, 1980; $6,000 from the third Monday in
20January, 1980 to the third Monday in January, 1981; $6,500 from
21the third Monday in January, 1981 to the third Monday in
22January, 1982; $7,500 from the third Monday in January, 1982 to
23the effective date of this amendatory Act of the 91st General

 

 

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1Assembly; and $20,000 until July 1, 2016 thereafter, or as set
2by the Compensation Review Board, whichever is greater. Until
3July 1, 2016, they They shall be entitled to reimbursement for
4necessary traveling and other official expenditures
5necessitated by their official duties. On and after July 1,
62016, no member of the Commission shall receive compensation
7for his or her service on the Commission, nor shall they be
8entitled to reimbursement for necessary traveling and other
9official expenditures necessitated by their official duties.
10(Source: P.A. 91-798, eff. 7-9-00.)
 
11    Section 25-10. The Capital Development Board Act is amended
12by changing Section 6 as follows:
 
13    (20 ILCS 3105/6)  (from Ch. 127, par. 776)
14    Sec. 6.
15    Members of the Board shall serve without compensation but
16shall, until July 1, 2016, be reimbursed for their reasonable
17expenses necessarily incurred in the performance of their
18duties and the exercise of their powers under this Act. Each
19member shall before entering upon the duties of his office,
20take and subscribe the constitutional oath of office and give
21bond in the penal sum of $100,000 conditioned upon the faithful
22performance of his duties. The oath and bond shall be filed in
23the office of the Secretary of State.
24(Source: P.A. 77-1995.)
 

 

 

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1    Section 25-15. The Illinois Finance Authority Act is
2amended by changing Section 801-15 as follows:
 
3    (20 ILCS 3501/801-15)
4    Sec. 801-15. There is hereby created a body politic and
5corporate to be known as the Illinois Finance Authority. The
6exercise of the powers conferred by law shall be an essential
7public function. The Authority shall consist of 15 members, who
8shall be appointed by the Governor, with the advice and consent
9of the Senate. Upon the appointment of the Board and every 2
10years thereafter, the chairperson of the Authority shall be
11selected by the Governor to serve as chairperson for two years.
12Appointments to the Authority shall be persons of recognized
13ability and experience in one or more of the following areas:
14economic development, finance, banking, industrial
15development, small business management, real estate
16development, housing, health facilities financing, local
17government financing, community development, venture finance,
18construction, labor relations, agribusiness, and production
19agriculture. At the time of appointment, the Governor shall
20designate 5 members to serve until the third Monday in July
212005, 5 members to serve until the third Monday in July 2006
22and 5 members to serve until the third Monday in July 2007.
23Thereafter, appointments shall be for 3-year terms. At any
24point in time, the Authority must include no fewer than 2

 

 

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1members who have expertise in agribusiness or production
2agriculture. A member shall serve until his or her successor
3shall be appointed and have qualified for office by filing the
4oath and bond. Members of the Authority shall not be entitled
5to compensation for their services as members, but shall, until
6July 1, 2016, be entitled to reimbursement for all necessary
7expenses incurred in connection with the performance of their
8duties as members. The Governor may remove any member of the
9Authority in case of incompetence, neglect of duty, or
10malfeasance in office, after service on him of a copy of the
11written charges against him and an opportunity to be publicly
12heard in person or by counsel in his own defense upon not less
13than 10 days' notice. From nominations received from the
14Governor, the members of the Authority shall appoint an
15Executive Director who shall be a person knowledgeable in the
16areas of financial markets and instruments, to hold office for
17a one-year term. The Executive Director shall be the chief
18administrative and operational officer of the Authority and
19shall direct and supervise its administrative affairs and
20general management and perform such other duties as may be
21prescribed from time to time by the members and shall receive
22compensation fixed by the Authority. The Executive Director or
23any committee of the members may carry out such
24responsibilities of the members as the members by resolution
25may delegate. The Executive Director shall attend all meetings
26of the Authority; however, no action of the Authority shall be

 

 

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1invalid on account of the absence of the Executive Director
2from a meeting. The Authority may engage the services of such
3other agents and employees, including attorneys, appraisers,
4engineers, accountants, credit analysts and other consultants,
5as it may deem advisable and may prescribe their duties and fix
6their compensation. The Authority may appoint Advisory
7Councils to (1) assist in the formulation of policy goals and
8objectives, (2) assist in the coordination of the delivery of
9services, (3) assist in establishment of funding priorities for
10the various activities of the Authority, and (4) target the
11activities of the Authority to specific geographic regions.
12There may be an Advisory Council on Economic Development. The
13Advisory Council shall consist of no more than 12 members, who
14shall serve at the pleasure of the Authority. Members of the
15Advisory Council shall receive no compensation for their
16services, but may, until July 1, 2016, be reimbursed for
17expenses incurred with their service on the Advisory Council.
18(Source: P.A. 98-344, eff. 8-13-13.)
 
19    Section 25-20. The Illinois Health Facilities Planning Act
20is amended by changing Section 4 as follows:
 
21    (20 ILCS 3960/4)  (from Ch. 111 1/2, par. 1154)
22    (Section scheduled to be repealed on December 31, 2019)
23    Sec. 4. Health Facilities and Services Review Board;
24membership; appointment; term; compensation; quorum.

 

 

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1Notwithstanding any other provision in this Section, members of
2the State Board holding office on the day before the effective
3date of this amendatory Act of the 96th General Assembly shall
4retain their authority.
5    (a) There is created the Health Facilities and Services
6Review Board, which shall perform the functions described in
7this Act. The Department shall provide operational support to
8the Board, including the provision of office space, supplies,
9and clerical, financial, and accounting services. The Board may
10contract with experts related to specific health services or
11facilities and create technical advisory panels to assist in
12the development of criteria, standards, and procedures used in
13the evaluation of applications for permit and exemption.
14    (b) Beginning March 1, 2010, the State Board shall consist
15of 9 voting members. All members shall be residents of Illinois
16and at least 4 shall reside outside the Chicago Metropolitan
17Statistical Area. Consideration shall be given to potential
18appointees who reflect the ethnic and cultural diversity of the
19State. Neither Board members nor Board staff shall be convicted
20felons or have pled guilty to a felony.
21    Each member shall have a reasonable knowledge of the
22practice, procedures and principles of the health care delivery
23system in Illinois, including at least 5 members who shall be
24knowledgeable about health care delivery systems, health
25systems planning, finance, or the management of health care
26facilities currently regulated under the Act. One member shall

 

 

HB4300- 274 -LRB099 14379 HLH 38474 b

1be a representative of a non-profit health care consumer
2advocacy organization. A spouse, parent, sibling, or child of a
3Board member cannot be an employee, agent, or under contract
4with services or facilities subject to the Act. Prior to
5appointment and in the course of service on the Board, members
6of the Board shall disclose the employment or other financial
7interest of any other relative of the member, if known, in
8service or facilities subject to the Act. Members of the Board
9shall declare any conflict of interest that may exist with
10respect to the status of those relatives and recuse themselves
11from voting on any issue for which a conflict of interest is
12declared. No person shall be appointed or continue to serve as
13a member of the State Board who is, or whose spouse, parent,
14sibling, or child is, a member of the Board of Directors of,
15has a financial interest in, or has a business relationship
16with a health care facility.
17    Notwithstanding any provision of this Section to the
18contrary, the term of office of each member of the State Board
19serving on the day before the effective date of this amendatory
20Act of the 96th General Assembly is abolished on the date upon
21which members of the 9-member Board, as established by this
22amendatory Act of the 96th General Assembly, have been
23appointed and can begin to take action as a Board. Members of
24the State Board serving on the day before the effective date of
25this amendatory Act of the 96th General Assembly may be
26reappointed to the 9-member Board. Prior to March 1, 2010, the

 

 

HB4300- 275 -LRB099 14379 HLH 38474 b

1Health Facilities Planning Board shall establish a plan to
2transition its powers and duties to the Health Facilities and
3Services Review Board.
4    (c) The State Board shall be appointed by the Governor,
5with the advice and consent of the Senate. Not more than 5 of
6the appointments shall be of the same political party at the
7time of the appointment.
8    The Secretary of Human Services, the Director of Healthcare
9and Family Services, and the Director of Public Health, or
10their designated representatives, shall serve as ex-officio,
11non-voting members of the State Board.
12    (d) Of those 9 members initially appointed by the Governor
13following the effective date of this amendatory Act of the 96th
14General Assembly, 3 shall serve for terms expiring July 1,
152011, 3 shall serve for terms expiring July 1, 2012, and 3
16shall serve for terms expiring July 1, 2013. Thereafter, each
17appointed member shall hold office for a term of 3 years,
18provided that any member appointed to fill a vacancy occurring
19prior to the expiration of the term for which his or her
20predecessor was appointed shall be appointed for the remainder
21of such term and the term of office of each successor shall
22commence on July 1 of the year in which his predecessor's term
23expires. Each member appointed after the effective date of this
24amendatory Act of the 96th General Assembly shall hold office
25until his or her successor is appointed and qualified. The
26Governor may reappoint a member for additional terms, but no

 

 

HB4300- 276 -LRB099 14379 HLH 38474 b

1member shall serve more than 3 terms, subject to review and
2re-approval every 3 years.
3    (e) Until July 1, 2016, State Board members, while serving
4on business of the State Board, shall receive actual and
5necessary travel and subsistence expenses while so serving away
6from their places of residence. Until March 1, 2010, a member
7of the State Board who experiences a significant financial
8hardship due to the loss of income on days of attendance at
9meetings or while otherwise engaged in the business of the
10State Board may be paid a hardship allowance, as determined by
11and subject to the approval of the Governor's Travel Control
12Board.
13    (f) The Governor shall designate one of the members to
14serve as the Chairman of the Board, who shall be a person with
15expertise in health care delivery system planning, finance or
16management of health care facilities that are regulated under
17the Act. The Chairman shall annually review Board member
18performance and shall report the attendance record of each
19Board member to the General Assembly.
20    (g) The State Board, through the Chairman, shall prepare a
21separate and distinct budget approved by the General Assembly
22and shall hire and supervise its own professional staff
23responsible for carrying out the responsibilities of the Board.
24    (h) The State Board shall meet at least every 45 days, or
25as often as the Chairman of the State Board deems necessary, or
26upon the request of a majority of the members.

 

 

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1    (i) Five members of the State Board shall constitute a
2quorum. The affirmative vote of 5 of the members of the State
3Board shall be necessary for any action requiring a vote to be
4taken by the State Board. A vacancy in the membership of the
5State Board shall not impair the right of a quorum to exercise
6all the rights and perform all the duties of the State Board as
7provided by this Act.
8    (j) A State Board member shall disqualify himself or
9herself from the consideration of any application for a permit
10or exemption in which the State Board member or the State Board
11member's spouse, parent, sibling, or child: (i) has an economic
12interest in the matter; or (ii) is employed by, serves as a
13consultant for, or is a member of the governing board of the
14applicant or a party opposing the application.
15    (k) The Chairman, Board members, and Board staff must
16comply with the Illinois Governmental Ethics Act.
17(Source: P.A. 96-31, eff. 6-30-09; 97-1115, eff. 8-27-12.)
 
18    Section 25-25. The Illinois Pension Code is amended by
19changing Sections 2-127, 14-134, 15-159, 16-167, and 18-158 as
20follows:
 
21    (40 ILCS 5/2-127)  (from Ch. 108 1/2, par. 2-127)
22    Sec. 2-127. Board created. The system shall be administered
23by a board of trustees of 7 members as follows: the President
24of the Senate, ex officio, or his designee; 2 members of the

 

 

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1Senate appointed by the President; 3 members of the House of
2Representatives appointed by the Speaker; and one person
3elected from the member annuitants under rules prescribed by
4the board. Only participants are eligible to serve as board
5members. Not more than two members of the House of
6Representatives, and not more than one member of the Senate so
7appointed shall be of the same political party. Appointed board
8members shall serve for 2-year terms. If the office of
9President of the Senate or Speaker of the House is vacant or
10its incumbent is not a participant, the position of trustee
11otherwise occupied by such officers shall be deemed vacant and
12be filled by appointment by the Governor with a member of the
13Senate or the House, as the case may be. This appointment shall
14be of the same political party as the vacated position.
15    Elections for the annuitant member shall be held in January
16of 1993 and every fourth year thereafter. Nominations and
17elections shall be conducted in accordance with such procedures
18as the Board may prescribe. In the event that only one eligible
19person is nominated, the Board may declare the nominee elected
20at the close of the nomination period, and need not conduct an
21election. The annuitant member elected in 1989 shall serve for
22a term of 4 years beginning February 1, 1989; thereafter, an
23annuitant member shall serve for a period of 4 years from the
24February 1st immediately following the date of election, and
25until a successor is elected and qualified.
26    Every person designated to serve as a trustee shall take an

 

 

HB4300- 279 -LRB099 14379 HLH 38474 b

1oath of office and shall thereupon qualify as a trustee. The
2oath shall state that the person will diligently and honestly
3administer the affairs of the system, and will not knowingly
4violate or wilfully permit the violation of any of the
5provisions of this Article.
6    Beginning on July 1, 2016, trustees shall serve without
7compensation and shall not be reimbursed for expenses incurred
8with their service as trustee.
9(Source: P.A. 86-273; 86-1488.)
 
10    (40 ILCS 5/14-134)  (from Ch. 108 1/2, par. 14-134)
11    Sec. 14-134. Board created. The retirement system created
12by this Article shall be a trust, separate and distinct from
13all other entities. The responsibility for the operation of the
14system and for making effective this Article is vested in a
15board of trustees.
16    The board shall consist of 7 trustees, as follows:
17    (a) the Director of the Governor's Office of Management and
18Budget; (b) the Comptroller; (c) one trustee, not a State
19employee, who shall be Chairman, to be appointed by the
20Governor for a 5 year term; (d) two members of the system, one
21of whom shall be an annuitant age 60 or over, having at least 8
22years of creditable service, to be appointed by the Governor
23for terms of 5 years; (e) one member of the system having at
24least 8 years of creditable service, to be elected from the
25contributing membership of the system by the contributing

 

 

HB4300- 280 -LRB099 14379 HLH 38474 b

1members as provided in Section 14-134.1; (f) one annuitant of
2the system who has been an annuitant for at least one full
3year, to be elected from and by the annuitants of the system,
4as provided in Section 14-134.1. The Director of the Governor's
5Office of Management and Budget and the Comptroller shall be
6ex-officio members and shall serve as trustees during their
7respective terms of office, except that each of them may
8designate another officer or employee from the same agency to
9serve in his or her place. However, no ex-officio member may
10designate a different proxy within one year after designating a
11proxy unless the person last so designated has become
12ineligible to serve in that capacity. Except for the elected
13trustees, any vacancy in the office of trustee shall be filled
14in the same manner as the office was filled previously.
15    A trustee shall serve until a successor qualifies, except
16that a trustee who is a member of the system shall be
17disqualified as a trustee immediately upon terminating service
18with the State.
19    Notwithstanding any provision of this Section to the
20contrary, the term of office of each trustee of the board
21appointed by the Governor who is sitting on the board on the
22effective date of this amendatory Act of the 96th General
23Assembly is terminated on that effective date.
24    Beginning on the 90th day after the effective date of this
25amendatory Act of the 96th General Assembly, the board shall
26consist of 13 trustees as follows:

 

 

HB4300- 281 -LRB099 14379 HLH 38474 b

1        (1) the Comptroller, who shall be the Chairperson;
2        (2) six persons appointed by the Governor with the
3    advice and consent of the Senate who may not be members of
4    the system or hold an elective State office and who shall
5    serve for a term of 5 years, except that the terms of the
6    initial appointees under this amendatory Act of the 96th
7    General Assembly shall be as follows: 3 for a term of 3
8    years and 3 for a term of 5 years;
9        (3) four active participants of the system having at
10    least 8 years of creditable service, to be elected from the
11    contributing members of the system by the contribution
12    members as provided in Section 14-134.1; and
13        (4) two annuitants of the system who have been
14    annuitants for at least one full year, to be elected from
15    and by the annuitants of the system, as provided in Section
16    14-134.1.
17    For the purposes of this Section, the Governor may make a
18nomination and the Senate may confirm the nominee in advance of
19the commencement of the nominee's term of office. The Governor
20shall make nominations for appointment to the board under this
21Section within 60 days after the effective date of this
22amendatory Act of the 96th General Assembly. A trustee sitting
23on the board on the effective date of this amendatory Act of
24the 96th General Assembly may not hold over in office for more
25than 90 days after the effective date of this amendatory Act of
26the 96th General Assembly. Nothing in this Section shall

 

 

HB4300- 282 -LRB099 14379 HLH 38474 b

1prevent the Governor from making a temporary appointment or
2nominating a trustee holding office on the day before the
3effective date of this amendatory Act of the 96th General
4Assembly.
5    Each trustee is entitled to one vote on the board, and 4
6trustees shall constitute a quorum for the transaction of
7business. The affirmative votes of a majority of the trustees
8present, but at least 3 trustees, shall be necessary for action
9by the board at any meeting. On the 90th day after the
10effective date of this amendatory Act of the 96th General
11Assembly, 7 trustees shall constitute a quorum for the
12transaction of business and the affirmative vote of a majority
13of the trustees present, but at least 7 trustees, shall be
14necessary for action by the board at any meeting. The board's
15action of July 22, 1986, by which it amended the bylaws of the
16system to increase the number of affirmative votes required for
17board action from 3 to 4 (in response to Public Act 84-1028,
18which increased the number of trustees from 5 to 7), and the
19board's rejection, between that date and the effective date of
20this amendatory Act of 1993, of proposed actions not receiving
21at least 4 affirmative votes, are hereby validated.
22    The trustees shall serve without compensation, but shall,
23until July 1, 2016, be reimbursed from the funds of the system
24for all necessary expenses incurred through service on the
25board.
26    Each trustee shall take an oath of office that he or she

 

 

HB4300- 283 -LRB099 14379 HLH 38474 b

1will diligently and honestly administer the affairs of the
2system, and will not knowingly violate or willfully permit the
3violation of any of the provisions of law applicable to the
4system. The oath shall be subscribed to by the trustee making
5it, certified by the officer before whom it is taken, and filed
6with the Secretary of State. A trustee shall qualify for
7membership on the board when the oath has been approved by the
8board.
9(Source: P.A. 96-6, eff. 4-3-09.)
 
10    (40 ILCS 5/15-159)  (from Ch. 108 1/2, par. 15-159)
11    Sec. 15-159. Board created.
12    (a) A board of trustees constituted as provided in this
13Section shall administer this System. The board shall be known
14as the Board of Trustees of the State Universities Retirement
15System.
16    (b) (Blank).
17    (c) (Blank).
18    (d) Beginning on the 90th day after April 3, 2009 (the
19effective date of Public Act 96-6), the Board of Trustees shall
20be constituted as follows:
21        (1) The Chairperson of the Board of Higher Education,
22    who shall act as chairperson of this Board.
23        (2) Four trustees appointed by the Governor with the
24    advice and consent of the Senate who may not be members of
25    the system or hold an elective State office and who shall

 

 

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1    serve for a term of 6 years, except that the terms of the
2    initial appointees under this subsection (d) shall be as
3    follows: 2 for a term of 3 years and 2 for a term of 6
4    years.
5        (3) Four active participants of the system to be
6    elected from the contributing membership of the system by
7    the contributing members, no more than 2 of which may be
8    from any of the University of Illinois campuses, who shall
9    serve for a term of 6 years, except that the terms of the
10    initial electees shall be as follows: 2 for a term of 3
11    years and 2 for a term of 6 years.
12        (4) Two annuitants of the system who have been
13    annuitants for at least one full year, to be elected from
14    and by the annuitants of the system, no more than one of
15    which may be from any of the University of Illinois
16    campuses, who shall serve for a term of 6 years, except
17    that the terms of the initial electees shall be as follows:
18    one for a term of 3 years and one for a term of 6 years.
19    For the purposes of this Section, the Governor may make a
20nomination and the Senate may confirm the nominee in advance of
21the commencement of the nominee's term of office.
22    (e) The 6 elected trustees shall be elected within 90 days
23after April 3, 2009 (the effective date of Public Act 96-6) for
24a term beginning on the 90th day after that effective date.
25Trustees shall be elected thereafter as terms expire for a
266-year term beginning July 15 next following their election,

 

 

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1and such election shall be held on May 1, or on May 2 when May 1
2falls on a Sunday. The board may establish rules for the
3election of trustees to implement the provisions of Public Act
496-6 and for future elections. Candidates for the participating
5trustee shall be nominated by petitions in writing, signed by
6not less than 400 participants with their addresses shown
7opposite their names. Candidates for the annuitant trustee
8shall be nominated by petitions in writing, signed by not less
9than 100 annuitants with their addresses shown opposite their
10names. If there is more than one qualified nominee for each
11elected trustee, then the board shall conduct a secret ballot
12election by mail for that trustee, in accordance with rules as
13established by the board. If there is only one qualified person
14nominated by petition for each elected trustee, then the
15election as required by this Section shall not be conducted for
16that trustee and the board shall declare such nominee duly
17elected. A vacancy occurring in the elective membership of the
18board shall be filled for the unexpired term by the elected
19trustees serving on the board for the remainder of the term.
20Nothing in this subsection shall preclude the adoption of rules
21providing for internet or phone balloting in addition, or as an
22alternative, to election by mail.
23    (f) A vacancy in the appointed membership on the board of
24trustees caused by resignation, death, expiration of term of
25office, or other reason shall be filled by a qualified person
26appointed by the Governor for the remainder of the unexpired

 

 

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1term.
2    (g) Trustees (other than the trustees incumbent on June 30,
31995 or as provided in subsection (c) of this Section) shall
4continue in office until their respective successors are
5appointed and have qualified, except that a trustee appointed
6to one of the participant positions shall be disqualified
7immediately upon the termination of his or her status as a
8participant and a trustee appointed to one of the annuitant
9positions shall be disqualified immediately upon the
10termination of his or her status as an annuitant receiving a
11retirement annuity.
12    (h) Each trustee must take an oath of office before a
13notary public of this State and shall qualify as a trustee upon
14the presentation to the board of a certified copy of the oath.
15The oath must state that the person will diligently and
16honestly administer the affairs of the retirement system, and
17will not knowingly violate or willfully permit to be violated
18any provisions of this Article.
19    Each trustee shall serve without compensation but shall,
20until July 1, 2016, be reimbursed for expenses necessarily
21incurred in attending board meetings and carrying out his or
22her duties as a trustee or officer of the system.
23(Source: P.A. 98-92, eff. 7-16-13.)
 
24    (40 ILCS 5/16-167)  (from Ch. 108 1/2, par. 16-167)
25    Sec. 16-167. Board - compensation and expenses. The

 

 

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1trustees shall serve without compensation, but shall, until
2July 1, 2016, be reimbursed for all necessary expenses.
3(Source: P.A. 83-1440.)
 
4    (40 ILCS 5/18-158)  (from Ch. 108 1/2, par. 18-158)
5    Sec. 18-158. No compensation.
6    Trustees shall serve without compensation, but shall,
7until July 1, 2016, be reimbursed for any reasonable traveling
8expenses incurred in attending meetings of the board.
9(Source: Laws 1963, p. 161.)
 
10    Section 25-30. The Metropolitan Pier and Exposition
11Authority Act is amended by changing Sections 14 and 23.1 as
12follows:
 
13    (70 ILCS 210/14)  (from Ch. 85, par. 1234)
14    Sec. 14. Board; compensation. The governing and
15administrative body of the Authority shall be a board known as
16the Metropolitan Pier and Exposition Board. On the effective
17date of this amendatory Act of the 96th General Assembly, the
18Trustee shall assume the duties and powers of the Board for a
19period of 18 months or until the Board is fully constituted,
20whichever is later. Any action requiring Board approval shall
21be deemed approved by the Board if the Trustee approves the
22action in accordance with Section 14.5. Beginning the first
23Monday of the month occurring 18 months after the effective

 

 

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1date of this amendatory Act of the 96th General Assembly, the
2Board shall consist of 9 members. The Governor shall appoint 4
3members to the Board, subject to the advice and consent of the
4Senate. The Mayor shall appoint 4 members to the Board. At
5least one member of the Board shall represent the interests of
6labor and at least one member of the Board shall represent the
7interests of the convention industry. A majority of the members
8appointed by the Governor and Mayor shall appoint a ninth
9member to serve as the chairperson. The Board shall be fully
10constituted when a quorum has been appointed. The members of
11the board shall be individuals of generally recognized ability
12and integrity. No member of the Board may be (i) an officer or
13employee of, or a member of a board, commission or authority
14of, the State, any unit of local government or any school
15district or (ii) a person who served on the Board prior to the
16effective date of this amendatory Act of the 96th General
17Assembly.
18    Of the initial members appointed by the Governor, one shall
19serve for a term expiring June 1, 2013, one shall serve for a
20term expiring June 1, 2014, one shall serve for a term expiring
21June 1, 2015, and one shall serve for a term expiring June 1,
222016, as determined by the Governor. Of the initial members
23appointed by the Mayor, one shall serve for a term expiring
24June 1, 2013, one shall serve for a term expiring June 1, 2014,
25one shall serve for a term expiring June 1, 2015, and one shall
26serve for a term expiring June 1, 2016, as determined by the

 

 

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1Mayor. The initial chairperson appointed by the Board shall
2serve a term for a term expiring June 1, 2015. Successors shall
3be appointed to 4-year terms. No person may be appointed to
4more than 2 terms.
5    Members of the Board shall serve without compensation, but
6shall, until July 1, 2016, be reimbursed for actual expenses
7incurred by them in the performance of their duties. All
8members of the Board and employees of the Authority are subject
9to the Illinois Governmental Ethics Act, in accordance with its
10terms.
11(Source: P.A. 96-882, eff. 2-17-10; 96-898, eff. 5-27-10.)
 
12    (70 ILCS 210/23.1)  (from Ch. 85, par. 1243.1)
13    Sec. 23.1. Affirmative action.
14    (a) The Authority shall, within 90 days after the effective
15date of this amendatory Act of 1984, establish and maintain an
16affirmative action program designed to promote equal
17employment opportunity and eliminate the effects of past
18discrimination. Such program shall include a plan, including
19timetables where appropriate, which shall specify goals and
20methods for increasing participation by women and minorities in
21employment, including employment related to the planning,
22organization, and staging of the games, by the Authority and by
23parties which contract with the Authority. The Authority shall
24submit a detailed plan with the General Assembly prior to
25September 1 of each year. Such program shall also establish

 

 

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1procedures and sanctions (including debarment), which the
2Authority shall enforce to ensure compliance with the plan
3established pursuant to this Section and with State and federal
4laws and regulations relating to the employment of women and
5minorities. A determination by the Authority as to whether a
6party to a contract with the Authority has achieved the goals
7or employed the methods for increasing participation by women
8and minorities shall be determined in accordance with the terms
9of such contracts or the applicable provisions of rules and
10regulations of the Authority existing at the time such contract
11was executed, including any provisions for consideration of
12good faith efforts at compliance which the Authority may
13reasonably adopt.
14    (b) The Authority shall adopt and maintain minority and
15female owned business enterprise procurement programs under
16the affirmative action program described in subsection (a) for
17any and all work, including all contracting related to the
18planning, organization, and staging of the games, undertaken by
19the Authority. That work shall include, but is not limited to,
20the purchase of professional services, construction services,
21supplies, materials, and equipment. The programs shall
22establish goals of awarding not less than 25% of the annual
23dollar value of all contracts, purchase orders, or other
24agreements (collectively referred to as "contracts") to
25minority owned businesses and 5% of the annual dollar value of
26all contracts to female owned businesses. Without limiting the

 

 

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1generality of the foregoing, the programs shall require in
2connection with the prequalification or consideration of
3vendors for professional service contracts, construction
4contracts, and contracts for supplies, materials, equipment,
5and services that each proposer or bidder submit as part of his
6or her proposal or bid a commitment detailing how he or she
7will expend 25% or more of the dollar value of his or her
8contracts with one or more minority owned businesses and 5% or
9more of the dollar value with one or more female owned
10businesses. Bids or proposals that do not include such detailed
11commitments are not responsive and shall be rejected unless the
12Authority deems it appropriate to grant a waiver of these
13requirements. In addition the Authority may, in connection with
14the selection of providers of professional services, reserve
15the right to select a minority or female owned business or
16businesses to fulfill the commitment to minority and female
17business participation. The commitment to minority and female
18business participation may be met by the contractor or
19professional service provider's status as a minority or female
20owned business, by joint venture or by subcontracting a portion
21of the work with or purchasing materials for the work from one
22or more such businesses, or by any combination thereof. Each
23contract shall require the contractor or provider to submit a
24certified monthly report detailing the status of that
25contractor or provider's compliance with the Authority's
26minority and female owned business enterprise procurement

 

 

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1program. The Authority, after reviewing the monthly reports of
2the contractors and providers, shall compile a comprehensive
3report regarding compliance with this procurement program and
4file it quarterly with the General Assembly. If, in connection
5with a particular contract, the Authority determines that it is
6impracticable or excessively costly to obtain minority or
7female owned businesses to perform sufficient work to fulfill
8the commitment required by this subsection, the Authority shall
9reduce or waive the commitment in the contract, as may be
10appropriate. The Authority shall establish rules and
11regulations setting forth the standards to be used in
12determining whether or not a reduction or waiver is
13appropriate. The terms "minority owned business" and "female
14owned business" have the meanings given to those terms in the
15Business Enterprise for Minorities, Females, and Persons with
16Disabilities Act.
17    (c) The Authority shall adopt and maintain an affirmative
18action program in connection with the hiring of minorities and
19women on the Expansion Project and on any and all construction
20projects, including all contracting related to the planning,
21organization, and staging of the games, undertaken by the
22Authority. The program shall be designed to promote equal
23employment opportunity and shall specify the goals and methods
24for increasing the participation of minorities and women in a
25representative mix of job classifications required to perform
26the respective contracts awarded by the Authority.

 

 

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1    (d) In connection with the Expansion Project, the Authority
2shall incorporate the following elements into its minority and
3female owned business procurement programs to the extent
4feasible: (1) a major contractors program that permits minority
5owned businesses and female owned businesses to bear
6significant responsibility and risk for a portion of the
7project; (2) a mentor/protege program that provides financial,
8technical, managerial, equipment, and personnel support to
9minority owned businesses and female owned businesses; (3) an
10emerging firms program that includes minority owned businesses
11and female owned businesses that would not otherwise qualify
12for the project due to inexperience or limited resources; (4) a
13small projects program that includes participation by smaller
14minority owned businesses and female owned businesses on jobs
15where the total dollar value is $5,000,000 or less; and (5) a
16set-aside program that will identify contracts requiring the
17expenditure of funds less than $50,000 for bids to be submitted
18solely by minority owned businesses and female owned
19businesses.
20    (e) The Authority is authorized to enter into agreements
21with contractors' associations, labor unions, and the
22contractors working on the Expansion Project to establish an
23Apprenticeship Preparedness Training Program to provide for an
24increase in the number of minority and female journeymen and
25apprentices in the building trades and to enter into agreements
26with Community College District 508 to provide readiness

 

 

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1training. The Authority is further authorized to enter into
2contracts with public and private educational institutions and
3persons in the hospitality industry to provide training for
4employment in the hospitality industry.
5    (f) McCormick Place Advisory Board. There is created a
6McCormick Place Advisory Board composed as follows: 2 members
7shall be appointed by the Mayor of Chicago; 2 members shall be
8appointed by the Governor; 2 members shall be State Senators
9appointed by the President of the Senate; 2 members shall be
10State Senators appointed by the Minority Leader of the Senate;
112 members shall be State Representatives appointed by the
12Speaker of the House of Representatives; and 2 members shall be
13State Representatives appointed by the Minority Leader of the
14House of Representatives. The terms of all previously appointed
15members of the Advisory Board expire on the effective date of
16this amendatory Act of the 92nd General Assembly. A State
17Senator or State Representative member may appoint a designee
18to serve on the McCormick Place Advisory Board in his or her
19absence.
20    A "member of a minority group" shall mean a person who is a
21citizen or lawful permanent resident of the United States and
22who is any of the following:
23        (1) American Indian or Alaska Native (a person having
24    origins in any of the original peoples of North and South
25    America, including Central America, and who maintains
26    tribal affiliation or community attachment).

 

 

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1        (2) Asian (a person having origins in any of the
2    original peoples of the Far East, Southeast Asia, or the
3    Indian subcontinent, including, but not limited to,
4    Cambodia, China, India, Japan, Korea, Malaysia, Pakistan,
5    the Philippine Islands, Thailand, and Vietnam).
6        (3) Black or African American (a person having origins
7    in any of the black racial groups of Africa). Terms such as
8    "Haitian" or "Negro" can be used in addition to "Black or
9    African American".
10        (4) Hispanic or Latino (a person of Cuban, Mexican,
11    Puerto Rican, South or Central American, or other Spanish
12    culture or origin, regardless of race).
13        (5) Native Hawaiian or Other Pacific Islander (a person
14    having origins in any of the original peoples of Hawaii,
15    Guam, Samoa, or other Pacific Islands).
16    Members of the McCormick Place Advisory Board shall serve
172-year terms and until their successors are appointed, except
18members who serve as a result of their elected position whose
19terms shall continue as long as they hold their designated
20elected positions. Vacancies shall be filled by appointment for
21the unexpired term in the same manner as original appointments
22are made. The McCormick Place Advisory Board shall elect its
23own chairperson.
24    Members of the McCormick Place Advisory Board shall serve
25without compensation but, until July 1, 2016, at the
26Authority's discretion, shall be reimbursed for necessary

 

 

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1expenses in connection with the performance of their duties at
2the Authority's discretion.
3    The McCormick Place Advisory Board shall meet quarterly, or
4as needed, shall produce any reports it deems necessary, and
5shall:
6        (1) Work with the Authority on ways to improve the area
7    physically and economically;
8        (2) Work with the Authority regarding potential means
9    for providing increased economic opportunities to
10    minorities and women produced indirectly or directly from
11    the construction and operation of the Expansion Project;
12        (3) Work with the Authority to minimize any potential
13    impact on the area surrounding the McCormick Place
14    Expansion Project, including any impact on minority or
15    female owned businesses, resulting from the construction
16    and operation of the Expansion Project;
17        (4) Work with the Authority to find candidates for
18    building trades apprenticeships, for employment in the
19    hospitality industry, and to identify job training
20    programs;
21        (5) Work with the Authority to implement the provisions
22    of subsections (a) through (e) of this Section in the
23    construction of the Expansion Project, including the
24    Authority's goal of awarding not less than 25% and 5% of
25    the annual dollar value of contracts to minority and female
26    owned businesses, the outreach program for minorities and

 

 

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1    women, and the mentor/protege program for providing
2    assistance to minority and female owned businesses.
3    (g) The Authority shall comply with subsection (e) of
4Section 5-42 of the Olympic Games and Paralympic Games (2016)
5Law. For purposes of this Section, the term "games" has the
6meaning set forth in the Olympic Games and Paralympic Games
7(2016) Law.
8(Source: P.A. 96-7, eff. 4-3-09; 97-396, eff. 1-1-12.)
 
9    Section 25-35. The Illinois International Port District
10Act is amended by changing Section 12 as follows:
 
11    (70 ILCS 1810/12)  (from Ch. 19, par. 163)
12    Sec. 12. The governing and administrative body of the
13District shall be a board consisting of 9 members, to be known
14as the Illinois International Port District Board. Members of
15the Board shall be residents of a county whose territory, in
16whole or in part, is embraced by the District and persons of
17recognized business ability. Until July 1, 2016, the The
18members of the Board shall receive compensation for their
19services, set by the Board at an amount not to exceed
20$20,000.00 annually, except the Chairman may receive an
21additional $5,000.00 annually, if approved by the Board. All
22such compensation shall be paid directly from the Port
23District's operating funds. The members shall receive no other
24compensation whatever, whether in form of salary, per diem

 

 

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1allowance or otherwise, for or in connection with his service
2as a member. The preceding sentence shall not prevent any
3member from receiving any non-salary benefit of the type
4received by employees of the District. Until July 1, 2016, each
5Each member shall be reimbursed for actual expenses incurred by
6them in the performance of their duties. Any person who is
7appointed to the office of secretary or treasurer of the Board
8may receive compensation for services as such officer, as
9determined by the Board, provided such person is not a member
10of the Board. No member of the Board or employee of the
11District shall have any private financial interest, profit or
12benefit in any contract, work or business of the District nor
13in the sale or lease of any property to or from the District.
14(Source: P.A. 93-250, eff. 7-22-03.)
 
15    Section 25-40. The School Code is amended by changing
16Section 14-7.02 as follows:
 
17    (105 ILCS 5/14-7.02)  (from Ch. 122, par. 14-7.02)
18    Sec. 14-7.02. Children attending private schools, public
19out-of-state schools, public school residential facilities or
20private special education facilities. The General Assembly
21recognizes that non-public schools or special education
22facilities provide an important service in the educational
23system in Illinois.
24    If because of his or her disability the special education

 

 

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1program of a district is unable to meet the needs of a child
2and the child attends a non-public school or special education
3facility, a public out-of-state school or a special education
4facility owned and operated by a county government unit that
5provides special educational services required by the child and
6is in compliance with the appropriate rules and regulations of
7the State Superintendent of Education, the school district in
8which the child is a resident shall pay the actual cost of
9tuition for special education and related services provided
10during the regular school term and during the summer school
11term if the child's educational needs so require, excluding
12room, board and transportation costs charged the child by that
13non-public school or special education facility, public
14out-of-state school or county special education facility, or
15$4,500 per year, whichever is less, and shall provide him any
16necessary transportation. "Nonpublic special education
17facility" shall include a residential facility, within or
18without the State of Illinois, which provides special education
19and related services to meet the needs of the child by
20utilizing private schools or public schools, whether located on
21the site or off the site of the residential facility.
22    The State Board of Education shall promulgate rules and
23regulations for determining when placement in a private special
24education facility is appropriate. Such rules and regulations
25shall take into account the various types of services needed by
26a child and the availability of such services to the particular

 

 

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1child in the public school. In developing these rules and
2regulations the State Board of Education shall consult with the
3Advisory Council on Education of Children with Disabilities and
4hold public hearings to secure recommendations from parents,
5school personnel, and others concerned about this matter.
6    The State Board of Education shall also promulgate rules
7and regulations for transportation to and from a residential
8school. Transportation to and from home to a residential school
9more than once each school term shall be subject to prior
10approval by the State Superintendent in accordance with the
11rules and regulations of the State Board.
12    A school district making tuition payments pursuant to this
13Section is eligible for reimbursement from the State for the
14amount of such payments actually made in excess of the district
15per capita tuition charge for students not receiving special
16education services. Such reimbursement shall be approved in
17accordance with Section 14-12.01 and each district shall file
18its claims, computed in accordance with rules prescribed by the
19State Board of Education, on forms prescribed by the State
20Superintendent of Education. Data used as a basis of
21reimbursement claims shall be for the preceding regular school
22term and summer school term. Each school district shall
23transmit its claims to the State Board of Education on or
24before August 15. The State Board of Education, before
25approving any such claims, shall determine their accuracy and
26whether they are based upon services and facilities provided

 

 

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1under approved programs. Upon approval the State Board shall
2cause vouchers to be prepared showing the amount due for
3payment of reimbursement claims to school districts, for
4transmittal to the State Comptroller on the 30th day of
5September, December, and March, respectively, and the final
6voucher, no later than June 20. If the money appropriated by
7the General Assembly for such purpose for any year is
8insufficient, it shall be apportioned on the basis of the
9claims approved.
10    No child shall be placed in a special education program
11pursuant to this Section if the tuition cost for special
12education and related services increases more than 10 percent
13over the tuition cost for the previous school year or exceeds
14$4,500 per year unless such costs have been approved by the
15Illinois Purchased Care Review Board. The Illinois Purchased
16Care Review Board shall consist of the following persons, or
17their designees: the Directors of Children and Family Services,
18Public Health, Public Aid, and the Governor's Office of
19Management and Budget; the Secretary of Human Services; the
20State Superintendent of Education; and such other persons as
21the Governor may designate. The Review Board shall also consist
22of one non-voting member who is an administrator of a private,
23nonpublic, special education school. The Review Board shall
24establish rules and regulations for its determination of
25allowable costs and payments made by local school districts for
26special education, room and board, and other related services

 

 

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1provided by non-public schools or special education facilities
2and shall establish uniform standards and criteria which it
3shall follow. The Review Board shall approve the usual and
4customary rate or rates of a special education program that (i)
5is offered by an out-of-state, non-public provider of
6integrated autism specific educational and autism specific
7residential services, (ii) offers 2 or more levels of
8residential care, including at least one locked facility, and
9(iii) serves 12 or fewer Illinois students.
10    The Review Board shall establish uniform definitions and
11criteria for accounting separately by special education, room
12and board and other related services costs. The Board shall
13also establish guidelines for the coordination of services and
14financial assistance provided by all State agencies to assure
15that no otherwise qualified child with a disability receiving
16services under Article 14 shall be excluded from participation
17in, be denied the benefits of or be subjected to discrimination
18under any program or activity provided by any State agency.
19    The Review Board shall review the costs for special
20education and related services provided by non-public schools
21or special education facilities and shall approve or disapprove
22such facilities in accordance with the rules and regulations
23established by it with respect to allowable costs.
24    The State Board of Education shall provide administrative
25and staff support for the Review Board as deemed reasonable by
26the State Superintendent of Education. No member of the Review

 

 

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1Board shall receive reimbursement for This support shall not
2include travel expenses or other compensation for his or her
3service on the any Review Board member other than the State
4Superintendent of Education.
5    The Review Board shall seek the advice of the Advisory
6Council on Education of Children with Disabilities on the rules
7and regulations to be promulgated by it relative to providing
8special education services.
9    If a child has been placed in a program in which the actual
10per pupil costs of tuition for special education and related
11services based on program enrollment, excluding room, board and
12transportation costs, exceed $4,500 and such costs have been
13approved by the Review Board, the district shall pay such total
14costs which exceed $4,500. A district making such tuition
15payments in excess of $4,500 pursuant to this Section shall be
16responsible for an amount in excess of $4,500 equal to the
17district per capita tuition charge and shall be eligible for
18reimbursement from the State for the amount of such payments
19actually made in excess of the districts per capita tuition
20charge for students not receiving special education services.
21    If a child has been placed in an approved individual
22program and the tuition costs including room and board costs
23have been approved by the Review Board, then such room and
24board costs shall be paid by the appropriate State agency
25subject to the provisions of Section 14-8.01 of this Act. Room
26and board costs not provided by a State agency other than the

 

 

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1State Board of Education shall be provided by the State Board
2of Education on a current basis. In no event, however, shall
3the State's liability for funding of these tuition costs begin
4until after the legal obligations of third party payors have
5been subtracted from such costs. If the money appropriated by
6the General Assembly for such purpose for any year is
7insufficient, it shall be apportioned on the basis of the
8claims approved. Each district shall submit estimated claims to
9the State Superintendent of Education. Upon approval of such
10claims, the State Superintendent of Education shall direct the
11State Comptroller to make payments on a monthly basis. The
12frequency for submitting estimated claims and the method of
13determining payment shall be prescribed in rules and
14regulations adopted by the State Board of Education. Such
15current state reimbursement shall be reduced by an amount equal
16to the proceeds which the child or child's parents are eligible
17to receive under any public or private insurance or assistance
18program. Nothing in this Section shall be construed as
19relieving an insurer or similar third party from an otherwise
20valid obligation to provide or to pay for services provided to
21a child with a disability.
22    If it otherwise qualifies, a school district is eligible
23for the transportation reimbursement under Section 14-13.01
24and for the reimbursement of tuition payments under this
25Section whether the non-public school or special education
26facility, public out-of-state school or county special

 

 

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1education facility, attended by a child who resides in that
2district and requires special educational services, is within
3or outside of the State of Illinois. However, a district is not
4eligible to claim transportation reimbursement under this
5Section unless the district certifies to the State
6Superintendent of Education that the district is unable to
7provide special educational services required by the child for
8the current school year.
9    Nothing in this Section authorizes the reimbursement of a
10school district for the amount paid for tuition of a child
11attending a non-public school or special education facility,
12public out-of-state school or county special education
13facility unless the school district certifies to the State
14Superintendent of Education that the special education program
15of that district is unable to meet the needs of that child
16because of his disability and the State Superintendent of
17Education finds that the school district is in substantial
18compliance with Section 14-4.01. However, if a child is
19unilaterally placed by a State agency or any court in a
20non-public school or special education facility, public
21out-of-state school, or county special education facility, a
22school district shall not be required to certify to the State
23Superintendent of Education, for the purpose of tuition
24reimbursement, that the special education program of that
25district is unable to meet the needs of a child because of his
26or her disability.

 

 

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1    Any educational or related services provided, pursuant to
2this Section in a non-public school or special education
3facility or a special education facility owned and operated by
4a county government unit shall be at no cost to the parent or
5guardian of the child. However, current law and practices
6relative to contributions by parents or guardians for costs
7other than educational or related services are not affected by
8this amendatory Act of 1978.
9    Reimbursement for children attending public school
10residential facilities shall be made in accordance with the
11provisions of this Section.
12    Notwithstanding any other provision of law, any school
13district receiving a payment under this Section or under
14Section 14-7.02b, 14-13.01, or 29-5 of this Code may classify
15all or a portion of the funds that it receives in a particular
16fiscal year or from general State aid pursuant to Section
1718-8.05 of this Code as funds received in connection with any
18funding program for which it is entitled to receive funds from
19the State in that fiscal year (including, without limitation,
20any funding program referenced in this Section), regardless of
21the source or timing of the receipt. The district may not
22classify more funds as funds received in connection with the
23funding program than the district is entitled to receive in
24that fiscal year for that program. Any classification by a
25district must be made by a resolution of its board of
26education. The resolution must identify the amount of any

 

 

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1payments or general State aid to be classified under this
2paragraph and must specify the funding program to which the
3funds are to be treated as received in connection therewith.
4This resolution is controlling as to the classification of
5funds referenced therein. A certified copy of the resolution
6must be sent to the State Superintendent of Education. The
7resolution shall still take effect even though a copy of the
8resolution has not been sent to the State Superintendent of
9Education in a timely manner. No classification under this
10paragraph by a district shall affect the total amount or timing
11of money the district is entitled to receive under this Code.
12No classification under this paragraph by a district shall in
13any way relieve the district from or affect any requirements
14that otherwise would apply with respect to that funding
15program, including any accounting of funds by source, reporting
16expenditures by original source and purpose, reporting
17requirements, or requirements of providing services.
18(Source: P.A. 98-636, eff. 6-6-14; 98-1008, eff. 1-1-15; 99-78,
19eff. 7-20-15; 99-143, eff. 7-27-15.)
 
20    Section 25-45. The Board of Higher Education Act is amended
21by changing Section 5 as follows:
 
22    (110 ILCS 205/5)  (from Ch. 144, par. 185)
23    Sec. 5. The members of the Board shall serve without
24compensation but they shall, until July 1, 2016, be reimbursed

 

 

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1for their actual and necessary traveling and other expenses
2while engaged in the performance of their duties.
3(Source: Laws 1961, p. 3819.)
 
4    Section 25-50. The University of Illinois Trustees Act is
5amended by changing Section 1 as follows:
 
6    (110 ILCS 310/1)  (from Ch. 144, par. 41)
7    Sec. 1. The Board of Trustees of the University of Illinois
8shall consist of the Governor and at least 12 trustees. Nine
9trustees shall be appointed by the Governor, by and with the
10advice and consent of the Senate. The other trustees shall be
11students, of whom one student shall be selected from each
12University campus.
13    Each student trustee shall serve a term of one year,
14beginning on July 1 or on the date of his or her selection,
15whichever is later, and expiring on the next succeeding June
1630.
17    Each trustee shall have all of the privileges of
18membership, except that only one student trustee shall have the
19right to cast a legally binding vote. The Governor shall
20designate which one of the student trustees shall possess, for
21his or her entire term, the right to cast a legally binding
22vote. Each student trustee who does not possess the right to
23cast a legally binding vote shall have the right to cast an
24advisory vote and the right to make and second motions and to

 

 

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1attend executive sessions.
2    Each trustee shall be governed by the same conflict of
3interest standards. Pursuant to those standards, it shall not
4be a conflict of interest for a student trustee to vote on
5matters pertaining to students generally, such as tuition and
6fees. However, it shall be a conflict of interest for a student
7trustee to vote on faculty member tenure or promotion. Student
8trustees shall be chosen by campus-wide student election, and
9the student trustee designated by the Governor to possess a
10legally binding vote shall be one of the students selected by
11this method. A student trustee who does not possess a legally
12binding vote on a measure at a meeting of the Board or any of
13its committees shall not be considered a trustee for the
14purpose of determining whether a quorum is present at the time
15that measure is voted upon. To be eligible for selection as a
16student trustee and to be eligible to remain as a voting or
17nonvoting student trustee, a student trustee must be a resident
18of this State, must have and maintain a grade point average
19that is equivalent to at least 2.5 on a 4.0 scale, and must be a
20full time student enrolled at all times during his or her term
21of office except for that part of the term which follows the
22completion of the last full regular semester of an academic
23year and precedes the first full regular semester of the
24succeeding academic year at the University (sometimes commonly
25referred to as the summer session or summer school). If a
26voting or nonvoting student trustee fails to continue to meet

 

 

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1or maintain the residency, minimum grade point average, or
2enrollment requirement established by this Section, his or her
3membership on the Board shall be deemed to have terminated by
4operation of law. The University may not use residency for
5tuition purposes as a factor in making the determination that a
6student is or is not a resident of this State. The following
7factors shall positively demonstrate residency in this State
8for the purposes of the residency requirement for student
9trustees and candidates for student trustee:
10        (1) evidence of the student's Illinois domicile for at
11    least the previous 6 months;
12        (2) evidence of the student's current, valid Illinois
13    driver's license; and
14        (3) evidence of the student's valid Illinois voter
15    registration.
16A positive demonstration of residency in this State for student
17trustees and candidates for student trustees under this Section
18does not apply to residency requirements for tuition purposes.
19    If a voting student trustee resigns or otherwise ceases to
20serve on the Board, the Governor shall, within 30 days,
21designate one of the remaining student trustees to possess the
22right to cast a legally binding vote for the remainder of his
23or her term. If a nonvoting student trustee resigns or
24otherwise ceases to serve on the Board, the chief executive of
25the student government from that campus shall, within 30 days,
26select a new nonvoting student trustee to serve for the

 

 

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1remainder of the term.
2    No more than 5 of the 9 appointed trustees shall be
3affiliated with the same political party. Each trustee
4appointed by the Governor must be a resident of this State. A
5failure to meet or maintain this residency requirement
6constitutes a resignation from and creates a vacancy in the
7Board. The term of office of each appointed trustee shall be 6
8years from the third Monday in January of each odd numbered
9year. The regular terms of office of the appointed trustees
10shall be staggered so that 3 terms expire in each odd-numbered
11year.
12    Vacancies for appointed trustees shall be filled for the
13unexpired term in the same manner as original appointments. If
14a vacancy in membership occurs at a time when the Senate is not
15in session, the Governor shall make temporary appointments
16until the next meeting of the Senate, when he shall appoint
17persons to fill such memberships for the remainder of their
18respective terms. If the Senate is not in session when
19appointments for a full term are made, appointments shall be
20made as in the case of vacancies.
21    No action of the board shall be invalidated by reason of
22any vacancies on the board, or by reason of any failure to
23select student trustees.
24    Beginning on July 1, 2016, trustees shall serve without
25compensation and shall not be reimbursed for expenses incurred
26with their service as trustee.

 

 

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1(Source: P.A. 98-778, eff. 7-21-14.)
 
2    Section 25-55. The Southern Illinois University Management
3Act is amended by changing Section 4 as follows:
 
4    (110 ILCS 520/4)  (from Ch. 144, par. 654)
5    Sec. 4. Members of the Board shall serve without
6compensation but shall, until July 1, 2016, be entitled to
7reasonable amounts for expenses necessarily incurred in the
8performance of their duties. Until July 1, 2016, such Such
9expenses incurred by any non-voting student member may, at the
10discretion of the Chairman of the Board, be provided for by
11advance payment to such member, who shall account therefor to
12the Board immediately after each meeting.
13    No member of the Board shall hold or be employed in or
14appointed to any office or place under the authority of the
15Board, nor shall any member of the Board be directly or
16indirectly interested in any contract made by the Board, nor
17shall he be an employee of the State Government. This section
18does not prohibit the student members of the Board from
19maintaining normal and official status as enrolled students or
20normal student employment at Southern Illinois University.
21(Source: P.A. 93-1096, eff. 1-1-06.)
 
22    Section 25-60. The Chicago State University Law is amended
23by changing Section 5-20 as follows:
 

 

 

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1    (110 ILCS 660/5-20)
2    Sec. 5-20. Reimbursement; employment limitations. Members
3of the Board shall serve without compensation but shall, until
4July 1, 2016, be entitled to reasonable amounts for expenses
5necessarily incurred in the performance of their duties. Until
6July 1, 2016, such Such expenses incurred by the student member
7may, at the discretion of the Chairman of the Board, be
8provided for by advance payment to the student member, who
9shall account therefor to the Board immediately after each
10meeting.
11    No member of the Board shall hold or be employed in or
12appointed to any office or place under the authority of the
13Board, nor shall any member of the Board be directly or
14indirectly interested in any contract made by the Board, nor
15shall he be an employee of the State Government; provided that
16nothing in this Section shall be deemed to prohibit the student
17member of the Board from maintaining normal and official status
18as an enrolled student or normal student employment at Chicago
19State University.
20(Source: P.A. 93-1096, eff. 1-1-06.)
 
21    Section 25-65. The Eastern Illinois University Law is
22amended by changing Section 10-20 as follows:
 
23    (110 ILCS 665/10-20)

 

 

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1    Sec. 10-20. Reimbursement; employment limitations. Members
2of the Board shall serve without compensation but shall, until
3July 1, 2016, be entitled to reasonable amounts for expenses
4necessarily incurred in the performance of their duties. Until
5July 1, 2016, such Such expenses incurred by the student member
6may, at the discretion of the Chairman of the Board, be
7provided for by advance payment to the student member, who
8shall account therefor to the Board immediately after each
9meeting.
10    No member of the Board shall hold or be employed in or
11appointed to any office or place under the authority of the
12Board, nor shall any member of the Board be directly or
13indirectly interested in any contract made by the Board, nor
14shall he be an employee of the State Government; provided that
15nothing in this Section shall be deemed to prohibit the student
16member of the Board from maintaining normal and official status
17as an enrolled student or normal student employment at Eastern
18Illinois University.
19(Source: P.A. 93-1096, eff. 1-1-06.)
 
20    Section 25-70. The Governors State University Law is
21amended by changing Section 15-20 as follows:
 
22    (110 ILCS 670/15-20)
23    Sec. 15-20. Reimbursement; employment limitations. Members
24of the Board shall serve without compensation but shall, until

 

 

HB4300- 315 -LRB099 14379 HLH 38474 b

1July 1, 2016, be entitled to reasonable amounts for expenses
2necessarily incurred in the performance of their duties. Until
3July 1, 2016, such Such expenses incurred by the student member
4may, at the discretion of the Chairman of the Board, be
5provided for by advance payment to the student member, who
6shall account therefor to the Board immediately after each
7meeting.
8    No member of the Board shall hold or be employed in or
9appointed to any office or place under the authority of the
10Board, nor shall any member of the Board be directly or
11indirectly interested in any contract made by the Board, nor
12shall he be an employee of the State Government; provided that
13nothing in this Section shall be deemed to prohibit the student
14member of the Board from maintaining normal and official status
15as an enrolled student or normal student employment at
16Governors State University.
17(Source: P.A. 93-1096, eff. 1-1-06.)
 
18    Section 25-75. The Illinois State University Law is amended
19by changing Section 20-20 as follows:
 
20    (110 ILCS 675/20-20)
21    Sec. 20-20. Reimbursement; employment limitations. Members
22of the Board shall serve without compensation but shall, until
23July 1, 2016, be entitled to reasonable amounts for expenses
24necessarily incurred in the performance of their duties. Until

 

 

HB4300- 316 -LRB099 14379 HLH 38474 b

1July 1, 2016, such Such expenses incurred by the student member
2may, at the discretion of the Chairman of the Board, be
3provided for by advance payment to the student member, who
4shall account therefor to the Board immediately after each
5meeting.
6    No member of the Board shall hold or be employed in or
7appointed to any office or place under the authority of the
8Board, nor shall any member of the Board be directly or
9indirectly interested in any contract made by the Board, nor
10shall he be an employee of the State Government; provided that
11nothing in this Section shall be deemed to prohibit the student
12member of the Board from maintaining normal and official status
13as an enrolled student or normal student employment at Illinois
14State University.
15(Source: P.A. 93-1096, eff. 1-1-06.)
 
16    Section 25-80. The Northeastern Illinois University Law is
17amended by changing Section 25-20 as follows:
 
18    (110 ILCS 680/25-20)
19    Sec. 25-20. Reimbursement; employment limitations. Members
20of the Board shall serve without compensation but shall, until
21July 1, 2016, be entitled to reasonable amounts for expenses
22necessarily incurred in the performance of their duties. Until
23July 1, 2016, such Such expenses incurred by the student member
24may, at the discretion of the Chairman of the Board, be

 

 

HB4300- 317 -LRB099 14379 HLH 38474 b

1provided for by advance payment to the student member, who
2shall account therefor to the Board immediately after each
3meeting.
4    No member of the Board shall hold or be employed in or
5appointed to any office or place under the authority of the
6Board, nor shall any member of the Board be directly or
7indirectly interested in any contract made by the Board, nor
8shall he be an employee of the State Government; provided that
9nothing in this Section shall be deemed to prohibit the student
10member of the Board from maintaining normal and official status
11as an enrolled student or normal student employment at
12Northeastern Illinois University.
13(Source: P.A. 93-1096, eff. 1-1-06.)
 
14    Section 25-85. The Northern Illinois University Law is
15amended by changing Section 30-20 as follows:
 
16    (110 ILCS 685/30-20)
17    Sec. 30-20. Reimbursement; employment limitations. Members
18of the Board shall serve without compensation but shall, until
19July 1, 2016, be entitled to reasonable amounts for expenses
20necessarily incurred in the performance of their duties. Until
21July 1, 2016, such Such expenses incurred by the student member
22may, at the discretion of the Chairman of the Board, be
23provided for by advance payment to the student member, who
24shall account therefor to the Board immediately after each

 

 

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1meeting.
2    No member of the Board shall hold or be employed in or
3appointed to any office or place under the authority of the
4Board, nor shall any member of the Board be directly or
5indirectly interested in any contract made by the Board, nor
6shall he be an employee of the State Government; provided that
7nothing in this Section shall be deemed to prohibit the student
8member of the Board from maintaining normal and official status
9as an enrolled student or normal student employment at Northern
10Illinois University.
11(Source: P.A. 93-1096, eff. 1-1-06.)
 
12    Section 25-90. The Western Illinois University Law is
13amended by changing Section 35-20 as follows:
 
14    (110 ILCS 690/35-20)
15    Sec. 35-20. Reimbursement; employment limitations. Members
16of the Board shall serve without compensation but shall, until
17July 1, 2016, be entitled to reasonable amounts for expenses
18necessarily incurred in the performance of their duties. Until
19July 1, 2016, such Such expenses incurred by the student member
20may, at the discretion of the Chairman of the Board, be
21provided for by advance payment to the student member, who
22shall account therefor to the Board immediately after each
23meeting.
24    No member of the Board shall hold or be employed in or

 

 

HB4300- 319 -LRB099 14379 HLH 38474 b

1appointed to any office or place under the authority of the
2Board, nor shall any member of the Board be directly or
3indirectly interested in any contract made by the Board, nor
4shall he be an employee of the State Government; provided that
5nothing in this Section shall be deemed to prohibit the student
6member of the Board from maintaining normal and official status
7as an enrolled student or normal student employment at Western
8Illinois University.
9(Source: P.A. 93-1096, eff. 1-1-06.)
 
10    Section 25-95. The Public Community College Act is amended
11by changing Section 2-5 as follows:
 
12    (110 ILCS 805/2-5)  (from Ch. 122, par. 102-5)
13    Sec. 2-5. Compensation and expenses of members. The members
14of the State Board shall serve without compensation but they
15shall, until July 1, 2016, be reimbursed for their actual and
16necessary expenses while engaged in the performance of their
17duties.
18(Source: P.A. 96-910, eff. 7-1-10.)
 
19    Section 25-100. The Higher Education Student Assistance
20Act is amended by changing Section 15 as follows:
 
21    (110 ILCS 947/15)
22    Sec. 15. Illinois Student Assistance Commission.

 

 

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1    (a) There is established the Illinois Student Assistance
2Commission, consisting of 10 persons to be appointed by the
3Governor with the advice and consent of the Senate. The
4membership of the Commission shall consist of one
5representative of the institutions of higher learning operated
6by the State; one representative of the private institutions of
7higher learning located in the State; one representative of the
8public community colleges located in the State; one
9representative of the public high schools located in the State;
105 citizens of the State chosen for their knowledge of and
11interest in higher education, but not employed by,
12professionally affiliated with, or members of the governing
13boards of any institution of higher learning located in the
14State, and one student member selected from nominations
15submitted to the Governor by multi-campus student
16organizations, including but not limited to, the recognized
17advisory committee of students of the Illinois Community
18College Board, the recognized advisory committee of students of
19the Board of Higher Education, and the recognized advisory
20committee of students of the Federation of Independent Illinois
21Colleges and Universities. The Governor shall designate one
22member, other than the student member, as chairman. Each member
23of the Commission, including the student member, shall serve
24without compensation, but shall, until July 1, 2016, be
25reimbursed for expenses necessarily incurred in performing his
26or her duties under this Act. Subject to a requirement that

 

 

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1Commission members in office on the effective date of this
2amendatory Act of 1995 may serve the full term to which they
3were appointed, the appointment of Commission members to terms
4that commence on or after that effective date shall be made in
5a manner that gives effect at the earliest possible time to the
6change that is required by this amendatory Act in the
7representative composition of the Commission's membership.
8    (b) The term of office of each member, other than the
9student member, is 6 years from July 1 of the year of
10appointment, and until his successor is appointed and
11qualified. If a member's tenure of office, other than that of
12the student member, is terminated for any reason before his or
13her term has expired, the Governor shall fill the vacancy by
14the appointment of a person who has the same representative
15status as the person whose term has been so terminated, and the
16new appointee shall hold office only for the remainder of that
17term and until a successor is appointed and qualified. The term
18of the student member shall be for 2 years from July 1 of each
19odd-numbered year. If the tenure of the student member is
20terminated for any reason, the vacancy shall be filled in the
21same manner as heretofore provided for a regular term of office
22appointment of the student member. The new student appointee
23shall hold office only for the remainder of that term. A
24student appointee's status on the Commission may not be
25considered in determining his or her eligibility for programs
26administered by the Commission.

 

 

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1    (c) In accordance with the provisions of the State
2Universities Civil Service Act, the Commission shall employ a
3professionally qualified person as the Executive Director of
4the Commission, and such other employees as may be necessary to
5effectuate the purposes of this Act.
6    (d) The Commission shall meet at least once in each fiscal
7year, and may meet at other times which the Chairman may
8designate by giving at least 10 days' written notice to each
9member.
10(Source: P.A. 99-198, eff. 7-30-15.)
 
11    Section 25-105. The Illinois Plumbing License Law is
12amended by changing Sections 7 and 39 as follows:
 
13    (225 ILCS 320/7)  (from Ch. 111, par. 1106)
14    Sec. 7. (1) There is created an Illinois State Board of
15Plumbing Examiners which shall exercise its duties provided in
16this Act under the supervision of the Department. The Board
17shall consist of 9 licensed plumbers designated from time to
18time by the Director. In making the appointments to the Board,
19the Director shall consider the recommendations of
20individuals, firms or organizations involved in plumbing in
21this State.
22    (2) The Board shall aid the Director and the Department by:
23    (a) Preparing subject matter for examinations as provided
24in this Act.

 

 

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1    (b) Suggesting rules to govern examinations and hearings
2for suspension, revocation or reinstatement of licenses.
3    (c) Submitting recommendations to the Director from time to
4time for the efficient administration of this Act.
5    (d) Grading all tests and examinations for licenses and
6promptly reporting the results to the Director.
7    (e) Performing such other duties from time to time
8prescribed by the Director.
9    (3) Until July 1, 2016, each Each Board member shall be
10compensated the sum of $50 for each day or part thereof on
11which he serves on business of the Board and in addition
12thereto shall be reimbursed for per diem expenses as authorized
13for State employees.
14(Source: P.A. 85-981.)
 
15    (225 ILCS 320/39)  (from Ch. 111, par. 1137)
16    Sec. 39. The Governor shall appoint a Plumbing Code
17Advisory Council to consult with and advise the Department. The
18Council shall be composed of the Director or his or her
19authorized representative, who shall serve as chairman
20ex-officio, and 11 members appointed by the Governor. The
21appointed members shall consist of 4 Illinois licensed plumbers
22engaged in plumbing in Illinois who are residents of Illinois,
23one registered professional engineer actively engaged in
24construction and design of plumbing systems; one licensed
25architect; one elected official of a municipality in Illinois;

 

 

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12 representatives of the consumer public in Illinois; and two
2persons representing labor. Members of the Council shall be
3appointed for 3 year terms. The Plumbing Code Advisory Council
4as appointed by the Governor under authority of this Act shall
5remain in effect for the term of their appointments. Any member
6appointed to fill a vacancy occurring prior to the expiration
7of the term for which his or her predecessor was appointed
8shall be appointed for the remainder of the term.
9    The Council shall meet as frequently as the Chairman deems
10necessary, but not less than once each year. Additional
11meetings may be called by the Chairman or by 3 members of the
12Council upon delivery of 10 days' written notice to the office
13of each member of the Council. Six members of the Council shall
14constitute a quorum. Until July 1, 2016, each Each appointed
15member of the Council shall be reimbursed for actual expenses
16incurred in the performance of his or her duties.
17(Source: P.A. 87-885.)
 
18    Section 25-115. The Illinois Horse Racing Act of 1975 is
19amended by changing Section 5 as follows:
 
20    (230 ILCS 5/5)  (from Ch. 8, par. 37-5)
21    Sec. 5. As soon as practicable following the effective date
22of this amendatory Act of 1995, the Governor shall appoint,
23with the advice and consent of the Senate, members to the Board
24as follows: 3 members for terms expiring July 1, 1996; 3

 

 

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1members for terms expiring July 1, 1998; and 3 members for
2terms expiring July 1, 2000. Of the 2 additional members
3appointed pursuant to this amendatory Act of the 91st General
4Assembly, the initial term of one member shall expire on July
51, 2002 and the initial term of the other member shall expire
6on July 1, 2004. Thereafter, the terms of office of the Board
7members shall be 6 years. Incumbent members on the effective
8date of this amendatory Act of 1995 shall continue to serve
9only until their successors are appointed and have qualified.
10    Until July 1, 2016, each Each member of the Board shall
11receive $300 per day for each day the Board meets and for each
12day the member conducts a hearing pursuant to Section 16 of
13this Act, provided that no Board member shall receive more than
14$5,000 in such fees during any calendar year, or an amount set
15by the Compensation Review Board, whichever is greater. Until
16July 1, 2016, members Members of the Board shall also be
17reimbursed for all actual and necessary expenses and
18disbursements incurred in the execution of their official
19duties.
20(Source: P.A. 91-357, eff. 7-29-99; 91-798, eff. 7-9-00.)
 
21    Section 25-120. The Riverboat Gambling Act is amended by
22changing Section 5 as follows:
 
23    (230 ILCS 10/5)  (from Ch. 120, par. 2405)
24    Sec. 5. Gaming Board.

 

 

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1    (a) (1) There is hereby established the Illinois Gaming
2Board, which shall have the powers and duties specified in this
3Act, and all other powers necessary and proper to fully and
4effectively execute this Act for the purpose of administering,
5regulating, and enforcing the system of riverboat gambling
6established by this Act. Its jurisdiction shall extend under
7this Act to every person, association, corporation,
8partnership and trust involved in riverboat gambling
9operations in the State of Illinois.
10    (2) The Board shall consist of 5 members to be appointed by
11the Governor with the advice and consent of the Senate, one of
12whom shall be designated by the Governor to be chairman. Each
13member shall have a reasonable knowledge of the practice,
14procedure and principles of gambling operations. Each member
15shall either be a resident of Illinois or shall certify that he
16will become a resident of Illinois before taking office. At
17least one member shall be experienced in law enforcement and
18criminal investigation, at least one member shall be a
19certified public accountant experienced in accounting and
20auditing, and at least one member shall be a lawyer licensed to
21practice law in Illinois.
22    (3) The terms of office of the Board members shall be 3
23years, except that the terms of office of the initial Board
24members appointed pursuant to this Act will commence from the
25effective date of this Act and run as follows: one for a term
26ending July 1, 1991, 2 for a term ending July 1, 1992, and 2 for

 

 

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1a term ending July 1, 1993. Upon the expiration of the
2foregoing terms, the successors of such members shall serve a
3term for 3 years and until their successors are appointed and
4qualified for like terms. Vacancies in the Board shall be
5filled for the unexpired term in like manner as original
6appointments. Each member of the Board shall be eligible for
7reappointment at the discretion of the Governor with the advice
8and consent of the Senate.
9    (4) Until July 1, 2016, each Each member of the Board shall
10receive $300 for each day the Board meets and for each day the
11member conducts any hearing pursuant to this Act. Until July 1,
122016, each Each member of the Board shall also be reimbursed
13for all actual and necessary expenses and disbursements
14incurred in the execution of official duties.
15    (5) No person shall be appointed a member of the Board or
16continue to be a member of the Board who is, or whose spouse,
17child or parent is, a member of the board of directors of, or a
18person financially interested in, any gambling operation
19subject to the jurisdiction of this Board, or any race track,
20race meeting, racing association or the operations thereof
21subject to the jurisdiction of the Illinois Racing Board. No
22Board member shall hold any other public office. No person
23shall be a member of the Board who is not of good moral
24character or who has been convicted of, or is under indictment
25for, a felony under the laws of Illinois or any other state, or
26the United States.

 

 

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1    (5.5) No member of the Board shall engage in any political
2activity. For the purposes of this Section, "political" means
3any activity in support of or in connection with any campaign
4for federal, State, or local elective office or any political
5organization, but does not include activities (i) relating to
6the support or opposition of any executive, legislative, or
7administrative action (as those terms are defined in Section 2
8of the Lobbyist Registration Act), (ii) relating to collective
9bargaining, or (iii) that are otherwise in furtherance of the
10person's official State duties or governmental and public
11service functions.
12    (6) Any member of the Board may be removed by the Governor
13for neglect of duty, misfeasance, malfeasance, or nonfeasance
14in office or for engaging in any political activity.
15    (7) Before entering upon the discharge of the duties of his
16office, each member of the Board shall take an oath that he
17will faithfully execute the duties of his office according to
18the laws of the State and the rules and regulations adopted
19therewith and shall give bond to the State of Illinois,
20approved by the Governor, in the sum of $25,000. Every such
21bond, when duly executed and approved, shall be recorded in the
22office of the Secretary of State. Whenever the Governor
23determines that the bond of any member of the Board has become
24or is likely to become invalid or insufficient, he shall
25require such member forthwith to renew his bond, which is to be
26approved by the Governor. Any member of the Board who fails to

 

 

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1take oath and give bond within 30 days from the date of his
2appointment, or who fails to renew his bond within 30 days
3after it is demanded by the Governor, shall be guilty of
4neglect of duty and may be removed by the Governor. The cost of
5any bond given by any member of the Board under this Section
6shall be taken to be a part of the necessary expenses of the
7Board.
8    (7.5) For the examination of all mechanical,
9electromechanical, or electronic table games, slot machines,
10slot accounting systems, and other electronic gaming equipment
11for compliance with this Act, the Board may utilize the
12services of one or more independent outside testing
13laboratories that have been accredited by a national
14accreditation body and that, in the judgment of the Board, are
15qualified to perform such examinations.
16    (8) The Board shall employ such personnel as may be
17necessary to carry out its functions and shall determine the
18salaries of all personnel, except those personnel whose
19salaries are determined under the terms of a collective
20bargaining agreement. No person shall be employed to serve the
21Board who is, or whose spouse, parent or child is, an official
22of, or has a financial interest in or financial relation with,
23any operator engaged in gambling operations within this State
24or any organization engaged in conducting horse racing within
25this State. Any employee violating these prohibitions shall be
26subject to termination of employment.

 

 

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1    (9) An Administrator shall perform any and all duties that
2the Board shall assign him. The salary of the Administrator
3shall be determined by the Board and, in addition, he shall be
4reimbursed for all actual and necessary expenses incurred by
5him in discharge of his official duties. The Administrator
6shall keep records of all proceedings of the Board and shall
7preserve all records, books, documents and other papers
8belonging to the Board or entrusted to its care. The
9Administrator shall devote his full time to the duties of the
10office and shall not hold any other office or employment.
11    (b) The Board shall have general responsibility for the
12implementation of this Act. Its duties include, without
13limitation, the following:
14        (1) To decide promptly and in reasonable order all
15    license applications. Any party aggrieved by an action of
16    the Board denying, suspending, revoking, restricting or
17    refusing to renew a license may request a hearing before
18    the Board. A request for a hearing must be made to the
19    Board in writing within 5 days after service of notice of
20    the action of the Board. Notice of the action of the Board
21    shall be served either by personal delivery or by certified
22    mail, postage prepaid, to the aggrieved party. Notice
23    served by certified mail shall be deemed complete on the
24    business day following the date of such mailing. The Board
25    shall conduct all requested hearings promptly and in
26    reasonable order;

 

 

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1        (2) To conduct all hearings pertaining to civil
2    violations of this Act or rules and regulations promulgated
3    hereunder;
4        (3) To promulgate such rules and regulations as in its
5    judgment may be necessary to protect or enhance the
6    credibility and integrity of gambling operations
7    authorized by this Act and the regulatory process
8    hereunder;
9        (4) To provide for the establishment and collection of
10    all license and registration fees and taxes imposed by this
11    Act and the rules and regulations issued pursuant hereto.
12    All such fees and taxes shall be deposited into the State
13    Gaming Fund;
14        (5) To provide for the levy and collection of penalties
15    and fines for the violation of provisions of this Act and
16    the rules and regulations promulgated hereunder. All such
17    fines and penalties shall be deposited into the Education
18    Assistance Fund, created by Public Act 86-0018, of the
19    State of Illinois;
20        (6) To be present through its inspectors and agents any
21    time gambling operations are conducted on any riverboat for
22    the purpose of certifying the revenue thereof, receiving
23    complaints from the public, and conducting such other
24    investigations into the conduct of the gambling games and
25    the maintenance of the equipment as from time to time the
26    Board may deem necessary and proper;

 

 

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1        (7) To review and rule upon any complaint by a licensee
2    regarding any investigative procedures of the State which
3    are unnecessarily disruptive of gambling operations. The
4    need to inspect and investigate shall be presumed at all
5    times. The disruption of a licensee's operations shall be
6    proved by clear and convincing evidence, and establish
7    that: (A) the procedures had no reasonable law enforcement
8    purposes, and (B) the procedures were so disruptive as to
9    unreasonably inhibit gambling operations;
10        (8) To hold at least one meeting each quarter of the
11    fiscal year. In addition, special meetings may be called by
12    the Chairman or any 2 Board members upon 72 hours written
13    notice to each member. All Board meetings shall be subject
14    to the Open Meetings Act. Three members of the Board shall
15    constitute a quorum, and 3 votes shall be required for any
16    final determination by the Board. The Board shall keep a
17    complete and accurate record of all its meetings. A
18    majority of the members of the Board shall constitute a
19    quorum for the transaction of any business, for the
20    performance of any duty, or for the exercise of any power
21    which this Act requires the Board members to transact,
22    perform or exercise en banc, except that, upon order of the
23    Board, one of the Board members or an administrative law
24    judge designated by the Board may conduct any hearing
25    provided for under this Act or by Board rule and may
26    recommend findings and decisions to the Board. The Board

 

 

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1    member or administrative law judge conducting such hearing
2    shall have all powers and rights granted to the Board in
3    this Act. The record made at the time of the hearing shall
4    be reviewed by the Board, or a majority thereof, and the
5    findings and decision of the majority of the Board shall
6    constitute the order of the Board in such case;
7        (9) To maintain records which are separate and distinct
8    from the records of any other State board or commission.
9    Such records shall be available for public inspection and
10    shall accurately reflect all Board proceedings;
11        (10) To file a written annual report with the Governor
12    on or before March 1 each year and such additional reports
13    as the Governor may request. The annual report shall
14    include a statement of receipts and disbursements by the
15    Board, actions taken by the Board, and any additional
16    information and recommendations which the Board may deem
17    valuable or which the Governor may request;
18        (11) (Blank);
19        (12) (Blank);
20        (13) To assume responsibility for administration and
21    enforcement of the Video Gaming Act; and
22        (14) To adopt, by rule, a code of conduct governing
23    Board members and employees that ensure, to the maximum
24    extent possible, that persons subject to this Code avoid
25    situations, relationships, or associations that may
26    represent or lead to a conflict of interest.

 

 

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1    (c) The Board shall have jurisdiction over and shall
2supervise all gambling operations governed by this Act. The
3Board shall have all powers necessary and proper to fully and
4effectively execute the provisions of this Act, including, but
5not limited to, the following:
6        (1) To investigate applicants and determine the
7    eligibility of applicants for licenses and to select among
8    competing applicants the applicants which best serve the
9    interests of the citizens of Illinois.
10        (2) To have jurisdiction and supervision over all
11    riverboat gambling operations in this State and all persons
12    on riverboats where gambling operations are conducted.
13        (3) To promulgate rules and regulations for the purpose
14    of administering the provisions of this Act and to
15    prescribe rules, regulations and conditions under which
16    all riverboat gambling in the State shall be conducted.
17    Such rules and regulations are to provide for the
18    prevention of practices detrimental to the public interest
19    and for the best interests of riverboat gambling, including
20    rules and regulations regarding the inspection of such
21    riverboats and the review of any permits or licenses
22    necessary to operate a riverboat under any laws or
23    regulations applicable to riverboats, and to impose
24    penalties for violations thereof.
25        (4) To enter the office, riverboats, facilities, or
26    other places of business of a licensee, where evidence of

 

 

HB4300- 335 -LRB099 14379 HLH 38474 b

1    the compliance or noncompliance with the provisions of this
2    Act is likely to be found.
3        (5) To investigate alleged violations of this Act or
4    the rules of the Board and to take appropriate disciplinary
5    action against a licensee or a holder of an occupational
6    license for a violation, or institute appropriate legal
7    action for enforcement, or both.
8        (6) To adopt standards for the licensing of all persons
9    under this Act, as well as for electronic or mechanical
10    gambling games, and to establish fees for such licenses.
11        (7) To adopt appropriate standards for all riverboats
12    and facilities.
13        (8) To require that the records, including financial or
14    other statements of any licensee under this Act, shall be
15    kept in such manner as prescribed by the Board and that any
16    such licensee involved in the ownership or management of
17    gambling operations submit to the Board an annual balance
18    sheet and profit and loss statement, list of the
19    stockholders or other persons having a 1% or greater
20    beneficial interest in the gambling activities of each
21    licensee, and any other information the Board deems
22    necessary in order to effectively administer this Act and
23    all rules, regulations, orders and final decisions
24    promulgated under this Act.
25        (9) To conduct hearings, issue subpoenas for the
26    attendance of witnesses and subpoenas duces tecum for the

 

 

HB4300- 336 -LRB099 14379 HLH 38474 b

1    production of books, records and other pertinent documents
2    in accordance with the Illinois Administrative Procedure
3    Act, and to administer oaths and affirmations to the
4    witnesses, when, in the judgment of the Board, it is
5    necessary to administer or enforce this Act or the Board
6    rules.
7        (10) To prescribe a form to be used by any licensee
8    involved in the ownership or management of gambling
9    operations as an application for employment for their
10    employees.
11        (11) To revoke or suspend licenses, as the Board may
12    see fit and in compliance with applicable laws of the State
13    regarding administrative procedures, and to review
14    applications for the renewal of licenses. The Board may
15    suspend an owners license, without notice or hearing upon a
16    determination that the safety or health of patrons or
17    employees is jeopardized by continuing a riverboat's
18    operation. The suspension may remain in effect until the
19    Board determines that the cause for suspension has been
20    abated. The Board may revoke the owners license upon a
21    determination that the owner has not made satisfactory
22    progress toward abating the hazard.
23        (12) To eject or exclude or authorize the ejection or
24    exclusion of, any person from riverboat gambling
25    facilities where such person is in violation of this Act,
26    rules and regulations thereunder, or final orders of the

 

 

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1    Board, or where such person's conduct or reputation is such
2    that his presence within the riverboat gambling facilities
3    may, in the opinion of the Board, call into question the
4    honesty and integrity of the gambling operations or
5    interfere with orderly conduct thereof; provided that the
6    propriety of such ejection or exclusion is subject to
7    subsequent hearing by the Board.
8        (13) To require all licensees of gambling operations to
9    utilize a cashless wagering system whereby all players'
10    money is converted to tokens, electronic cards, or chips
11    which shall be used only for wagering in the gambling
12    establishment.
13        (14) (Blank).
14        (15) To suspend, revoke or restrict licenses, to
15    require the removal of a licensee or an employee of a
16    licensee for a violation of this Act or a Board rule or for
17    engaging in a fraudulent practice, and to impose civil
18    penalties of up to $5,000 against individuals and up to
19    $10,000 or an amount equal to the daily gross receipts,
20    whichever is larger, against licensees for each violation
21    of any provision of the Act, any rules adopted by the
22    Board, any order of the Board or any other action which, in
23    the Board's discretion, is a detriment or impediment to
24    riverboat gambling operations.
25        (16) To hire employees to gather information, conduct
26    investigations and carry out any other tasks contemplated

 

 

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1    under this Act.
2        (17) To establish minimum levels of insurance to be
3    maintained by licensees.
4        (18) To authorize a licensee to sell or serve alcoholic
5    liquors, wine or beer as defined in the Liquor Control Act
6    of 1934 on board a riverboat and to have exclusive
7    authority to establish the hours for sale and consumption
8    of alcoholic liquor on board a riverboat, notwithstanding
9    any provision of the Liquor Control Act of 1934 or any
10    local ordinance, and regardless of whether the riverboat
11    makes excursions. The establishment of the hours for sale
12    and consumption of alcoholic liquor on board a riverboat is
13    an exclusive power and function of the State. A home rule
14    unit may not establish the hours for sale and consumption
15    of alcoholic liquor on board a riverboat. This amendatory
16    Act of 1991 is a denial and limitation of home rule powers
17    and functions under subsection (h) of Section 6 of Article
18    VII of the Illinois Constitution.
19        (19) After consultation with the U.S. Army Corps of
20    Engineers, to establish binding emergency orders upon the
21    concurrence of a majority of the members of the Board
22    regarding the navigability of water, relative to
23    excursions, in the event of extreme weather conditions,
24    acts of God or other extreme circumstances.
25        (20) To delegate the execution of any of its powers
26    under this Act for the purpose of administering and

 

 

HB4300- 339 -LRB099 14379 HLH 38474 b

1    enforcing this Act and its rules and regulations hereunder.
2        (20.5) To approve any contract entered into on its
3    behalf.
4        (20.6) To appoint investigators to conduct
5    investigations, searches, seizures, arrests, and other
6    duties imposed under this Act, as deemed necessary by the
7    Board. These investigators have and may exercise all of the
8    rights and powers of peace officers, provided that these
9    powers shall be limited to offenses or violations occurring
10    or committed on a riverboat or dock, as defined in
11    subsections (d) and (f) of Section 4, or as otherwise
12    provided by this Act or any other law.
13        (20.7) To contract with the Department of State Police
14    for the use of trained and qualified State police officers
15    and with the Department of Revenue for the use of trained
16    and qualified Department of Revenue investigators to
17    conduct investigations, searches, seizures, arrests, and
18    other duties imposed under this Act and to exercise all of
19    the rights and powers of peace officers, provided that the
20    powers of Department of Revenue investigators under this
21    subdivision (20.7) shall be limited to offenses or
22    violations occurring or committed on a riverboat or dock,
23    as defined in subsections (d) and (f) of Section 4, or as
24    otherwise provided by this Act or any other law. In the
25    event the Department of State Police or the Department of
26    Revenue is unable to fill contracted police or

 

 

HB4300- 340 -LRB099 14379 HLH 38474 b

1    investigative positions, the Board may appoint
2    investigators to fill those positions pursuant to
3    subdivision (20.6).
4        (21) To take any other action as may be reasonable or
5    appropriate to enforce this Act and rules and regulations
6    hereunder.
7    (d) The Board may seek and shall receive the cooperation of
8the Department of State Police in conducting background
9investigations of applicants and in fulfilling its
10responsibilities under this Section. Costs incurred by the
11Department of State Police as a result of such cooperation
12shall be paid by the Board in conformance with the requirements
13of Section 2605-400 of the Department of State Police Law (20
14ILCS 2605/2605-400).
15    (e) The Board must authorize to each investigator and to
16any other employee of the Board exercising the powers of a
17peace officer a distinct badge that, on its face, (i) clearly
18states that the badge is authorized by the Board and (ii)
19contains a unique identifying number. No other badge shall be
20authorized by the Board.
21(Source: P.A. 98-377, eff. 1-1-14; 98-582, eff. 8-27-13.)
 
22    Section 25-125. The Workers' Compensation Act is amended by
23changing Sections 8.3, 13.1, and 14.1 as follows:
 
24    (820 ILCS 305/8.3)

 

 

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1    Sec. 8.3. Workers' Compensation Medical Fee Advisory
2Board. There is created a Workers' Compensation Medical Fee
3Advisory Board consisting of 9 members appointed by the
4Governor with the advice and consent of the Senate. Three
5members of the Advisory Board shall be representative citizens
6chosen from the employee class, 3 members shall be
7representative citizens chosen from the employing class, and 3
8members shall be representative citizens chosen from the
9medical provider class. Each member shall serve a 4-year term
10and shall continue to serve until a successor is appointed. A
11vacancy on the Advisory Board shall be filled by the Governor
12for the unexpired term.
13    Members of the Advisory Board shall receive no compensation
14for their services but shall, until July 1, 2016, be reimbursed
15for expenses incurred in the performance of their duties by the
16Commission from appropriations made to the Commission for that
17purpose.
18    The Advisory Board shall advise the Commission on
19establishment of fees for medical services and accessibility of
20medical treatment.
21(Source: P.A. 94-277, eff. 7-20-05.)
 
22    (820 ILCS 305/13.1)  (from Ch. 48, par. 138.13-1)
23    Sec. 13.1. (a) There is created a Workers' Compensation
24Advisory Board hereinafter referred to as the Advisory Board.
25After the effective date of this amendatory Act of the 94th

 

 

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1General Assembly, the Advisory Board shall consist of 12
2members appointed by the Governor with the advice and consent
3of the Senate. Six members of the Advisory Board shall be
4representative citizens chosen from the employee class, and 6
5members shall be representative citizens chosen from the
6employing class. The Chairman of the Commission shall serve as
7the ex officio Chairman of the Advisory Board. After the
8effective date of this amendatory Act of the 94th General
9Assembly, each member of the Advisory Board shall serve a term
10ending on the third Monday in January 2007 and shall continue
11to serve until his or her successor is appointed and qualified.
12Members of the Advisory Board shall thereafter be appointed for
134 year terms from the third Monday in January of the year of
14their appointment, and until their successors are appointed and
15qualified. Seven members of the Advisory Board shall constitute
16a quorum to do business, but in no case shall there be less
17than one representative from each class. A vacancy on the
18Advisory Board shall be filled by the Governor for the
19unexpired term.
20    (b) Members of the Advisory Board shall receive no
21compensation for their services but shall, until July 1, 2016,
22be reimbursed for expenses incurred in the performance of their
23duties by the Commission from appropriations made to the
24Commission for such purpose.
25    (c) The Advisory Board shall aid the Commission in
26formulating policies, discussing problems, setting priorities

 

 

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1of expenditures, reviewing advisory rates filed by an advisory
2organization as defined in Section 463 of the Illinois
3Insurance Code, and establishing short and long range
4administrative goals. Prior to making the (1) initial set of
5arbitrator appointments pursuant to this amendatory Act of the
697th General Assembly and (2) appointment of Commissioners, the
7Governor shall request that the Advisory Board make
8recommendations as to candidates to consider for appointment
9and the Advisory Board may then make such recommendations.
10    (d) The terms of all Advisory Board members serving on the
11effective date of this amendatory Act of the 97th General
12Assembly are terminated. The Governor shall appoint new members
13to the Advisory Board within 30 days after the effective date
14of the amendatory Act of the 97th General Assembly, subject to
15the advice and consent of the Senate.
16(Source: P.A. 97-18, eff. 6-28-11.)
 
17    (820 ILCS 305/14.1)  (from Ch. 48, par. 138.14-1)
18    Sec. 14.1. There is created a Commission Review Board
19consisting of the Chairman of the Illinois Workers'
20Compensation Commission, the Commissioner with the most
21seniority who is a representative citizen of the class of
22employees covered under this Act, the Commissioner with the
23most seniority who is a representative citizen of the employing
24class operating under this Act, two Arbitrators, one assigned
25to hear cases filed in counties with a population of 3,000,000

 

 

HB4300- 344 -LRB099 14379 HLH 38474 b

1or more and one assigned to hear cases in any other county,
2both selected by a vote of a majority of the appointed
3Arbitrators pursuant to an election conducted by the Chairman,
4and 2 members designated by the Governor who are not
5commissioners, Arbitrators or employees of the Illinois
6Workers' Compensation Commission. Members of the Board shall
7serve without compensation, but shall, until July 1, 2016, be
8reimbursed for actual expenses incurred. All appointments for
9the initial terms shall be made and elections concluded by
10October 1, 1984, with each initial term commencing on October
111, 1984 and extending through February 28, 1987, until the
12office holder's successor is appointed or elected and
13qualified. Thereafter each term shall commence on March 1 of
14each odd-numbered year and extend through March 1 of the next
15succeeding odd-numbered year, until the office holder's
16successor is appointed or elected and qualified. The Governor
17shall certify his appointments, and the Chairman shall certify
18the results of the elections by the Arbitrators, to the
19Secretary of the Illinois Workers' Compensation Commission. A
20vacancy in the office of a member of the Commission Review
21Board shall be filled for the remainder of the vacating
22member's term in the same manner as that in which the member
23was appointed or elected.
24    The Chairman of the Illinois Workers' Compensation
25Commission shall serve as the Chairman of the Commission Review
26Board. It shall be the duty of the Chairman to compile, audit,

 

 

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1and retain complaints registered against Commissioners and
2Arbitrators. The Chairman shall immediately advise a
3Commissioner or Arbitrator in writing of the nature of any and
4all complaints filed against him, preserving the identity of
5the complainant.
6    At a proceeding before the Commission Review Board, it
7shall then become the duty of any complainant to testify
8regarding his or her previously filed complaint, or said
9complaint shall be considered null and void.
10    The Commission Review Board shall advise any Commissioner
11or Arbitrator in writing of necessary remedial action to
12correct any deficiency and shall afford said individual the
13opportunity to report or respond to a complaint within a
14prescribed period of time.
15    In matters of serious concern to the State, the Commission
16Review Board may recommend that the Governor: 1) dismiss any
17Arbitrator who is found unfit to serve; or 2) not reappoint a
18Commissioner who it finds unfit to serve. This action shall
19require a record vote of at least 5 members of the Board. The
20Governor, in his discretion, may act on the recommendation of
21the Commission Review Board.
22(Source: P.A. 93-721, eff. 1-1-05.)
 
23
ARTICLE 30. USE AND OCCUPATION TAXES; RAIL CARRIER

 
24    Section 30-5. The Use Tax Act is amended by changing

 

 

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1Section 3-55 as follows:
 
2    (35 ILCS 105/3-55)  (from Ch. 120, par. 439.3-55)
3    Sec. 3-55. Multistate exemption. To prevent actual or
4likely multistate taxation, the tax imposed by this Act does
5not apply to the use of tangible personal property in this
6State under the following circumstances:
7    (a) The use, in this State, of tangible personal property
8acquired outside this State by a nonresident individual and
9brought into this State by the individual for his or her own
10use while temporarily within this State or while passing
11through this State.
12    (b) The use, in this State, of tangible personal property
13by an interstate carrier for hire as rolling stock moving in
14interstate commerce or by lessors under a lease of one year or
15longer executed or in effect at the time of purchase of
16tangible personal property by interstate carriers for-hire for
17use as rolling stock moving in interstate commerce as long as
18so used by the interstate carriers for-hire, and equipment
19operated by a telecommunications provider, licensed as a common
20carrier by the Federal Communications Commission, which is
21permanently installed in or affixed to aircraft moving in
22interstate commerce.
23    (c) The use, in this State, by owners, lessors, or shippers
24of tangible personal property that is utilized by interstate
25carriers for hire for use as rolling stock moving in interstate

 

 

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1commerce as long as so used by the interstate carriers for
2hire, and equipment operated by a telecommunications provider,
3licensed as a common carrier by the Federal Communications
4Commission, which is permanently installed in or affixed to
5aircraft moving in interstate commerce.
6    (d) The use, in this State, of tangible personal property
7that is acquired outside this State and caused to be brought
8into this State by a person who has already paid a tax in
9another State in respect to the sale, purchase, or use of that
10property, to the extent of the amount of the tax properly due
11and paid in the other State.
12    (e) The temporary storage, in this State, of tangible
13personal property that is acquired outside this State and that,
14after being brought into this State and stored here
15temporarily, is used solely outside this State or is physically
16attached to or incorporated into other tangible personal
17property that is used solely outside this State, or is altered
18by converting, fabricating, manufacturing, printing,
19processing, or shaping, and, as altered, is used solely outside
20this State.
21    (f) The temporary storage in this State of building
22materials and fixtures that are acquired either in this State
23or outside this State by an Illinois registered combination
24retailer and construction contractor, and that the purchaser
25thereafter uses outside this State by incorporating that
26property into real estate located outside this State.

 

 

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1    (g) Through June 30, 2016, the The use or purchase of
2tangible personal property by a common carrier by rail or motor
3that receives the physical possession of the property in
4Illinois, and that transports the property, or shares with
5another common carrier in the transportation of the property,
6out of Illinois on a standard uniform bill of lading showing
7the seller of the property as the shipper or consignor of the
8property to a destination outside Illinois, for use outside
9Illinois.
10    (h) Except as provided in subsection (h-1), the use, in
11this State, of a motor vehicle that was sold in this State to a
12nonresident, even though the motor vehicle is delivered to the
13nonresident in this State, if the motor vehicle is not to be
14titled in this State, and if a drive-away permit is issued to
15the motor vehicle as provided in Section 3-603 of the Illinois
16Vehicle Code or if the nonresident purchaser has vehicle
17registration plates to transfer to the motor vehicle upon
18returning to his or her home state. The issuance of the
19drive-away permit or having the out-of-state registration
20plates to be transferred shall be prima facie evidence that the
21motor vehicle will not be titled in this State.
22    (h-1) The exemption under subsection (h) does not apply if
23the state in which the motor vehicle will be titled does not
24allow a reciprocal exemption for the use in that state of a
25motor vehicle sold and delivered in that state to an Illinois
26resident but titled in Illinois. The tax collected under this

 

 

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1Act on the sale of a motor vehicle in this State to a resident
2of another state that does not allow a reciprocal exemption
3shall be imposed at a rate equal to the state's rate of tax on
4taxable property in the state in which the purchaser is a
5resident, except that the tax shall not exceed the tax that
6would otherwise be imposed under this Act. At the time of the
7sale, the purchaser shall execute a statement, signed under
8penalty of perjury, of his or her intent to title the vehicle
9in the state in which the purchaser is a resident within 30
10days after the sale and of the fact of the payment to the State
11of Illinois of tax in an amount equivalent to the state's rate
12of tax on taxable property in his or her state of residence and
13shall submit the statement to the appropriate tax collection
14agency in his or her state of residence. In addition, the
15retailer must retain a signed copy of the statement in his or
16her records. Nothing in this subsection shall be construed to
17require the removal of the vehicle from this state following
18the filing of an intent to title the vehicle in the purchaser's
19state of residence if the purchaser titles the vehicle in his
20or her state of residence within 30 days after the date of
21sale. The tax collected under this Act in accordance with this
22subsection (h-1) shall be proportionately distributed as if the
23tax were collected at the 6.25% general rate imposed under this
24Act.
25    (h-2) The following exemptions apply with respect to
26certain aircraft:

 

 

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1        (1) Beginning on July 1, 2007, no tax is imposed under
2    this Act on the purchase of an aircraft, as defined in
3    Section 3 of the Illinois Aeronautics Act, if all of the
4    following conditions are met:
5            (A) the aircraft leaves this State within 15 days
6        after the later of either the issuance of the final
7        billing for the purchase of the aircraft or the
8        authorized approval for return to service, completion
9        of the maintenance record entry, and completion of the
10        test flight and ground test for inspection, as required
11        by 14 C.F.R. 91.407;
12            (B) the aircraft is not based or registered in this
13        State after the purchase of the aircraft; and
14            (C) the purchaser provides the Department with a
15        signed and dated certification, on a form prescribed by
16        the Department, certifying that the requirements of
17        this item (1) are met. The certificate must also
18        include the name and address of the purchaser, the
19        address of the location where the aircraft is to be
20        titled or registered, the address of the primary
21        physical location of the aircraft, and other
22        information that the Department may reasonably
23        require.
24        (2) Beginning on July 1, 2007, no tax is imposed under
25    this Act on the use of an aircraft, as defined in Section 3
26    of the Illinois Aeronautics Act, that is temporarily

 

 

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1    located in this State for the purpose of a prepurchase
2    evaluation if all of the following conditions are met:
3            (A) the aircraft is not based or registered in this
4        State after the prepurchase evaluation; and
5            (B) the purchaser provides the Department with a
6        signed and dated certification, on a form prescribed by
7        the Department, certifying that the requirements of
8        this item (2) are met. The certificate must also
9        include the name and address of the purchaser, the
10        address of the location where the aircraft is to be
11        titled or registered, the address of the primary
12        physical location of the aircraft, and other
13        information that the Department may reasonably
14        require.
15        (3) Beginning on July 1, 2007, no tax is imposed under
16    this Act on the use of an aircraft, as defined in Section 3
17    of the Illinois Aeronautics Act, that is temporarily
18    located in this State for the purpose of a post-sale
19    customization if all of the following conditions are met:
20            (A) the aircraft leaves this State within 15 days
21        after the authorized approval for return to service,
22        completion of the maintenance record entry, and
23        completion of the test flight and ground test for
24        inspection, as required by 14 C.F.R. 91.407;
25            (B) the aircraft is not based or registered in this
26        State either before or after the post-sale

 

 

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1        customization; and
2            (C) the purchaser provides the Department with a
3        signed and dated certification, on a form prescribed by
4        the Department, certifying that the requirements of
5        this item (3) are met. The certificate must also
6        include the name and address of the purchaser, the
7        address of the location where the aircraft is to be
8        titled or registered, the address of the primary
9        physical location of the aircraft, and other
10        information that the Department may reasonably
11        require.
12    If tax becomes due under this subsection (h-2) because of
13the purchaser's use of the aircraft in this State, the
14purchaser shall file a return with the Department and pay the
15tax on the fair market value of the aircraft. This return and
16payment of the tax must be made no later than 30 days after the
17aircraft is used in a taxable manner in this State. The tax is
18based on the fair market value of the aircraft on the date that
19it is first used in a taxable manner in this State.
20    For purposes of this subsection (h-2):
21    "Based in this State" means hangared, stored, or otherwise
22used, excluding post-sale customizations as defined in this
23Section, for 10 or more days in each 12-month period
24immediately following the date of the sale of the aircraft.
25    "Post-sale customization" means any improvement,
26maintenance, or repair that is performed on an aircraft

 

 

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1following a transfer of ownership of the aircraft.
2    "Prepurchase evaluation" means an examination of an
3aircraft to provide a potential purchaser with information
4relevant to the potential purchase.
5    "Registered in this State" means an aircraft registered
6with the Department of Transportation, Aeronautics Division,
7or titled or registered with the Federal Aviation
8Administration to an address located in this State.
9    This subsection (h-2) is exempt from the provisions of
10Section 3-90.
11    (i) Beginning July 1, 1999, the use, in this State, of fuel
12acquired outside this State and brought into this State in the
13fuel supply tanks of locomotives engaged in freight hauling and
14passenger service for interstate commerce. This subsection is
15exempt from the provisions of Section 3-90.
16    (j) Beginning on January 1, 2002 and through June 30, 2016,
17the use of tangible personal property purchased from an
18Illinois retailer by a taxpayer engaged in centralized
19purchasing activities in Illinois who will, upon receipt of the
20property in Illinois, temporarily store the property in
21Illinois (i) for the purpose of subsequently transporting it
22outside this State for use or consumption thereafter solely
23outside this State or (ii) for the purpose of being processed,
24fabricated, or manufactured into, attached to, or incorporated
25into other tangible personal property to be transported outside
26this State and thereafter used or consumed solely outside this

 

 

HB4300- 354 -LRB099 14379 HLH 38474 b

1State. The Director of Revenue shall, pursuant to rules adopted
2in accordance with the Illinois Administrative Procedure Act,
3issue a permit to any taxpayer in good standing with the
4Department who is eligible for the exemption under this
5subsection (j). The permit issued under this subsection (j)
6shall authorize the holder, to the extent and in the manner
7specified in the rules adopted under this Act, to purchase
8tangible personal property from a retailer exempt from the
9taxes imposed by this Act. Taxpayers shall maintain all
10necessary books and records to substantiate the use and
11consumption of all such tangible personal property outside of
12the State of Illinois.
13(Source: P.A. 97-73, eff. 6-30-11.)
 
14    Section 30-10. The Service Use Tax Act is amended by
15changing Section 2 as follows:
 
16    (35 ILCS 110/2)  (from Ch. 120, par. 439.32)
17    Sec. 2. Definitions.
18    "Use" means the exercise by any person of any right or
19power over tangible personal property incident to the ownership
20of that property, but does not include the sale or use for
21demonstration by him of that property in any form as tangible
22personal property in the regular course of business. "Use" does
23not mean the interim use of tangible personal property nor the
24physical incorporation of tangible personal property, as an

 

 

HB4300- 355 -LRB099 14379 HLH 38474 b

1ingredient or constituent, into other tangible personal
2property, (a) which is sold in the regular course of business
3or (b) which the person incorporating such ingredient or
4constituent therein has undertaken at the time of such purchase
5to cause to be transported in interstate commerce to
6destinations outside the State of Illinois.
7    "Purchased from a serviceman" means the acquisition of the
8ownership of, or title to, tangible personal property through a
9sale of service.
10    "Purchaser" means any person who, through a sale of
11service, acquires the ownership of, or title to, any tangible
12personal property.
13    "Cost price" means the consideration paid by the serviceman
14for a purchase valued in money, whether paid in money or
15otherwise, including cash, credits and services, and shall be
16determined without any deduction on account of the supplier's
17cost of the property sold or on account of any other expense
18incurred by the supplier. When a serviceman contracts out part
19or all of the services required in his sale of service, it
20shall be presumed that the cost price to the serviceman of the
21property transferred to him or her by his or her subcontractor
22is equal to 50% of the subcontractor's charges to the
23serviceman in the absence of proof of the consideration paid by
24the subcontractor for the purchase of such property.
25    "Selling price" means the consideration for a sale valued
26in money whether received in money or otherwise, including

 

 

HB4300- 356 -LRB099 14379 HLH 38474 b

1cash, credits and service, and shall be determined without any
2deduction on account of the serviceman's cost of the property
3sold, the cost of materials used, labor or service cost or any
4other expense whatsoever, but does not include interest or
5finance charges which appear as separate items on the bill of
6sale or sales contract nor charges that are added to prices by
7sellers on account of the seller's duty to collect, from the
8purchaser, the tax that is imposed by this Act.
9    "Department" means the Department of Revenue.
10    "Person" means any natural individual, firm, partnership,
11association, joint stock company, joint venture, public or
12private corporation, limited liability company, and any
13receiver, executor, trustee, guardian or other representative
14appointed by order of any court.
15    "Sale of service" means any transaction except:
16        (1) a retail sale of tangible personal property taxable
17    under the Retailers' Occupation Tax Act or under the Use
18    Tax Act.
19        (2) a sale of tangible personal property for the
20    purpose of resale made in compliance with Section 2c of the
21    Retailers' Occupation Tax Act.
22        (3) except as hereinafter provided, a sale or transfer
23    of tangible personal property as an incident to the
24    rendering of service for or by any governmental body, or
25    for or by any corporation, society, association,
26    foundation or institution organized and operated

 

 

HB4300- 357 -LRB099 14379 HLH 38474 b

1    exclusively for charitable, religious or educational
2    purposes or any not-for-profit corporation, society,
3    association, foundation, institution or organization which
4    has no compensated officers or employees and which is
5    organized and operated primarily for the recreation of
6    persons 55 years of age or older. A limited liability
7    company may qualify for the exemption under this paragraph
8    only if the limited liability company is organized and
9    operated exclusively for educational purposes.
10        (4) a sale or transfer of tangible personal property as
11    an incident to the rendering of service for interstate
12    carriers for hire for use as rolling stock moving in
13    interstate commerce or by lessors under a lease of one year
14    or longer, executed or in effect at the time of purchase of
15    personal property, to interstate carriers for hire for use
16    as rolling stock moving in interstate commerce so long as
17    so used by such interstate carriers for hire, and equipment
18    operated by a telecommunications provider, licensed as a
19    common carrier by the Federal Communications Commission,
20    which is permanently installed in or affixed to aircraft
21    moving in interstate commerce.
22        (4a) a sale or transfer of tangible personal property
23    as an incident to the rendering of service for owners,
24    lessors, or shippers of tangible personal property which is
25    utilized by interstate carriers for hire for use as rolling
26    stock moving in interstate commerce so long as so used by

 

 

HB4300- 358 -LRB099 14379 HLH 38474 b

1    interstate carriers for hire, and equipment operated by a
2    telecommunications provider, licensed as a common carrier
3    by the Federal Communications Commission, which is
4    permanently installed in or affixed to aircraft moving in
5    interstate commerce.
6        (4a-5) on and after July 1, 2003 and through June 30,
7    2004, a sale or transfer of a motor vehicle of the second
8    division with a gross vehicle weight in excess of 8,000
9    pounds as an incident to the rendering of service if that
10    motor vehicle is subject to the commercial distribution fee
11    imposed under Section 3-815.1 of the Illinois Vehicle Code.
12    Beginning on July 1, 2004 and through June 30, 2005, the
13    use in this State of motor vehicles of the second division:
14    (i) with a gross vehicle weight rating in excess of 8,000
15    pounds; (ii) that are subject to the commercial
16    distribution fee imposed under Section 3-815.1 of the
17    Illinois Vehicle Code; and (iii) that are primarily used
18    for commercial purposes. Through June 30, 2005, this
19    exemption applies to repair and replacement parts added
20    after the initial purchase of such a motor vehicle if that
21    motor vehicle is used in a manner that would qualify for
22    the rolling stock exemption otherwise provided for in this
23    Act. For purposes of this paragraph, "used for commercial
24    purposes" means the transportation of persons or property
25    in furtherance of any commercial or industrial enterprise
26    whether for-hire or not.

 

 

HB4300- 359 -LRB099 14379 HLH 38474 b

1        (5) a sale or transfer of machinery and equipment used
2    primarily in the process of the manufacturing or
3    assembling, either in an existing, an expanded or a new
4    manufacturing facility, of tangible personal property for
5    wholesale or retail sale or lease, whether such sale or
6    lease is made directly by the manufacturer or by some other
7    person, whether the materials used in the process are owned
8    by the manufacturer or some other person, or whether such
9    sale or lease is made apart from or as an incident to the
10    seller's engaging in a service occupation and the
11    applicable tax is a Service Use Tax or Service Occupation
12    Tax, rather than Use Tax or Retailers' Occupation Tax. The
13    exemption provided by this paragraph (5) does not include
14    machinery and equipment used in (i) the generation of
15    electricity for wholesale or retail sale; (ii) the
16    generation or treatment of natural or artificial gas for
17    wholesale or retail sale that is delivered to customers
18    through pipes, pipelines, or mains; or (iii) the treatment
19    of water for wholesale or retail sale that is delivered to
20    customers through pipes, pipelines, or mains. The
21    provisions of this amendatory Act of the 98th General
22    Assembly are declaratory of existing law as to the meaning
23    and scope of this exemption.
24        (5a) through June 30, 2016, the repairing,
25    reconditioning or remodeling, for a common carrier by rail,
26    of tangible personal property which belongs to such carrier

 

 

HB4300- 360 -LRB099 14379 HLH 38474 b

1    for hire, and as to which such carrier receives the
2    physical possession of the repaired, reconditioned or
3    remodeled item of tangible personal property in Illinois,
4    and which such carrier transports, or shares with another
5    common carrier in the transportation of such property, out
6    of Illinois on a standard uniform bill of lading showing
7    the person who repaired, reconditioned or remodeled the
8    property to a destination outside Illinois, for use outside
9    Illinois.
10        (5b) through June 30, 2016, a sale or transfer of
11    tangible personal property which is produced by the seller
12    thereof on special order in such a way as to have made the
13    applicable tax the Service Occupation Tax or the Service
14    Use Tax, rather than the Retailers' Occupation Tax or the
15    Use Tax, for an interstate carrier by rail which receives
16    the physical possession of such property in Illinois, and
17    which transports such property, or shares with another
18    common carrier in the transportation of such property, out
19    of Illinois on a standard uniform bill of lading showing
20    the seller of the property as the shipper or consignor of
21    such property to a destination outside Illinois, for use
22    outside Illinois.
23        (6) until July 1, 2003, a sale or transfer of
24    distillation machinery and equipment, sold as a unit or kit
25    and assembled or installed by the retailer, which machinery
26    and equipment is certified by the user to be used only for

 

 

HB4300- 361 -LRB099 14379 HLH 38474 b

1    the production of ethyl alcohol that will be used for
2    consumption as motor fuel or as a component of motor fuel
3    for the personal use of such user and not subject to sale
4    or resale.
5        (7) at the election of any serviceman not required to
6    be otherwise registered as a retailer under Section 2a of
7    the Retailers' Occupation Tax Act, made for each fiscal
8    year sales of service in which the aggregate annual cost
9    price of tangible personal property transferred as an
10    incident to the sales of service is less than 35%, or 75%
11    in the case of servicemen transferring prescription drugs
12    or servicemen engaged in graphic arts production, of the
13    aggregate annual total gross receipts from all sales of
14    service. The purchase of such tangible personal property by
15    the serviceman shall be subject to tax under the Retailers'
16    Occupation Tax Act and the Use Tax Act. However, if a
17    primary serviceman who has made the election described in
18    this paragraph subcontracts service work to a secondary
19    serviceman who has also made the election described in this
20    paragraph, the primary serviceman does not incur a Use Tax
21    liability if the secondary serviceman (i) has paid or will
22    pay Use Tax on his or her cost price of any tangible
23    personal property transferred to the primary serviceman
24    and (ii) certifies that fact in writing to the primary
25    serviceman.
26    Tangible personal property transferred incident to the

 

 

HB4300- 362 -LRB099 14379 HLH 38474 b

1completion of a maintenance agreement is exempt from the tax
2imposed pursuant to this Act.
3    Exemption (5) also includes machinery and equipment used in
4the general maintenance or repair of such exempt machinery and
5equipment or for in-house manufacture of exempt machinery and
6equipment. The machinery and equipment exemption does not
7include machinery and equipment used in (i) the generation of
8electricity for wholesale or retail sale; (ii) the generation
9or treatment of natural or artificial gas for wholesale or
10retail sale that is delivered to customers through pipes,
11pipelines, or mains; or (iii) the treatment of water for
12wholesale or retail sale that is delivered to customers through
13pipes, pipelines, or mains. The provisions of this amendatory
14Act of the 98th General Assembly are declaratory of existing
15law as to the meaning and scope of this exemption. For the
16purposes of exemption (5), each of these terms shall have the
17following meanings: (1) "manufacturing process" shall mean the
18production of any article of tangible personal property,
19whether such article is a finished product or an article for
20use in the process of manufacturing or assembling a different
21article of tangible personal property, by procedures commonly
22regarded as manufacturing, processing, fabricating, or
23refining which changes some existing material or materials into
24a material with a different form, use or name. In relation to a
25recognized integrated business composed of a series of
26operations which collectively constitute manufacturing, or

 

 

HB4300- 363 -LRB099 14379 HLH 38474 b

1individually constitute manufacturing operations, the
2manufacturing process shall be deemed to commence with the
3first operation or stage of production in the series, and shall
4not be deemed to end until the completion of the final product
5in the last operation or stage of production in the series; and
6further, for purposes of exemption (5), photoprocessing is
7deemed to be a manufacturing process of tangible personal
8property for wholesale or retail sale; (2) "assembling process"
9shall mean the production of any article of tangible personal
10property, whether such article is a finished product or an
11article for use in the process of manufacturing or assembling a
12different article of tangible personal property, by the
13combination of existing materials in a manner commonly regarded
14as assembling which results in a material of a different form,
15use or name; (3) "machinery" shall mean major mechanical
16machines or major components of such machines contributing to a
17manufacturing or assembling process; and (4) "equipment" shall
18include any independent device or tool separate from any
19machinery but essential to an integrated manufacturing or
20assembly process; including computers used primarily in a
21manufacturer's computer assisted design, computer assisted
22manufacturing (CAD/CAM) system; or any subunit or assembly
23comprising a component of any machinery or auxiliary, adjunct
24or attachment parts of machinery, such as tools, dies, jigs,
25fixtures, patterns and molds; or any parts which require
26periodic replacement in the course of normal operation; but

 

 

HB4300- 364 -LRB099 14379 HLH 38474 b

1shall not include hand tools. Equipment includes chemicals or
2chemicals acting as catalysts but only if the chemicals or
3chemicals acting as catalysts effect a direct and immediate
4change upon a product being manufactured or assembled for
5wholesale or retail sale or lease. The purchaser of such
6machinery and equipment who has an active resale registration
7number shall furnish such number to the seller at the time of
8purchase. The user of such machinery and equipment and tools
9without an active resale registration number shall prepare a
10certificate of exemption for each transaction stating facts
11establishing the exemption for that transaction, which
12certificate shall be available to the Department for inspection
13or audit. The Department shall prescribe the form of the
14certificate.
15    Any informal rulings, opinions or letters issued by the
16Department in response to an inquiry or request for any opinion
17from any person regarding the coverage and applicability of
18exemption (5) to specific devices shall be published,
19maintained as a public record, and made available for public
20inspection and copying. If the informal ruling, opinion or
21letter contains trade secrets or other confidential
22information, where possible the Department shall delete such
23information prior to publication. Whenever such informal
24rulings, opinions, or letters contain any policy of general
25applicability, the Department shall formulate and adopt such
26policy as a rule in accordance with the provisions of the

 

 

HB4300- 365 -LRB099 14379 HLH 38474 b

1Illinois Administrative Procedure Act.
2    On and after July 1, 1987, no entity otherwise eligible
3under exemption (3) of this Section shall make tax free
4purchases unless it has an active exemption identification
5number issued by the Department.
6    The purchase, employment and transfer of such tangible
7personal property as newsprint and ink for the primary purpose
8of conveying news (with or without other information) is not a
9purchase, use or sale of service or of tangible personal
10property within the meaning of this Act.
11    "Serviceman" means any person who is engaged in the
12occupation of making sales of service.
13    "Sale at retail" means "sale at retail" as defined in the
14Retailers' Occupation Tax Act.
15    "Supplier" means any person who makes sales of tangible
16personal property to servicemen for the purpose of resale as an
17incident to a sale of service.
18    "Serviceman maintaining a place of business in this State",
19or any like term, means and includes any serviceman:
20        1. having or maintaining within this State, directly or
21    by a subsidiary, an office, distribution house, sales
22    house, warehouse or other place of business, or any agent
23    or other representative operating within this State under
24    the authority of the serviceman or its subsidiary,
25    irrespective of whether such place of business or agent or
26    other representative is located here permanently or

 

 

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1    temporarily, or whether such serviceman or subsidiary is
2    licensed to do business in this State;
3        1.1. having a contract with a person located in this
4    State under which the person, for a commission or other
5    consideration based on the sale of service by the
6    serviceman, directly or indirectly refers potential
7    customers to the serviceman by providing to the potential
8    customers a promotional code or other mechanism that allows
9    the serviceman to track purchases referred by such persons.
10    Examples of mechanisms that allow the serviceman to track
11    purchases referred by such persons include but are not
12    limited to the use of a link on the person's Internet
13    website, promotional codes distributed through the
14    person's hand-delivered or mailed material, and
15    promotional codes distributed by the person through radio
16    or other broadcast media. The provisions of this paragraph
17    1.1 shall apply only if the cumulative gross receipts from
18    sales of service by the serviceman to customers who are
19    referred to the serviceman by all persons in this State
20    under such contracts exceed $10,000 during the preceding 4
21    quarterly periods ending on the last day of March, June,
22    September, and December; a serviceman meeting the
23    requirements of this paragraph 1.1 shall be presumed to be
24    maintaining a place of business in this State but may rebut
25    this presumption by submitting proof that the referrals or
26    other activities pursued within this State by such persons

 

 

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1    were not sufficient to meet the nexus standards of the
2    United States Constitution during the preceding 4
3    quarterly periods;
4        1.2. beginning July 1, 2011, having a contract with a
5    person located in this State under which:
6            A. the serviceman sells the same or substantially
7        similar line of services as the person located in this
8        State and does so using an identical or substantially
9        similar name, trade name, or trademark as the person
10        located in this State; and
11            B. the serviceman provides a commission or other
12        consideration to the person located in this State based
13        upon the sale of services by the serviceman.
14    The provisions of this paragraph 1.2 shall apply only if
15    the cumulative gross receipts from sales of service by the
16    serviceman to customers in this State under all such
17    contracts exceed $10,000 during the preceding 4 quarterly
18    periods ending on the last day of March, June, September,
19    and December;
20        2. soliciting orders for tangible personal property by
21    means of a telecommunication or television shopping system
22    (which utilizes toll free numbers) which is intended by the
23    retailer to be broadcast by cable television or other means
24    of broadcasting, to consumers located in this State;
25        3. pursuant to a contract with a broadcaster or
26    publisher located in this State, soliciting orders for

 

 

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1    tangible personal property by means of advertising which is
2    disseminated primarily to consumers located in this State
3    and only secondarily to bordering jurisdictions;
4        4. soliciting orders for tangible personal property by
5    mail if the solicitations are substantial and recurring and
6    if the retailer benefits from any banking, financing, debt
7    collection, telecommunication, or marketing activities
8    occurring in this State or benefits from the location in
9    this State of authorized installation, servicing, or
10    repair facilities;
11        5. being owned or controlled by the same interests
12    which own or control any retailer engaging in business in
13    the same or similar line of business in this State;
14        6. having a franchisee or licensee operating under its
15    trade name if the franchisee or licensee is required to
16    collect the tax under this Section;
17        7. pursuant to a contract with a cable television
18    operator located in this State, soliciting orders for
19    tangible personal property by means of advertising which is
20    transmitted or distributed over a cable television system
21    in this State; or
22        8. engaging in activities in Illinois, which
23    activities in the state in which the supply business
24    engaging in such activities is located would constitute
25    maintaining a place of business in that state.
26(Source: P.A. 98-583, eff. 1-1-14; 98-1089, eff. 1-1-15.)
 

 

 

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1    Section 30-15. The Service Occupation Tax Act is amended by
2changing Section 2 as follows:
 
3    (35 ILCS 115/2)  (from Ch. 120, par. 439.102)
4    Sec. 2. "Transfer" means any transfer of the title to
5property or of the ownership of property whether or not the
6transferor retains title as security for the payment of amounts
7due him from the transferee.
8    "Cost Price" means the consideration paid by the serviceman
9for a purchase valued in money, whether paid in money or
10otherwise, including cash, credits and services, and shall be
11determined without any deduction on account of the supplier's
12cost of the property sold or on account of any other expense
13incurred by the supplier. When a serviceman contracts out part
14or all of the services required in his sale of service, it
15shall be presumed that the cost price to the serviceman of the
16property transferred to him by his or her subcontractor is
17equal to 50% of the subcontractor's charges to the serviceman
18in the absence of proof of the consideration paid by the
19subcontractor for the purchase of such property.
20    "Department" means the Department of Revenue.
21    "Person" means any natural individual, firm, partnership,
22association, joint stock company, joint venture, public or
23private corporation, limited liability company, and any
24receiver, executor, trustee, guardian or other representative

 

 

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1appointed by order of any court.
2    "Sale of Service" means any transaction except:
3    (a) A retail sale of tangible personal property taxable
4under the Retailers' Occupation Tax Act or under the Use Tax
5Act.
6    (b) A sale of tangible personal property for the purpose of
7resale made in compliance with Section 2c of the Retailers'
8Occupation Tax Act.
9    (c) Except as hereinafter provided, a sale or transfer of
10tangible personal property as an incident to the rendering of
11service for or by any governmental body or for or by any
12corporation, society, association, foundation or institution
13organized and operated exclusively for charitable, religious
14or educational purposes or any not-for-profit corporation,
15society, association, foundation, institution or organization
16which has no compensated officers or employees and which is
17organized and operated primarily for the recreation of persons
1855 years of age or older. A limited liability company may
19qualify for the exemption under this paragraph only if the
20limited liability company is organized and operated
21exclusively for educational purposes.
22    (d) A sale or transfer of tangible personal property as an
23incident to the rendering of service for interstate carriers
24for hire for use as rolling stock moving in interstate commerce
25or lessors under leases of one year or longer, executed or in
26effect at the time of purchase, to interstate carriers for hire

 

 

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1for use as rolling stock moving in interstate commerce, and
2equipment operated by a telecommunications provider, licensed
3as a common carrier by the Federal Communications Commission,
4which is permanently installed in or affixed to aircraft moving
5in interstate commerce.
6    (d-1) A sale or transfer of tangible personal property as
7an incident to the rendering of service for owners, lessors or
8shippers of tangible personal property which is utilized by
9interstate carriers for hire for use as rolling stock moving in
10interstate commerce, and equipment operated by a
11telecommunications provider, licensed as a common carrier by
12the Federal Communications Commission, which is permanently
13installed in or affixed to aircraft moving in interstate
14commerce.
15    (d-1.1) On and after July 1, 2003 and through June 30,
162004, a sale or transfer of a motor vehicle of the second
17division with a gross vehicle weight in excess of 8,000 pounds
18as an incident to the rendering of service if that motor
19vehicle is subject to the commercial distribution fee imposed
20under Section 3-815.1 of the Illinois Vehicle Code. Beginning
21on July 1, 2004 and through June 30, 2005, the use in this
22State of motor vehicles of the second division: (i) with a
23gross vehicle weight rating in excess of 8,000 pounds; (ii)
24that are subject to the commercial distribution fee imposed
25under Section 3-815.1 of the Illinois Vehicle Code; and (iii)
26that are primarily used for commercial purposes. Through June

 

 

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130, 2005, this exemption applies to repair and replacement
2parts added after the initial purchase of such a motor vehicle
3if that motor vehicle is used in a manner that would qualify
4for the rolling stock exemption otherwise provided for in this
5Act. For purposes of this paragraph, "used for commercial
6purposes" means the transportation of persons or property in
7furtherance of any commercial or industrial enterprise whether
8for-hire or not.
9    (d-2) Through June 30, 2016, the The repairing,
10reconditioning or remodeling, for a common carrier by rail, of
11tangible personal property which belongs to such carrier for
12hire, and as to which such carrier receives the physical
13possession of the repaired, reconditioned or remodeled item of
14tangible personal property in Illinois, and which such carrier
15transports, or shares with another common carrier in the
16transportation of such property, out of Illinois on a standard
17uniform bill of lading showing the person who repaired,
18reconditioned or remodeled the property as the shipper or
19consignor of such property to a destination outside Illinois,
20for use outside Illinois.
21    (d-3) Through June 30, 2016, a A sale or transfer of
22tangible personal property which is produced by the seller
23thereof on special order in such a way as to have made the
24applicable tax the Service Occupation Tax or the Service Use
25Tax, rather than the Retailers' Occupation Tax or the Use Tax,
26for an interstate carrier by rail which receives the physical

 

 

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1possession of such property in Illinois, and which transports
2such property, or shares with another common carrier in the
3transportation of such property, out of Illinois on a standard
4uniform bill of lading showing the seller of the property as
5the shipper or consignor of such property to a destination
6outside Illinois, for use outside Illinois.
7    (d-4) Until January 1, 1997, a sale, by a registered
8serviceman paying tax under this Act to the Department, of
9special order printed materials delivered outside Illinois and
10which are not returned to this State, if delivery is made by
11the seller or agent of the seller, including an agent who
12causes the product to be delivered outside Illinois by a common
13carrier or the U.S. postal service.
14    (e) A sale or transfer of machinery and equipment used
15primarily in the process of the manufacturing or assembling,
16either in an existing, an expanded or a new manufacturing
17facility, of tangible personal property for wholesale or retail
18sale or lease, whether such sale or lease is made directly by
19the manufacturer or by some other person, whether the materials
20used in the process are owned by the manufacturer or some other
21person, or whether such sale or lease is made apart from or as
22an incident to the seller's engaging in a service occupation
23and the applicable tax is a Service Occupation Tax or Service
24Use Tax, rather than Retailers' Occupation Tax or Use Tax. The
25exemption provided by this paragraph (e) does not include
26machinery and equipment used in (i) the generation of

 

 

HB4300- 374 -LRB099 14379 HLH 38474 b

1electricity for wholesale or retail sale; (ii) the generation
2or treatment of natural or artificial gas for wholesale or
3retail sale that is delivered to customers through pipes,
4pipelines, or mains; or (iii) the treatment of water for
5wholesale or retail sale that is delivered to customers through
6pipes, pipelines, or mains. The provisions of this amendatory
7Act of the 98th General Assembly are declaratory of existing
8law as to the meaning and scope of this exemption.
9    (f) Until July 1, 2003, the sale or transfer of
10distillation machinery and equipment, sold as a unit or kit and
11assembled or installed by the retailer, which machinery and
12equipment is certified by the user to be used only for the
13production of ethyl alcohol that will be used for consumption
14as motor fuel or as a component of motor fuel for the personal
15use of such user and not subject to sale or resale.
16    (g) At the election of any serviceman not required to be
17otherwise registered as a retailer under Section 2a of the
18Retailers' Occupation Tax Act, made for each fiscal year sales
19of service in which the aggregate annual cost price of tangible
20personal property transferred as an incident to the sales of
21service is less than 35% (75% in the case of servicemen
22transferring prescription drugs or servicemen engaged in
23graphic arts production) of the aggregate annual total gross
24receipts from all sales of service. The purchase of such
25tangible personal property by the serviceman shall be subject
26to tax under the Retailers' Occupation Tax Act and the Use Tax

 

 

HB4300- 375 -LRB099 14379 HLH 38474 b

1Act. However, if a primary serviceman who has made the election
2described in this paragraph subcontracts service work to a
3secondary serviceman who has also made the election described
4in this paragraph, the primary serviceman does not incur a Use
5Tax liability if the secondary serviceman (i) has paid or will
6pay Use Tax on his or her cost price of any tangible personal
7property transferred to the primary serviceman and (ii)
8certifies that fact in writing to the primary serviceman.
9    Tangible personal property transferred incident to the
10completion of a maintenance agreement is exempt from the tax
11imposed pursuant to this Act.
12    Exemption (e) also includes machinery and equipment used in
13the general maintenance or repair of such exempt machinery and
14equipment or for in-house manufacture of exempt machinery and
15equipment. The machinery and equipment exemption does not
16include machinery and equipment used in (i) the generation of
17electricity for wholesale or retail sale; (ii) the generation
18or treatment of natural or artificial gas for wholesale or
19retail sale that is delivered to customers through pipes,
20pipelines, or mains; or (iii) the treatment of water for
21wholesale or retail sale that is delivered to customers through
22pipes, pipelines, or mains. The provisions of this amendatory
23Act of the 98th General Assembly are declaratory of existing
24law as to the meaning and scope of this exemption. For the
25purposes of exemption (e), each of these terms shall have the
26following meanings: (1) "manufacturing process" shall mean the

 

 

HB4300- 376 -LRB099 14379 HLH 38474 b

1production of any article of tangible personal property,
2whether such article is a finished product or an article for
3use in the process of manufacturing or assembling a different
4article of tangible personal property, by procedures commonly
5regarded as manufacturing, processing, fabricating, or
6refining which changes some existing material or materials into
7a material with a different form, use or name. In relation to a
8recognized integrated business composed of a series of
9operations which collectively constitute manufacturing, or
10individually constitute manufacturing operations, the
11manufacturing process shall be deemed to commence with the
12first operation or stage of production in the series, and shall
13not be deemed to end until the completion of the final product
14in the last operation or stage of production in the series; and
15further for purposes of exemption (e), photoprocessing is
16deemed to be a manufacturing process of tangible personal
17property for wholesale or retail sale; (2) "assembling process"
18shall mean the production of any article of tangible personal
19property, whether such article is a finished product or an
20article for use in the process of manufacturing or assembling a
21different article of tangible personal property, by the
22combination of existing materials in a manner commonly regarded
23as assembling which results in a material of a different form,
24use or name; (3) "machinery" shall mean major mechanical
25machines or major components of such machines contributing to a
26manufacturing or assembling process; and (4) "equipment" shall

 

 

HB4300- 377 -LRB099 14379 HLH 38474 b

1include any independent device or tool separate from any
2machinery but essential to an integrated manufacturing or
3assembly process; including computers used primarily in a
4manufacturer's computer assisted design, computer assisted
5manufacturing (CAD/CAM) system; or any subunit or assembly
6comprising a component of any machinery or auxiliary, adjunct
7or attachment parts of machinery, such as tools, dies, jigs,
8fixtures, patterns and molds; or any parts which require
9periodic replacement in the course of normal operation; but
10shall not include hand tools. Equipment includes chemicals or
11chemicals acting as catalysts but only if the chemicals or
12chemicals acting as catalysts effect a direct and immediate
13change upon a product being manufactured or assembled for
14wholesale or retail sale or lease. The purchaser of such
15machinery and equipment who has an active resale registration
16number shall furnish such number to the seller at the time of
17purchase. The purchaser of such machinery and equipment and
18tools without an active resale registration number shall
19furnish to the seller a certificate of exemption for each
20transaction stating facts establishing the exemption for that
21transaction, which certificate shall be available to the
22Department for inspection or audit.
23    Except as provided in Section 2d of this Act, the rolling
24stock exemption applies to rolling stock used by an interstate
25carrier for hire, even just between points in Illinois, if such
26rolling stock transports, for hire, persons whose journeys or

 

 

HB4300- 378 -LRB099 14379 HLH 38474 b

1property whose shipments originate or terminate outside
2Illinois.
3    Any informal rulings, opinions or letters issued by the
4Department in response to an inquiry or request for any opinion
5from any person regarding the coverage and applicability of
6exemption (e) to specific devices shall be published,
7maintained as a public record, and made available for public
8inspection and copying. If the informal ruling, opinion or
9letter contains trade secrets or other confidential
10information, where possible the Department shall delete such
11information prior to publication. Whenever such informal
12rulings, opinions, or letters contain any policy of general
13applicability, the Department shall formulate and adopt such
14policy as a rule in accordance with the provisions of the
15Illinois Administrative Procedure Act.
16    On and after July 1, 1987, no entity otherwise eligible
17under exemption (c) of this Section shall make tax free
18purchases unless it has an active exemption identification
19number issued by the Department.
20    "Serviceman" means any person who is engaged in the
21occupation of making sales of service.
22    "Sale at Retail" means "sale at retail" as defined in the
23Retailers' Occupation Tax Act.
24    "Supplier" means any person who makes sales of tangible
25personal property to servicemen for the purpose of resale as an
26incident to a sale of service.

 

 

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1(Source: P.A. 98-583, eff. 1-1-14.)
 
2    Section 30-20. The Retailers' Occupation Tax Act is amended
3by changing Section 2-5 as follows:
 
4    (35 ILCS 120/2-5)
5    Sec. 2-5. Exemptions. Gross receipts from proceeds from the
6sale of the following tangible personal property are exempt
7from the tax imposed by this Act:
8    (1) Farm chemicals.
9    (2) Farm machinery and equipment, both new and used,
10including that manufactured on special order, certified by the
11purchaser to be used primarily for production agriculture or
12State or federal agricultural programs, including individual
13replacement parts for the machinery and equipment, including
14machinery and equipment purchased for lease, and including
15implements of husbandry defined in Section 1-130 of the
16Illinois Vehicle Code, farm machinery and agricultural
17chemical and fertilizer spreaders, and nurse wagons required to
18be registered under Section 3-809 of the Illinois Vehicle Code,
19but excluding other motor vehicles required to be registered
20under the Illinois Vehicle Code. Horticultural polyhouses or
21hoop houses used for propagating, growing, or overwintering
22plants shall be considered farm machinery and equipment under
23this item (2). Agricultural chemical tender tanks and dry boxes
24shall include units sold separately from a motor vehicle

 

 

HB4300- 380 -LRB099 14379 HLH 38474 b

1required to be licensed and units sold mounted on a motor
2vehicle required to be licensed, if the selling price of the
3tender is separately stated.
4    Farm machinery and equipment shall include precision
5farming equipment that is installed or purchased to be
6installed on farm machinery and equipment including, but not
7limited to, tractors, harvesters, sprayers, planters, seeders,
8or spreaders. Precision farming equipment includes, but is not
9limited to, soil testing sensors, computers, monitors,
10software, global positioning and mapping systems, and other
11such equipment.
12    Farm machinery and equipment also includes computers,
13sensors, software, and related equipment used primarily in the
14computer-assisted operation of production agriculture
15facilities, equipment, and activities such as, but not limited
16to, the collection, monitoring, and correlation of animal and
17crop data for the purpose of formulating animal diets and
18agricultural chemicals. This item (2) is exempt from the
19provisions of Section 2-70.
20    (3) Until July 1, 2003, distillation machinery and
21equipment, sold as a unit or kit, assembled or installed by the
22retailer, certified by the user to be used only for the
23production of ethyl alcohol that will be used for consumption
24as motor fuel or as a component of motor fuel for the personal
25use of the user, and not subject to sale or resale.
26    (4) Until July 1, 2003 and beginning again September 1,

 

 

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12004 through August 30, 2014, graphic arts machinery and
2equipment, including repair and replacement parts, both new and
3used, and including that manufactured on special order or
4purchased for lease, certified by the purchaser to be used
5primarily for graphic arts production. Equipment includes
6chemicals or chemicals acting as catalysts but only if the
7chemicals or chemicals acting as catalysts effect a direct and
8immediate change upon a graphic arts product.
9    (5) A motor vehicle that is used for automobile renting, as
10defined in the Automobile Renting Occupation and Use Tax Act.
11This paragraph is exempt from the provisions of Section 2-70.
12    (6) Personal property sold by a teacher-sponsored student
13organization affiliated with an elementary or secondary school
14located in Illinois.
15    (7) Until July 1, 2003, proceeds of that portion of the
16selling price of a passenger car the sale of which is subject
17to the Replacement Vehicle Tax.
18    (8) Personal property sold to an Illinois county fair
19association for use in conducting, operating, or promoting the
20county fair.
21    (9) Personal property sold to a not-for-profit arts or
22cultural organization that establishes, by proof required by
23the Department by rule, that it has received an exemption under
24Section 501(c)(3) of the Internal Revenue Code and that is
25organized and operated primarily for the presentation or
26support of arts or cultural programming, activities, or

 

 

HB4300- 382 -LRB099 14379 HLH 38474 b

1services. These organizations include, but are not limited to,
2music and dramatic arts organizations such as symphony
3orchestras and theatrical groups, arts and cultural service
4organizations, local arts councils, visual arts organizations,
5and media arts organizations. On and after the effective date
6of this amendatory Act of the 92nd General Assembly, however,
7an entity otherwise eligible for this exemption shall not make
8tax-free purchases unless it has an active identification
9number issued by the Department.
10    (10) Personal property sold by a corporation, society,
11association, foundation, institution, or organization, other
12than a limited liability company, that is organized and
13operated as a not-for-profit service enterprise for the benefit
14of persons 65 years of age or older if the personal property
15was not purchased by the enterprise for the purpose of resale
16by the enterprise.
17    (11) Personal property sold to a governmental body, to a
18corporation, society, association, foundation, or institution
19organized and operated exclusively for charitable, religious,
20or educational purposes, or to a not-for-profit corporation,
21society, association, foundation, institution, or organization
22that has no compensated officers or employees and that is
23organized and operated primarily for the recreation of persons
2455 years of age or older. A limited liability company may
25qualify for the exemption under this paragraph only if the
26limited liability company is organized and operated

 

 

HB4300- 383 -LRB099 14379 HLH 38474 b

1exclusively for educational purposes. On and after July 1,
21987, however, no entity otherwise eligible for this exemption
3shall make tax-free purchases unless it has an active
4identification number issued by the Department.
5    (12) Tangible personal property sold to interstate
6carriers for hire for use as rolling stock moving in interstate
7commerce or to lessors under leases of one year or longer
8executed or in effect at the time of purchase by interstate
9carriers for hire for use as rolling stock moving in interstate
10commerce and equipment operated by a telecommunications
11provider, licensed as a common carrier by the Federal
12Communications Commission, which is permanently installed in
13or affixed to aircraft moving in interstate commerce.
14    (12-5) On and after July 1, 2003 and through June 30, 2004,
15motor vehicles of the second division with a gross vehicle
16weight in excess of 8,000 pounds that are subject to the
17commercial distribution fee imposed under Section 3-815.1 of
18the Illinois Vehicle Code. Beginning on July 1, 2004 and
19through June 30, 2005, the use in this State of motor vehicles
20of the second division: (i) with a gross vehicle weight rating
21in excess of 8,000 pounds; (ii) that are subject to the
22commercial distribution fee imposed under Section 3-815.1 of
23the Illinois Vehicle Code; and (iii) that are primarily used
24for commercial purposes. Through June 30, 2005, this exemption
25applies to repair and replacement parts added after the initial
26purchase of such a motor vehicle if that motor vehicle is used

 

 

HB4300- 384 -LRB099 14379 HLH 38474 b

1in a manner that would qualify for the rolling stock exemption
2otherwise provided for in this Act. For purposes of this
3paragraph, "used for commercial purposes" means the
4transportation of persons or property in furtherance of any
5commercial or industrial enterprise whether for-hire or not.
6    (13) Proceeds from sales to owners, lessors, or shippers of
7tangible personal property that is utilized by interstate
8carriers for hire for use as rolling stock moving in interstate
9commerce and equipment operated by a telecommunications
10provider, licensed as a common carrier by the Federal
11Communications Commission, which is permanently installed in
12or affixed to aircraft moving in interstate commerce.
13    (14) Machinery and equipment that will be used by the
14purchaser, or a lessee of the purchaser, primarily in the
15process of manufacturing or assembling tangible personal
16property for wholesale or retail sale or lease, whether the
17sale or lease is made directly by the manufacturer or by some
18other person, whether the materials used in the process are
19owned by the manufacturer or some other person, or whether the
20sale or lease is made apart from or as an incident to the
21seller's engaging in the service occupation of producing
22machines, tools, dies, jigs, patterns, gauges, or other similar
23items of no commercial value on special order for a particular
24purchaser. The exemption provided by this paragraph (14) does
25not include machinery and equipment used in (i) the generation
26of electricity for wholesale or retail sale; (ii) the

 

 

HB4300- 385 -LRB099 14379 HLH 38474 b

1generation or treatment of natural or artificial gas for
2wholesale or retail sale that is delivered to customers through
3pipes, pipelines, or mains; or (iii) the treatment of water for
4wholesale or retail sale that is delivered to customers through
5pipes, pipelines, or mains. The provisions of Public Act 98-583
6are declaratory of existing law as to the meaning and scope of
7this exemption.
8    (15) Proceeds of mandatory service charges separately
9stated on customers' bills for purchase and consumption of food
10and beverages, to the extent that the proceeds of the service
11charge are in fact turned over as tips or as a substitute for
12tips to the employees who participate directly in preparing,
13serving, hosting or cleaning up the food or beverage function
14with respect to which the service charge is imposed.
15    (16) Petroleum products sold to a purchaser if the seller
16is prohibited by federal law from charging tax to the
17purchaser.
18    (17) Through June 30, 2016, tangible Tangible personal
19property sold to a common carrier by rail or motor that
20receives the physical possession of the property in Illinois
21and that transports the property, or shares with another common
22carrier in the transportation of the property, out of Illinois
23on a standard uniform bill of lading showing the seller of the
24property as the shipper or consignor of the property to a
25destination outside Illinois, for use outside Illinois.
26    (18) Legal tender, currency, medallions, or gold or silver

 

 

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1coinage issued by the State of Illinois, the government of the
2United States of America, or the government of any foreign
3country, and bullion.
4    (19) Until July 1 2003, oil field exploration, drilling,
5and production equipment, including (i) rigs and parts of rigs,
6rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
7tubular goods, including casing and drill strings, (iii) pumps
8and pump-jack units, (iv) storage tanks and flow lines, (v) any
9individual replacement part for oil field exploration,
10drilling, and production equipment, and (vi) machinery and
11equipment purchased for lease; but excluding motor vehicles
12required to be registered under the Illinois Vehicle Code.
13    (20) Photoprocessing machinery and equipment, including
14repair and replacement parts, both new and used, including that
15manufactured on special order, certified by the purchaser to be
16used primarily for photoprocessing, and including
17photoprocessing machinery and equipment purchased for lease.
18    (21) Coal and aggregate exploration, mining, off-highway
19hauling, processing, maintenance, and reclamation equipment,
20including replacement parts and equipment, and including
21equipment purchased for lease, but excluding motor vehicles
22required to be registered under the Illinois Vehicle Code. The
23changes made to this Section by Public Act 97-767 apply on and
24after July 1, 2003, but no claim for credit or refund is
25allowed on or after August 16, 2013 (the effective date of
26Public Act 98-456) for such taxes paid during the period

 

 

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1beginning July 1, 2003 and ending on August 16, 2013 (the
2effective date of Public Act 98-456).
3    (22) Until June 30, 2013, fuel and petroleum products sold
4to or used by an air carrier, certified by the carrier to be
5used for consumption, shipment, or storage in the conduct of
6its business as an air common carrier, for a flight destined
7for or returning from a location or locations outside the
8United States without regard to previous or subsequent domestic
9stopovers.
10    Beginning July 1, 2013, fuel and petroleum products sold to
11or used by an air carrier, certified by the carrier to be used
12for consumption, shipment, or storage in the conduct of its
13business as an air common carrier, for a flight that (i) is
14engaged in foreign trade or is engaged in trade between the
15United States and any of its possessions and (ii) transports at
16least one individual or package for hire from the city of
17origination to the city of final destination on the same
18aircraft, without regard to a change in the flight number of
19that aircraft.
20    (23) A transaction in which the purchase order is received
21by a florist who is located outside Illinois, but who has a
22florist located in Illinois deliver the property to the
23purchaser or the purchaser's donee in Illinois.
24    (24) Fuel consumed or used in the operation of ships,
25barges, or vessels that are used primarily in or for the
26transportation of property or the conveyance of persons for

 

 

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1hire on rivers bordering on this State if the fuel is delivered
2by the seller to the purchaser's barge, ship, or vessel while
3it is afloat upon that bordering river.
4    (25) Except as provided in item (25-5) of this Section, a
5motor vehicle sold in this State to a nonresident even though
6the motor vehicle is delivered to the nonresident in this
7State, if the motor vehicle is not to be titled in this State,
8and if a drive-away permit is issued to the motor vehicle as
9provided in Section 3-603 of the Illinois Vehicle Code or if
10the nonresident purchaser has vehicle registration plates to
11transfer to the motor vehicle upon returning to his or her home
12state. The issuance of the drive-away permit or having the
13out-of-state registration plates to be transferred is prima
14facie evidence that the motor vehicle will not be titled in
15this State.
16    (25-5) The exemption under item (25) does not apply if the
17state in which the motor vehicle will be titled does not allow
18a reciprocal exemption for a motor vehicle sold and delivered
19in that state to an Illinois resident but titled in Illinois.
20The tax collected under this Act on the sale of a motor vehicle
21in this State to a resident of another state that does not
22allow a reciprocal exemption shall be imposed at a rate equal
23to the state's rate of tax on taxable property in the state in
24which the purchaser is a resident, except that the tax shall
25not exceed the tax that would otherwise be imposed under this
26Act. At the time of the sale, the purchaser shall execute a

 

 

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1statement, signed under penalty of perjury, of his or her
2intent to title the vehicle in the state in which the purchaser
3is a resident within 30 days after the sale and of the fact of
4the payment to the State of Illinois of tax in an amount
5equivalent to the state's rate of tax on taxable property in
6his or her state of residence and shall submit the statement to
7the appropriate tax collection agency in his or her state of
8residence. In addition, the retailer must retain a signed copy
9of the statement in his or her records. Nothing in this item
10shall be construed to require the removal of the vehicle from
11this state following the filing of an intent to title the
12vehicle in the purchaser's state of residence if the purchaser
13titles the vehicle in his or her state of residence within 30
14days after the date of sale. The tax collected under this Act
15in accordance with this item (25-5) shall be proportionately
16distributed as if the tax were collected at the 6.25% general
17rate imposed under this Act.
18    (25-7) Beginning on July 1, 2007, no tax is imposed under
19this Act on the sale of an aircraft, as defined in Section 3 of
20the Illinois Aeronautics Act, if all of the following
21conditions are met:
22        (1) the aircraft leaves this State within 15 days after
23    the later of either the issuance of the final billing for
24    the sale of the aircraft, or the authorized approval for
25    return to service, completion of the maintenance record
26    entry, and completion of the test flight and ground test

 

 

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1    for inspection, as required by 14 C.F.R. 91.407;
2        (2) the aircraft is not based or registered in this
3    State after the sale of the aircraft; and
4        (3) the seller retains in his or her books and records
5    and provides to the Department a signed and dated
6    certification from the purchaser, on a form prescribed by
7    the Department, certifying that the requirements of this
8    item (25-7) are met. The certificate must also include the
9    name and address of the purchaser, the address of the
10    location where the aircraft is to be titled or registered,
11    the address of the primary physical location of the
12    aircraft, and other information that the Department may
13    reasonably require.
14    For purposes of this item (25-7):
15    "Based in this State" means hangared, stored, or otherwise
16used, excluding post-sale customizations as defined in this
17Section, for 10 or more days in each 12-month period
18immediately following the date of the sale of the aircraft.
19    "Registered in this State" means an aircraft registered
20with the Department of Transportation, Aeronautics Division,
21or titled or registered with the Federal Aviation
22Administration to an address located in this State.
23    This paragraph (25-7) is exempt from the provisions of
24Section 2-70.
25    (26) Semen used for artificial insemination of livestock
26for direct agricultural production.

 

 

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1    (27) Horses, or interests in horses, registered with and
2meeting the requirements of any of the Arabian Horse Club
3Registry of America, Appaloosa Horse Club, American Quarter
4Horse Association, United States Trotting Association, or
5Jockey Club, as appropriate, used for purposes of breeding or
6racing for prizes. This item (27) is exempt from the provisions
7of Section 2-70, and the exemption provided for under this item
8(27) applies for all periods beginning May 30, 1995, but no
9claim for credit or refund is allowed on or after January 1,
102008 (the effective date of Public Act 95-88) for such taxes
11paid during the period beginning May 30, 2000 and ending on
12January 1, 2008 (the effective date of Public Act 95-88).
13    (28) Computers and communications equipment utilized for
14any hospital purpose and equipment used in the diagnosis,
15analysis, or treatment of hospital patients sold to a lessor
16who leases the equipment, under a lease of one year or longer
17executed or in effect at the time of the purchase, to a
18hospital that has been issued an active tax exemption
19identification number by the Department under Section 1g of
20this Act.
21    (29) Personal property sold to a lessor who leases the
22property, under a lease of one year or longer executed or in
23effect at the time of the purchase, to a governmental body that
24has been issued an active tax exemption identification number
25by the Department under Section 1g of this Act.
26    (30) Beginning with taxable years ending on or after

 

 

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1December 31, 1995 and ending with taxable years ending on or
2before December 31, 2004, personal property that is donated for
3disaster relief to be used in a State or federally declared
4disaster area in Illinois or bordering Illinois by a
5manufacturer or retailer that is registered in this State to a
6corporation, society, association, foundation, or institution
7that has been issued a sales tax exemption identification
8number by the Department that assists victims of the disaster
9who reside within the declared disaster area.
10    (31) Beginning with taxable years ending on or after
11December 31, 1995 and ending with taxable years ending on or
12before December 31, 2004, personal property that is used in the
13performance of infrastructure repairs in this State, including
14but not limited to municipal roads and streets, access roads,
15bridges, sidewalks, waste disposal systems, water and sewer
16line extensions, water distribution and purification
17facilities, storm water drainage and retention facilities, and
18sewage treatment facilities, resulting from a State or
19federally declared disaster in Illinois or bordering Illinois
20when such repairs are initiated on facilities located in the
21declared disaster area within 6 months after the disaster.
22    (32) Beginning July 1, 1999, game or game birds sold at a
23"game breeding and hunting preserve area" as that term is used
24in the Wildlife Code. This paragraph is exempt from the
25provisions of Section 2-70.
26    (33) A motor vehicle, as that term is defined in Section

 

 

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11-146 of the Illinois Vehicle Code, that is donated to a
2corporation, limited liability company, society, association,
3foundation, or institution that is determined by the Department
4to be organized and operated exclusively for educational
5purposes. For purposes of this exemption, "a corporation,
6limited liability company, society, association, foundation,
7or institution organized and operated exclusively for
8educational purposes" means all tax-supported public schools,
9private schools that offer systematic instruction in useful
10branches of learning by methods common to public schools and
11that compare favorably in their scope and intensity with the
12course of study presented in tax-supported schools, and
13vocational or technical schools or institutes organized and
14operated exclusively to provide a course of study of not less
15than 6 weeks duration and designed to prepare individuals to
16follow a trade or to pursue a manual, technical, mechanical,
17industrial, business, or commercial occupation.
18    (34) Beginning January 1, 2000, personal property,
19including food, purchased through fundraising events for the
20benefit of a public or private elementary or secondary school,
21a group of those schools, or one or more school districts if
22the events are sponsored by an entity recognized by the school
23district that consists primarily of volunteers and includes
24parents and teachers of the school children. This paragraph
25does not apply to fundraising events (i) for the benefit of
26private home instruction or (ii) for which the fundraising

 

 

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1entity purchases the personal property sold at the events from
2another individual or entity that sold the property for the
3purpose of resale by the fundraising entity and that profits
4from the sale to the fundraising entity. This paragraph is
5exempt from the provisions of Section 2-70.
6    (35) Beginning January 1, 2000 and through December 31,
72001, new or used automatic vending machines that prepare and
8serve hot food and beverages, including coffee, soup, and other
9items, and replacement parts for these machines. Beginning
10January 1, 2002 and through June 30, 2003, machines and parts
11for machines used in commercial, coin-operated amusement and
12vending business if a use or occupation tax is paid on the
13gross receipts derived from the use of the commercial,
14coin-operated amusement and vending machines. This paragraph
15is exempt from the provisions of Section 2-70.
16    (35-5) Beginning August 23, 2001 and through June 30, 2016,
17food for human consumption that is to be consumed off the
18premises where it is sold (other than alcoholic beverages, soft
19drinks, and food that has been prepared for immediate
20consumption) and prescription and nonprescription medicines,
21drugs, medical appliances, and insulin, urine testing
22materials, syringes, and needles used by diabetics, for human
23use, when purchased for use by a person receiving medical
24assistance under Article V of the Illinois Public Aid Code who
25resides in a licensed long-term care facility, as defined in
26the Nursing Home Care Act, or a licensed facility as defined in

 

 

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1the ID/DD Community Care Act, the MC/DD Act, or the Specialized
2Mental Health Rehabilitation Act of 2013.
3    (36) Beginning August 2, 2001, computers and
4communications equipment utilized for any hospital purpose and
5equipment used in the diagnosis, analysis, or treatment of
6hospital patients sold to a lessor who leases the equipment,
7under a lease of one year or longer executed or in effect at
8the time of the purchase, to a hospital that has been issued an
9active tax exemption identification number by the Department
10under Section 1g of this Act. This paragraph is exempt from the
11provisions of Section 2-70.
12    (37) Beginning August 2, 2001, personal property sold to a
13lessor who leases the property, under a lease of one year or
14longer executed or in effect at the time of the purchase, to a
15governmental body that has been issued an active tax exemption
16identification number by the Department under Section 1g of
17this Act. This paragraph is exempt from the provisions of
18Section 2-70.
19    (38) Beginning on January 1, 2002 and through June 30,
202016, tangible personal property purchased from an Illinois
21retailer by a taxpayer engaged in centralized purchasing
22activities in Illinois who will, upon receipt of the property
23in Illinois, temporarily store the property in Illinois (i) for
24the purpose of subsequently transporting it outside this State
25for use or consumption thereafter solely outside this State or
26(ii) for the purpose of being processed, fabricated, or

 

 

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1manufactured into, attached to, or incorporated into other
2tangible personal property to be transported outside this State
3and thereafter used or consumed solely outside this State. The
4Director of Revenue shall, pursuant to rules adopted in
5accordance with the Illinois Administrative Procedure Act,
6issue a permit to any taxpayer in good standing with the
7Department who is eligible for the exemption under this
8paragraph (38). The permit issued under this paragraph (38)
9shall authorize the holder, to the extent and in the manner
10specified in the rules adopted under this Act, to purchase
11tangible personal property from a retailer exempt from the
12taxes imposed by this Act. Taxpayers shall maintain all
13necessary books and records to substantiate the use and
14consumption of all such tangible personal property outside of
15the State of Illinois.
16    (39) Beginning January 1, 2008, tangible personal property
17used in the construction or maintenance of a community water
18supply, as defined under Section 3.145 of the Environmental
19Protection Act, that is operated by a not-for-profit
20corporation that holds a valid water supply permit issued under
21Title IV of the Environmental Protection Act. This paragraph is
22exempt from the provisions of Section 2-70.
23    (40) Beginning January 1, 2010, materials, parts,
24equipment, components, and furnishings incorporated into or
25upon an aircraft as part of the modification, refurbishment,
26completion, replacement, repair, or maintenance of the

 

 

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1aircraft. This exemption includes consumable supplies used in
2the modification, refurbishment, completion, replacement,
3repair, and maintenance of aircraft, but excludes any
4materials, parts, equipment, components, and consumable
5supplies used in the modification, replacement, repair, and
6maintenance of aircraft engines or power plants, whether such
7engines or power plants are installed or uninstalled upon any
8such aircraft. "Consumable supplies" include, but are not
9limited to, adhesive, tape, sandpaper, general purpose
10lubricants, cleaning solution, latex gloves, and protective
11films. This exemption applies only to the sale of qualifying
12tangible personal property to persons who modify, refurbish,
13complete, replace, or maintain an aircraft and who (i) hold an
14Air Agency Certificate and are empowered to operate an approved
15repair station by the Federal Aviation Administration, (ii)
16have a Class IV Rating, and (iii) conduct operations in
17accordance with Part 145 of the Federal Aviation Regulations.
18The exemption does not include aircraft operated by a
19commercial air carrier providing scheduled passenger air
20service pursuant to authority issued under Part 121 or Part 129
21of the Federal Aviation Regulations. The changes made to this
22paragraph (40) by Public Act 98-534 are declarative of existing
23law.
24    (41) Tangible personal property sold to a
25public-facilities corporation, as described in Section
2611-65-10 of the Illinois Municipal Code, for purposes of

 

 

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1constructing or furnishing a municipal convention hall, but
2only if the legal title to the municipal convention hall is
3transferred to the municipality without any further
4consideration by or on behalf of the municipality at the time
5of the completion of the municipal convention hall or upon the
6retirement or redemption of any bonds or other debt instruments
7issued by the public-facilities corporation in connection with
8the development of the municipal convention hall. This
9exemption includes existing public-facilities corporations as
10provided in Section 11-65-25 of the Illinois Municipal Code.
11This paragraph is exempt from the provisions of Section 2-70.
12(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
1398-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.
141-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.
157-29-15.)
 
16
ARTICLE 35. ROLLING STOCK

 
17    Section 35-5. The Use Tax Act is amended by changing
18Sections 3-55, 3-60, and 3-61 as follows:
 
19    (35 ILCS 105/3-55)  (from Ch. 120, par. 439.3-55)
20    Sec. 3-55. Multistate exemption. To prevent actual or
21likely multistate taxation, the tax imposed by this Act does
22not apply to the use of tangible personal property in this
23State under the following circumstances:

 

 

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1    (a) The use, in this State, of tangible personal property
2acquired outside this State by a nonresident individual and
3brought into this State by the individual for his or her own
4use while temporarily within this State or while passing
5through this State.
6    (b) Through June 30, 2016, the The use, in this State, of
7tangible personal property by an interstate carrier for hire as
8rolling stock moving in interstate commerce or by lessors under
9a lease of one year or longer executed or in effect at the time
10of purchase of tangible personal property by interstate
11carriers for-hire for use as rolling stock moving in interstate
12commerce as long as so used by the interstate carriers
13for-hire, and equipment operated by a telecommunications
14provider, licensed as a common carrier by the Federal
15Communications Commission, which is permanently installed in
16or affixed to aircraft moving in interstate commerce.
17    (c) Through June 30, 2016, the The use, in this State, by
18owners, lessors, or shippers of tangible personal property that
19is utilized by interstate carriers for hire for use as rolling
20stock moving in interstate commerce as long as so used by the
21interstate carriers for hire, and equipment operated by a
22telecommunications provider, licensed as a common carrier by
23the Federal Communications Commission, which is permanently
24installed in or affixed to aircraft moving in interstate
25commerce.
26    (d) The use, in this State, of tangible personal property

 

 

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1that is acquired outside this State and caused to be brought
2into this State by a person who has already paid a tax in
3another State in respect to the sale, purchase, or use of that
4property, to the extent of the amount of the tax properly due
5and paid in the other State.
6    (e) The temporary storage, in this State, of tangible
7personal property that is acquired outside this State and that,
8after being brought into this State and stored here
9temporarily, is used solely outside this State or is physically
10attached to or incorporated into other tangible personal
11property that is used solely outside this State, or is altered
12by converting, fabricating, manufacturing, printing,
13processing, or shaping, and, as altered, is used solely outside
14this State.
15    (f) The temporary storage in this State of building
16materials and fixtures that are acquired either in this State
17or outside this State by an Illinois registered combination
18retailer and construction contractor, and that the purchaser
19thereafter uses outside this State by incorporating that
20property into real estate located outside this State.
21    (g) The use or purchase of tangible personal property by a
22common carrier by rail or motor that receives the physical
23possession of the property in Illinois, and that transports the
24property, or shares with another common carrier in the
25transportation of the property, out of Illinois on a standard
26uniform bill of lading showing the seller of the property as

 

 

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1the shipper or consignor of the property to a destination
2outside Illinois, for use outside Illinois.
3    (h) Except as provided in subsection (h-1), the use, in
4this State, of a motor vehicle that was sold in this State to a
5nonresident, even though the motor vehicle is delivered to the
6nonresident in this State, if the motor vehicle is not to be
7titled in this State, and if a drive-away permit is issued to
8the motor vehicle as provided in Section 3-603 of the Illinois
9Vehicle Code or if the nonresident purchaser has vehicle
10registration plates to transfer to the motor vehicle upon
11returning to his or her home state. The issuance of the
12drive-away permit or having the out-of-state registration
13plates to be transferred shall be prima facie evidence that the
14motor vehicle will not be titled in this State.
15    (h-1) The exemption under subsection (h) does not apply if
16the state in which the motor vehicle will be titled does not
17allow a reciprocal exemption for the use in that state of a
18motor vehicle sold and delivered in that state to an Illinois
19resident but titled in Illinois. The tax collected under this
20Act on the sale of a motor vehicle in this State to a resident
21of another state that does not allow a reciprocal exemption
22shall be imposed at a rate equal to the state's rate of tax on
23taxable property in the state in which the purchaser is a
24resident, except that the tax shall not exceed the tax that
25would otherwise be imposed under this Act. At the time of the
26sale, the purchaser shall execute a statement, signed under

 

 

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1penalty of perjury, of his or her intent to title the vehicle
2in the state in which the purchaser is a resident within 30
3days after the sale and of the fact of the payment to the State
4of Illinois of tax in an amount equivalent to the state's rate
5of tax on taxable property in his or her state of residence and
6shall submit the statement to the appropriate tax collection
7agency in his or her state of residence. In addition, the
8retailer must retain a signed copy of the statement in his or
9her records. Nothing in this subsection shall be construed to
10require the removal of the vehicle from this state following
11the filing of an intent to title the vehicle in the purchaser's
12state of residence if the purchaser titles the vehicle in his
13or her state of residence within 30 days after the date of
14sale. The tax collected under this Act in accordance with this
15subsection (h-1) shall be proportionately distributed as if the
16tax were collected at the 6.25% general rate imposed under this
17Act.
18    (h-2) The following exemptions apply with respect to
19certain aircraft:
20        (1) Beginning on July 1, 2007, no tax is imposed under
21    this Act on the purchase of an aircraft, as defined in
22    Section 3 of the Illinois Aeronautics Act, if all of the
23    following conditions are met:
24            (A) the aircraft leaves this State within 15 days
25        after the later of either the issuance of the final
26        billing for the purchase of the aircraft or the

 

 

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1        authorized approval for return to service, completion
2        of the maintenance record entry, and completion of the
3        test flight and ground test for inspection, as required
4        by 14 C.F.R. 91.407;
5            (B) the aircraft is not based or registered in this
6        State after the purchase of the aircraft; and
7            (C) the purchaser provides the Department with a
8        signed and dated certification, on a form prescribed by
9        the Department, certifying that the requirements of
10        this item (1) are met. The certificate must also
11        include the name and address of the purchaser, the
12        address of the location where the aircraft is to be
13        titled or registered, the address of the primary
14        physical location of the aircraft, and other
15        information that the Department may reasonably
16        require.
17        (2) Beginning on July 1, 2007, no tax is imposed under
18    this Act on the use of an aircraft, as defined in Section 3
19    of the Illinois Aeronautics Act, that is temporarily
20    located in this State for the purpose of a prepurchase
21    evaluation if all of the following conditions are met:
22            (A) the aircraft is not based or registered in this
23        State after the prepurchase evaluation; and
24            (B) the purchaser provides the Department with a
25        signed and dated certification, on a form prescribed by
26        the Department, certifying that the requirements of

 

 

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1        this item (2) are met. The certificate must also
2        include the name and address of the purchaser, the
3        address of the location where the aircraft is to be
4        titled or registered, the address of the primary
5        physical location of the aircraft, and other
6        information that the Department may reasonably
7        require.
8        (3) Beginning on July 1, 2007, no tax is imposed under
9    this Act on the use of an aircraft, as defined in Section 3
10    of the Illinois Aeronautics Act, that is temporarily
11    located in this State for the purpose of a post-sale
12    customization if all of the following conditions are met:
13            (A) the aircraft leaves this State within 15 days
14        after the authorized approval for return to service,
15        completion of the maintenance record entry, and
16        completion of the test flight and ground test for
17        inspection, as required by 14 C.F.R. 91.407;
18            (B) the aircraft is not based or registered in this
19        State either before or after the post-sale
20        customization; and
21            (C) the purchaser provides the Department with a
22        signed and dated certification, on a form prescribed by
23        the Department, certifying that the requirements of
24        this item (3) are met. The certificate must also
25        include the name and address of the purchaser, the
26        address of the location where the aircraft is to be

 

 

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1        titled or registered, the address of the primary
2        physical location of the aircraft, and other
3        information that the Department may reasonably
4        require.
5    If tax becomes due under this subsection (h-2) because of
6the purchaser's use of the aircraft in this State, the
7purchaser shall file a return with the Department and pay the
8tax on the fair market value of the aircraft. This return and
9payment of the tax must be made no later than 30 days after the
10aircraft is used in a taxable manner in this State. The tax is
11based on the fair market value of the aircraft on the date that
12it is first used in a taxable manner in this State.
13    For purposes of this subsection (h-2):
14    "Based in this State" means hangared, stored, or otherwise
15used, excluding post-sale customizations as defined in this
16Section, for 10 or more days in each 12-month period
17immediately following the date of the sale of the aircraft.
18    "Post-sale customization" means any improvement,
19maintenance, or repair that is performed on an aircraft
20following a transfer of ownership of the aircraft.
21    "Prepurchase evaluation" means an examination of an
22aircraft to provide a potential purchaser with information
23relevant to the potential purchase.
24    "Registered in this State" means an aircraft registered
25with the Department of Transportation, Aeronautics Division,
26or titled or registered with the Federal Aviation

 

 

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1Administration to an address located in this State.
2    This subsection (h-2) is exempt from the provisions of
3Section 3-90.
4    (i) Beginning July 1, 1999, the use, in this State, of fuel
5acquired outside this State and brought into this State in the
6fuel supply tanks of locomotives engaged in freight hauling and
7passenger service for interstate commerce. This subsection is
8exempt from the provisions of Section 3-90.
9    (j) Beginning on January 1, 2002 and through June 30, 2016,
10the use of tangible personal property purchased from an
11Illinois retailer by a taxpayer engaged in centralized
12purchasing activities in Illinois who will, upon receipt of the
13property in Illinois, temporarily store the property in
14Illinois (i) for the purpose of subsequently transporting it
15outside this State for use or consumption thereafter solely
16outside this State or (ii) for the purpose of being processed,
17fabricated, or manufactured into, attached to, or incorporated
18into other tangible personal property to be transported outside
19this State and thereafter used or consumed solely outside this
20State. The Director of Revenue shall, pursuant to rules adopted
21in accordance with the Illinois Administrative Procedure Act,
22issue a permit to any taxpayer in good standing with the
23Department who is eligible for the exemption under this
24subsection (j). The permit issued under this subsection (j)
25shall authorize the holder, to the extent and in the manner
26specified in the rules adopted under this Act, to purchase

 

 

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1tangible personal property from a retailer exempt from the
2taxes imposed by this Act. Taxpayers shall maintain all
3necessary books and records to substantiate the use and
4consumption of all such tangible personal property outside of
5the State of Illinois.
6(Source: P.A. 97-73, eff. 6-30-11.)
 
7    (35 ILCS 105/3-60)  (from Ch. 120, par. 439.3-60)
8    Sec. 3-60. Rolling stock exemption. Except as provided in
9Section 3-61 of this Act, through June 30, 2016, the rolling
10stock exemption applies to rolling stock used by an interstate
11carrier for hire, even just between points in Illinois, if the
12rolling stock transports, for hire, persons whose journeys or
13property whose shipments originate or terminate outside
14Illinois.
15(Source: P.A. 93-23, eff. 6-20-03.)
 
16    Section 35-10. The Service Use Tax Act is amended by
17changing Sections 3-45 and 3-50 as follows:
 
18    (35 ILCS 110/3-45)  (from Ch. 120, par. 439.33-45)
19    Sec. 3-45. Multistate exemption. To prevent actual or
20likely multistate taxation, the tax imposed by this Act does
21not apply to the use of tangible personal property in this
22State under the following circumstances:
23    (a) The use, in this State, of property acquired outside

 

 

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1this State by a nonresident individual and brought into this
2State by the individual for his or her own use while
3temporarily within this State or while passing through this
4State.
5    (b) Through June 30, 2016, the The use, in this State, of
6property that is acquired outside this State and that is moved
7into this State for use as rolling stock moving in interstate
8commerce.
9    (c) The use, in this State, of property that is acquired
10outside this State and caused to be brought into this State by
11a person who has already paid a tax in another state in respect
12to the sale, purchase, or use of that property, to the extent
13of the amount of the tax properly due and paid in the other
14state.
15    (d) The temporary storage, in this State, of property that
16is acquired outside this State and that after being brought
17into this State and stored here temporarily, is used solely
18outside this State or is physically attached to or incorporated
19into other property that is used solely outside this State, or
20is altered by converting, fabricating, manufacturing,
21printing, processing, or shaping, and, as altered, is used
22solely outside this State.
23    (e) Beginning July 1, 1999, the use, in this State, of fuel
24acquired outside this State and brought into this State in the
25fuel supply tanks of locomotives engaged in freight hauling and
26passenger service for interstate commerce. This subsection is

 

 

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1exempt from the provisions of Section 3-75.
2    (f) Beginning on January 1, 2002 and through June 30, 2016,
3the use of tangible personal property purchased from an
4Illinois retailer by a taxpayer engaged in centralized
5purchasing activities in Illinois who will, upon receipt of the
6property in Illinois, temporarily store the property in
7Illinois (i) for the purpose of subsequently transporting it
8outside this State for use or consumption thereafter solely
9outside this State or (ii) for the purpose of being processed,
10fabricated, or manufactured into, attached to, or incorporated
11into other tangible personal property to be transported outside
12this State and thereafter used or consumed solely outside this
13State. The Director of Revenue shall, pursuant to rules adopted
14in accordance with the Illinois Administrative Procedure Act,
15issue a permit to any taxpayer in good standing with the
16Department who is eligible for the exemption under this
17subsection (f). The permit issued under this subsection (f)
18shall authorize the holder, to the extent and in the manner
19specified in the rules adopted under this Act, to purchase
20tangible personal property from a retailer exempt from the
21taxes imposed by this Act. Taxpayers shall maintain all
22necessary books and records to substantiate the use and
23consumption of all such tangible personal property outside of
24the State of Illinois.
25(Source: P.A. 97-73, eff. 6-30-11.)
 

 

 

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1    (35 ILCS 110/3-50)  (from Ch. 120, par. 439.33-50)
2    Sec. 3-50. Rolling stock exemption. Except as provided in
3Section 3-51 of this Act, through June 30, 2016, the rolling
4stock exemption applies to rolling stock used by an interstate
5carrier for hire, even just between points in Illinois, if the
6rolling stock transports, for hire, persons whose journeys or
7property whose shipments originate or terminate outside
8Illinois.
9(Source: P.A. 93-23, eff. 6-20-03.)
 
10    Section 35-15. The Service Occupation Tax Act is amended by
11changing Section 2 as follows:
 
12    (35 ILCS 115/2)  (from Ch. 120, par. 439.102)
13    Sec. 2. "Transfer" means any transfer of the title to
14property or of the ownership of property whether or not the
15transferor retains title as security for the payment of amounts
16due him from the transferee.
17    "Cost Price" means the consideration paid by the serviceman
18for a purchase valued in money, whether paid in money or
19otherwise, including cash, credits and services, and shall be
20determined without any deduction on account of the supplier's
21cost of the property sold or on account of any other expense
22incurred by the supplier. When a serviceman contracts out part
23or all of the services required in his sale of service, it
24shall be presumed that the cost price to the serviceman of the

 

 

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1property transferred to him by his or her subcontractor is
2equal to 50% of the subcontractor's charges to the serviceman
3in the absence of proof of the consideration paid by the
4subcontractor for the purchase of such property.
5    "Department" means the Department of Revenue.
6    "Person" means any natural individual, firm, partnership,
7association, joint stock company, joint venture, public or
8private corporation, limited liability company, and any
9receiver, executor, trustee, guardian or other representative
10appointed by order of any court.
11    "Sale of Service" means any transaction except:
12    (a) A retail sale of tangible personal property taxable
13under the Retailers' Occupation Tax Act or under the Use Tax
14Act.
15    (b) A sale of tangible personal property for the purpose of
16resale made in compliance with Section 2c of the Retailers'
17Occupation Tax Act.
18    (c) Except as hereinafter provided, a sale or transfer of
19tangible personal property as an incident to the rendering of
20service for or by any governmental body or for or by any
21corporation, society, association, foundation or institution
22organized and operated exclusively for charitable, religious
23or educational purposes or any not-for-profit corporation,
24society, association, foundation, institution or organization
25which has no compensated officers or employees and which is
26organized and operated primarily for the recreation of persons

 

 

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155 years of age or older. A limited liability company may
2qualify for the exemption under this paragraph only if the
3limited liability company is organized and operated
4exclusively for educational purposes.
5    (d) Through June 30, 2016, a A sale or transfer of tangible
6personal property as an incident to the rendering of service
7for interstate carriers for hire for use as rolling stock
8moving in interstate commerce or lessors under leases of one
9year or longer, executed or in effect at the time of purchase,
10to interstate carriers for hire for use as rolling stock moving
11in interstate commerce, and equipment operated by a
12telecommunications provider, licensed as a common carrier by
13the Federal Communications Commission, which is permanently
14installed in or affixed to aircraft moving in interstate
15commerce.
16    (d-1) Through June 30, 2016, a A sale or transfer of
17tangible personal property as an incident to the rendering of
18service for owners, lessors or shippers of tangible personal
19property which is utilized by interstate carriers for hire for
20use as rolling stock moving in interstate commerce, and
21equipment operated by a telecommunications provider, licensed
22as a common carrier by the Federal Communications Commission,
23which is permanently installed in or affixed to aircraft moving
24in interstate commerce.
25    (d-1.1) On and after July 1, 2003 and through June 30,
262004, a sale or transfer of a motor vehicle of the second

 

 

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1division with a gross vehicle weight in excess of 8,000 pounds
2as an incident to the rendering of service if that motor
3vehicle is subject to the commercial distribution fee imposed
4under Section 3-815.1 of the Illinois Vehicle Code. Beginning
5on July 1, 2004 and through June 30, 2005, the use in this
6State of motor vehicles of the second division: (i) with a
7gross vehicle weight rating in excess of 8,000 pounds; (ii)
8that are subject to the commercial distribution fee imposed
9under Section 3-815.1 of the Illinois Vehicle Code; and (iii)
10that are primarily used for commercial purposes. Through June
1130, 2005, this exemption applies to repair and replacement
12parts added after the initial purchase of such a motor vehicle
13if that motor vehicle is used in a manner that would qualify
14for the rolling stock exemption otherwise provided for in this
15Act. For purposes of this paragraph, "used for commercial
16purposes" means the transportation of persons or property in
17furtherance of any commercial or industrial enterprise whether
18for-hire or not.
19    (d-2) The repairing, reconditioning or remodeling, for a
20common carrier by rail, of tangible personal property which
21belongs to such carrier for hire, and as to which such carrier
22receives the physical possession of the repaired,
23reconditioned or remodeled item of tangible personal property
24in Illinois, and which such carrier transports, or shares with
25another common carrier in the transportation of such property,
26out of Illinois on a standard uniform bill of lading showing

 

 

HB4300- 414 -LRB099 14379 HLH 38474 b

1the person who repaired, reconditioned or remodeled the
2property as the shipper or consignor of such property to a
3destination outside Illinois, for use outside Illinois.
4    (d-3) A sale or transfer of tangible personal property
5which is produced by the seller thereof on special order in
6such a way as to have made the applicable tax the Service
7Occupation Tax or the Service Use Tax, rather than the
8Retailers' Occupation Tax or the Use Tax, for an interstate
9carrier by rail which receives the physical possession of such
10property in Illinois, and which transports such property, or
11shares with another common carrier in the transportation of
12such property, out of Illinois on a standard uniform bill of
13lading showing the seller of the property as the shipper or
14consignor of such property to a destination outside Illinois,
15for use outside Illinois.
16    (d-4) Until January 1, 1997, a sale, by a registered
17serviceman paying tax under this Act to the Department, of
18special order printed materials delivered outside Illinois and
19which are not returned to this State, if delivery is made by
20the seller or agent of the seller, including an agent who
21causes the product to be delivered outside Illinois by a common
22carrier or the U.S. postal service.
23    (e) A sale or transfer of machinery and equipment used
24primarily in the process of the manufacturing or assembling,
25either in an existing, an expanded or a new manufacturing
26facility, of tangible personal property for wholesale or retail

 

 

HB4300- 415 -LRB099 14379 HLH 38474 b

1sale or lease, whether such sale or lease is made directly by
2the manufacturer or by some other person, whether the materials
3used in the process are owned by the manufacturer or some other
4person, or whether such sale or lease is made apart from or as
5an incident to the seller's engaging in a service occupation
6and the applicable tax is a Service Occupation Tax or Service
7Use Tax, rather than Retailers' Occupation Tax or Use Tax. The
8exemption provided by this paragraph (e) does not include
9machinery and equipment used in (i) the generation of
10electricity for wholesale or retail sale; (ii) the generation
11or treatment of natural or artificial gas for wholesale or
12retail sale that is delivered to customers through pipes,
13pipelines, or mains; or (iii) the treatment of water for
14wholesale or retail sale that is delivered to customers through
15pipes, pipelines, or mains. The provisions of this amendatory
16Act of the 98th General Assembly are declaratory of existing
17law as to the meaning and scope of this exemption.
18    (f) Until July 1, 2003, the sale or transfer of
19distillation machinery and equipment, sold as a unit or kit and
20assembled or installed by the retailer, which machinery and
21equipment is certified by the user to be used only for the
22production of ethyl alcohol that will be used for consumption
23as motor fuel or as a component of motor fuel for the personal
24use of such user and not subject to sale or resale.
25    (g) At the election of any serviceman not required to be
26otherwise registered as a retailer under Section 2a of the

 

 

HB4300- 416 -LRB099 14379 HLH 38474 b

1Retailers' Occupation Tax Act, made for each fiscal year sales
2of service in which the aggregate annual cost price of tangible
3personal property transferred as an incident to the sales of
4service is less than 35% (75% in the case of servicemen
5transferring prescription drugs or servicemen engaged in
6graphic arts production) of the aggregate annual total gross
7receipts from all sales of service. The purchase of such
8tangible personal property by the serviceman shall be subject
9to tax under the Retailers' Occupation Tax Act and the Use Tax
10Act. However, if a primary serviceman who has made the election
11described in this paragraph subcontracts service work to a
12secondary serviceman who has also made the election described
13in this paragraph, the primary serviceman does not incur a Use
14Tax liability if the secondary serviceman (i) has paid or will
15pay Use Tax on his or her cost price of any tangible personal
16property transferred to the primary serviceman and (ii)
17certifies that fact in writing to the primary serviceman.
18    Tangible personal property transferred incident to the
19completion of a maintenance agreement is exempt from the tax
20imposed pursuant to this Act.
21    Exemption (e) also includes machinery and equipment used in
22the general maintenance or repair of such exempt machinery and
23equipment or for in-house manufacture of exempt machinery and
24equipment. The machinery and equipment exemption does not
25include machinery and equipment used in (i) the generation of
26electricity for wholesale or retail sale; (ii) the generation

 

 

HB4300- 417 -LRB099 14379 HLH 38474 b

1or treatment of natural or artificial gas for wholesale or
2retail sale that is delivered to customers through pipes,
3pipelines, or mains; or (iii) the treatment of water for
4wholesale or retail sale that is delivered to customers through
5pipes, pipelines, or mains. The provisions of this amendatory
6Act of the 98th General Assembly are declaratory of existing
7law as to the meaning and scope of this exemption. For the
8purposes of exemption (e), each of these terms shall have the
9following meanings: (1) "manufacturing process" shall mean the
10production of any article of tangible personal property,
11whether such article is a finished product or an article for
12use in the process of manufacturing or assembling a different
13article of tangible personal property, by procedures commonly
14regarded as manufacturing, processing, fabricating, or
15refining which changes some existing material or materials into
16a material with a different form, use or name. In relation to a
17recognized integrated business composed of a series of
18operations which collectively constitute manufacturing, or
19individually constitute manufacturing operations, the
20manufacturing process shall be deemed to commence with the
21first operation or stage of production in the series, and shall
22not be deemed to end until the completion of the final product
23in the last operation or stage of production in the series; and
24further for purposes of exemption (e), photoprocessing is
25deemed to be a manufacturing process of tangible personal
26property for wholesale or retail sale; (2) "assembling process"

 

 

HB4300- 418 -LRB099 14379 HLH 38474 b

1shall mean the production of any article of tangible personal
2property, whether such article is a finished product or an
3article for use in the process of manufacturing or assembling a
4different article of tangible personal property, by the
5combination of existing materials in a manner commonly regarded
6as assembling which results in a material of a different form,
7use or name; (3) "machinery" shall mean major mechanical
8machines or major components of such machines contributing to a
9manufacturing or assembling process; and (4) "equipment" shall
10include any independent device or tool separate from any
11machinery but essential to an integrated manufacturing or
12assembly process; including computers used primarily in a
13manufacturer's computer assisted design, computer assisted
14manufacturing (CAD/CAM) system; or any subunit or assembly
15comprising a component of any machinery or auxiliary, adjunct
16or attachment parts of machinery, such as tools, dies, jigs,
17fixtures, patterns and molds; or any parts which require
18periodic replacement in the course of normal operation; but
19shall not include hand tools. Equipment includes chemicals or
20chemicals acting as catalysts but only if the chemicals or
21chemicals acting as catalysts effect a direct and immediate
22change upon a product being manufactured or assembled for
23wholesale or retail sale or lease. The purchaser of such
24machinery and equipment who has an active resale registration
25number shall furnish such number to the seller at the time of
26purchase. The purchaser of such machinery and equipment and

 

 

HB4300- 419 -LRB099 14379 HLH 38474 b

1tools without an active resale registration number shall
2furnish to the seller a certificate of exemption for each
3transaction stating facts establishing the exemption for that
4transaction, which certificate shall be available to the
5Department for inspection or audit.
6    Except as provided in Section 2d of this Act, the rolling
7stock exemption applies to rolling stock used by an interstate
8carrier for hire, even just between points in Illinois, if such
9rolling stock transports, for hire, persons whose journeys or
10property whose shipments originate or terminate outside
11Illinois.
12    Any informal rulings, opinions or letters issued by the
13Department in response to an inquiry or request for any opinion
14from any person regarding the coverage and applicability of
15exemption (e) to specific devices shall be published,
16maintained as a public record, and made available for public
17inspection and copying. If the informal ruling, opinion or
18letter contains trade secrets or other confidential
19information, where possible the Department shall delete such
20information prior to publication. Whenever such informal
21rulings, opinions, or letters contain any policy of general
22applicability, the Department shall formulate and adopt such
23policy as a rule in accordance with the provisions of the
24Illinois Administrative Procedure Act.
25    On and after July 1, 1987, no entity otherwise eligible
26under exemption (c) of this Section shall make tax free

 

 

HB4300- 420 -LRB099 14379 HLH 38474 b

1purchases unless it has an active exemption identification
2number issued by the Department.
3    "Serviceman" means any person who is engaged in the
4occupation of making sales of service.
5    "Sale at Retail" means "sale at retail" as defined in the
6Retailers' Occupation Tax Act.
7    "Supplier" means any person who makes sales of tangible
8personal property to servicemen for the purpose of resale as an
9incident to a sale of service.
10(Source: P.A. 98-583, eff. 1-1-14.)
 
11    Section 35-20. The Retailers' Occupation Tax Act is amended
12by changing Sections 2-5 and 2-50 as follows:
 
13    (35 ILCS 120/2-5)
14    Sec. 2-5. Exemptions. Gross receipts from proceeds from the
15sale of the following tangible personal property are exempt
16from the tax imposed by this Act:
17    (1) Farm chemicals.
18    (2) Farm machinery and equipment, both new and used,
19including that manufactured on special order, certified by the
20purchaser to be used primarily for production agriculture or
21State or federal agricultural programs, including individual
22replacement parts for the machinery and equipment, including
23machinery and equipment purchased for lease, and including
24implements of husbandry defined in Section 1-130 of the

 

 

HB4300- 421 -LRB099 14379 HLH 38474 b

1Illinois Vehicle Code, farm machinery and agricultural
2chemical and fertilizer spreaders, and nurse wagons required to
3be registered under Section 3-809 of the Illinois Vehicle Code,
4but excluding other motor vehicles required to be registered
5under the Illinois Vehicle Code. Horticultural polyhouses or
6hoop houses used for propagating, growing, or overwintering
7plants shall be considered farm machinery and equipment under
8this item (2). Agricultural chemical tender tanks and dry boxes
9shall include units sold separately from a motor vehicle
10required to be licensed and units sold mounted on a motor
11vehicle required to be licensed, if the selling price of the
12tender is separately stated.
13    Farm machinery and equipment shall include precision
14farming equipment that is installed or purchased to be
15installed on farm machinery and equipment including, but not
16limited to, tractors, harvesters, sprayers, planters, seeders,
17or spreaders. Precision farming equipment includes, but is not
18limited to, soil testing sensors, computers, monitors,
19software, global positioning and mapping systems, and other
20such equipment.
21    Farm machinery and equipment also includes computers,
22sensors, software, and related equipment used primarily in the
23computer-assisted operation of production agriculture
24facilities, equipment, and activities such as, but not limited
25to, the collection, monitoring, and correlation of animal and
26crop data for the purpose of formulating animal diets and

 

 

HB4300- 422 -LRB099 14379 HLH 38474 b

1agricultural chemicals. This item (2) is exempt from the
2provisions of Section 2-70.
3    (3) Until July 1, 2003, distillation machinery and
4equipment, sold as a unit or kit, assembled or installed by the
5retailer, certified by the user to be used only for the
6production of ethyl alcohol that will be used for consumption
7as motor fuel or as a component of motor fuel for the personal
8use of the user, and not subject to sale or resale.
9    (4) Until July 1, 2003 and beginning again September 1,
102004 through August 30, 2014, graphic arts machinery and
11equipment, including repair and replacement parts, both new and
12used, and including that manufactured on special order or
13purchased for lease, certified by the purchaser to be used
14primarily for graphic arts production. Equipment includes
15chemicals or chemicals acting as catalysts but only if the
16chemicals or chemicals acting as catalysts effect a direct and
17immediate change upon a graphic arts product.
18    (5) A motor vehicle that is used for automobile renting, as
19defined in the Automobile Renting Occupation and Use Tax Act.
20This paragraph is exempt from the provisions of Section 2-70.
21    (6) Personal property sold by a teacher-sponsored student
22organization affiliated with an elementary or secondary school
23located in Illinois.
24    (7) Until July 1, 2003, proceeds of that portion of the
25selling price of a passenger car the sale of which is subject
26to the Replacement Vehicle Tax.

 

 

HB4300- 423 -LRB099 14379 HLH 38474 b

1    (8) Personal property sold to an Illinois county fair
2association for use in conducting, operating, or promoting the
3county fair.
4    (9) Personal property sold to a not-for-profit arts or
5cultural organization that establishes, by proof required by
6the Department by rule, that it has received an exemption under
7Section 501(c)(3) of the Internal Revenue Code and that is
8organized and operated primarily for the presentation or
9support of arts or cultural programming, activities, or
10services. These organizations include, but are not limited to,
11music and dramatic arts organizations such as symphony
12orchestras and theatrical groups, arts and cultural service
13organizations, local arts councils, visual arts organizations,
14and media arts organizations. On and after the effective date
15of this amendatory Act of the 92nd General Assembly, however,
16an entity otherwise eligible for this exemption shall not make
17tax-free purchases unless it has an active identification
18number issued by the Department.
19    (10) Personal property sold by a corporation, society,
20association, foundation, institution, or organization, other
21than a limited liability company, that is organized and
22operated as a not-for-profit service enterprise for the benefit
23of persons 65 years of age or older if the personal property
24was not purchased by the enterprise for the purpose of resale
25by the enterprise.
26    (11) Personal property sold to a governmental body, to a

 

 

HB4300- 424 -LRB099 14379 HLH 38474 b

1corporation, society, association, foundation, or institution
2organized and operated exclusively for charitable, religious,
3or educational purposes, or to a not-for-profit corporation,
4society, association, foundation, institution, or organization
5that has no compensated officers or employees and that is
6organized and operated primarily for the recreation of persons
755 years of age or older. A limited liability company may
8qualify for the exemption under this paragraph only if the
9limited liability company is organized and operated
10exclusively for educational purposes. On and after July 1,
111987, however, no entity otherwise eligible for this exemption
12shall make tax-free purchases unless it has an active
13identification number issued by the Department.
14    (12) Through June 30, 2016, tangible Tangible personal
15property sold to interstate carriers for hire for use as
16rolling stock moving in interstate commerce or to lessors under
17leases of one year or longer executed or in effect at the time
18of purchase by interstate carriers for hire for use as rolling
19stock moving in interstate commerce and equipment operated by a
20telecommunications provider, licensed as a common carrier by
21the Federal Communications Commission, which is permanently
22installed in or affixed to aircraft moving in interstate
23commerce.
24    (12-5) On and after July 1, 2003 and through June 30, 2004,
25motor vehicles of the second division with a gross vehicle
26weight in excess of 8,000 pounds that are subject to the

 

 

HB4300- 425 -LRB099 14379 HLH 38474 b

1commercial distribution fee imposed under Section 3-815.1 of
2the Illinois Vehicle Code. Beginning on July 1, 2004 and
3through June 30, 2005, the use in this State of motor vehicles
4of the second division: (i) with a gross vehicle weight rating
5in excess of 8,000 pounds; (ii) that are subject to the
6commercial distribution fee imposed under Section 3-815.1 of
7the Illinois Vehicle Code; and (iii) that are primarily used
8for commercial purposes. Through June 30, 2005, this exemption
9applies to repair and replacement parts added after the initial
10purchase of such a motor vehicle if that motor vehicle is used
11in a manner that would qualify for the rolling stock exemption
12otherwise provided for in this Act. For purposes of this
13paragraph, "used for commercial purposes" means the
14transportation of persons or property in furtherance of any
15commercial or industrial enterprise whether for-hire or not.
16    (13) Through June 20, 2016, proceeds Proceeds from sales to
17owners, lessors, or shippers of tangible personal property that
18is utilized by interstate carriers for hire for use as rolling
19stock moving in interstate commerce and equipment operated by a
20telecommunications provider, licensed as a common carrier by
21the Federal Communications Commission, which is permanently
22installed in or affixed to aircraft moving in interstate
23commerce.
24    (14) Machinery and equipment that will be used by the
25purchaser, or a lessee of the purchaser, primarily in the
26process of manufacturing or assembling tangible personal

 

 

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1property for wholesale or retail sale or lease, whether the
2sale or lease is made directly by the manufacturer or by some
3other person, whether the materials used in the process are
4owned by the manufacturer or some other person, or whether the
5sale or lease is made apart from or as an incident to the
6seller's engaging in the service occupation of producing
7machines, tools, dies, jigs, patterns, gauges, or other similar
8items of no commercial value on special order for a particular
9purchaser. The exemption provided by this paragraph (14) does
10not include machinery and equipment used in (i) the generation
11of electricity for wholesale or retail sale; (ii) the
12generation or treatment of natural or artificial gas for
13wholesale or retail sale that is delivered to customers through
14pipes, pipelines, or mains; or (iii) the treatment of water for
15wholesale or retail sale that is delivered to customers through
16pipes, pipelines, or mains. The provisions of Public Act 98-583
17are declaratory of existing law as to the meaning and scope of
18this exemption.
19    (15) Proceeds of mandatory service charges separately
20stated on customers' bills for purchase and consumption of food
21and beverages, to the extent that the proceeds of the service
22charge are in fact turned over as tips or as a substitute for
23tips to the employees who participate directly in preparing,
24serving, hosting or cleaning up the food or beverage function
25with respect to which the service charge is imposed.
26    (16) Petroleum products sold to a purchaser if the seller

 

 

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1is prohibited by federal law from charging tax to the
2purchaser.
3    (17) Tangible personal property sold to a common carrier by
4rail or motor that receives the physical possession of the
5property in Illinois and that transports the property, or
6shares with another common carrier in the transportation of the
7property, out of Illinois on a standard uniform bill of lading
8showing the seller of the property as the shipper or consignor
9of the property to a destination outside Illinois, for use
10outside Illinois.
11    (18) Legal tender, currency, medallions, or gold or silver
12coinage issued by the State of Illinois, the government of the
13United States of America, or the government of any foreign
14country, and bullion.
15    (19) Until July 1 2003, oil field exploration, drilling,
16and production equipment, including (i) rigs and parts of rigs,
17rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
18tubular goods, including casing and drill strings, (iii) pumps
19and pump-jack units, (iv) storage tanks and flow lines, (v) any
20individual replacement part for oil field exploration,
21drilling, and production equipment, and (vi) machinery and
22equipment purchased for lease; but excluding motor vehicles
23required to be registered under the Illinois Vehicle Code.
24    (20) Photoprocessing machinery and equipment, including
25repair and replacement parts, both new and used, including that
26manufactured on special order, certified by the purchaser to be

 

 

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1used primarily for photoprocessing, and including
2photoprocessing machinery and equipment purchased for lease.
3    (21) Coal and aggregate exploration, mining, off-highway
4hauling, processing, maintenance, and reclamation equipment,
5including replacement parts and equipment, and including
6equipment purchased for lease, but excluding motor vehicles
7required to be registered under the Illinois Vehicle Code. The
8changes made to this Section by Public Act 97-767 apply on and
9after July 1, 2003, but no claim for credit or refund is
10allowed on or after August 16, 2013 (the effective date of
11Public Act 98-456) for such taxes paid during the period
12beginning July 1, 2003 and ending on August 16, 2013 (the
13effective date of Public Act 98-456).
14    (22) Until June 30, 2013, fuel and petroleum products sold
15to or used by an air carrier, certified by the carrier to be
16used for consumption, shipment, or storage in the conduct of
17its business as an air common carrier, for a flight destined
18for or returning from a location or locations outside the
19United States without regard to previous or subsequent domestic
20stopovers.
21    Beginning July 1, 2013, fuel and petroleum products sold to
22or used by an air carrier, certified by the carrier to be used
23for consumption, shipment, or storage in the conduct of its
24business as an air common carrier, for a flight that (i) is
25engaged in foreign trade or is engaged in trade between the
26United States and any of its possessions and (ii) transports at

 

 

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1least one individual or package for hire from the city of
2origination to the city of final destination on the same
3aircraft, without regard to a change in the flight number of
4that aircraft.
5    (23) A transaction in which the purchase order is received
6by a florist who is located outside Illinois, but who has a
7florist located in Illinois deliver the property to the
8purchaser or the purchaser's donee in Illinois.
9    (24) Fuel consumed or used in the operation of ships,
10barges, or vessels that are used primarily in or for the
11transportation of property or the conveyance of persons for
12hire on rivers bordering on this State if the fuel is delivered
13by the seller to the purchaser's barge, ship, or vessel while
14it is afloat upon that bordering river.
15    (25) Except as provided in item (25-5) of this Section, a
16motor vehicle sold in this State to a nonresident even though
17the motor vehicle is delivered to the nonresident in this
18State, if the motor vehicle is not to be titled in this State,
19and if a drive-away permit is issued to the motor vehicle as
20provided in Section 3-603 of the Illinois Vehicle Code or if
21the nonresident purchaser has vehicle registration plates to
22transfer to the motor vehicle upon returning to his or her home
23state. The issuance of the drive-away permit or having the
24out-of-state registration plates to be transferred is prima
25facie evidence that the motor vehicle will not be titled in
26this State.

 

 

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1    (25-5) The exemption under item (25) does not apply if the
2state in which the motor vehicle will be titled does not allow
3a reciprocal exemption for a motor vehicle sold and delivered
4in that state to an Illinois resident but titled in Illinois.
5The tax collected under this Act on the sale of a motor vehicle
6in this State to a resident of another state that does not
7allow a reciprocal exemption shall be imposed at a rate equal
8to the state's rate of tax on taxable property in the state in
9which the purchaser is a resident, except that the tax shall
10not exceed the tax that would otherwise be imposed under this
11Act. At the time of the sale, the purchaser shall execute a
12statement, signed under penalty of perjury, of his or her
13intent to title the vehicle in the state in which the purchaser
14is a resident within 30 days after the sale and of the fact of
15the payment to the State of Illinois of tax in an amount
16equivalent to the state's rate of tax on taxable property in
17his or her state of residence and shall submit the statement to
18the appropriate tax collection agency in his or her state of
19residence. In addition, the retailer must retain a signed copy
20of the statement in his or her records. Nothing in this item
21shall be construed to require the removal of the vehicle from
22this state following the filing of an intent to title the
23vehicle in the purchaser's state of residence if the purchaser
24titles the vehicle in his or her state of residence within 30
25days after the date of sale. The tax collected under this Act
26in accordance with this item (25-5) shall be proportionately

 

 

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1distributed as if the tax were collected at the 6.25% general
2rate imposed under this Act.
3    (25-7) Beginning on July 1, 2007, no tax is imposed under
4this Act on the sale of an aircraft, as defined in Section 3 of
5the Illinois Aeronautics Act, if all of the following
6conditions are met:
7        (1) the aircraft leaves this State within 15 days after
8    the later of either the issuance of the final billing for
9    the sale of the aircraft, or the authorized approval for
10    return to service, completion of the maintenance record
11    entry, and completion of the test flight and ground test
12    for inspection, as required by 14 C.F.R. 91.407;
13        (2) the aircraft is not based or registered in this
14    State after the sale of the aircraft; and
15        (3) the seller retains in his or her books and records
16    and provides to the Department a signed and dated
17    certification from the purchaser, on a form prescribed by
18    the Department, certifying that the requirements of this
19    item (25-7) are met. The certificate must also include the
20    name and address of the purchaser, the address of the
21    location where the aircraft is to be titled or registered,
22    the address of the primary physical location of the
23    aircraft, and other information that the Department may
24    reasonably require.
25    For purposes of this item (25-7):
26    "Based in this State" means hangared, stored, or otherwise

 

 

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1used, excluding post-sale customizations as defined in this
2Section, for 10 or more days in each 12-month period
3immediately following the date of the sale of the aircraft.
4    "Registered in this State" means an aircraft registered
5with the Department of Transportation, Aeronautics Division,
6or titled or registered with the Federal Aviation
7Administration to an address located in this State.
8    This paragraph (25-7) is exempt from the provisions of
9Section 2-70.
10    (26) Semen used for artificial insemination of livestock
11for direct agricultural production.
12    (27) Horses, or interests in horses, registered with and
13meeting the requirements of any of the Arabian Horse Club
14Registry of America, Appaloosa Horse Club, American Quarter
15Horse Association, United States Trotting Association, or
16Jockey Club, as appropriate, used for purposes of breeding or
17racing for prizes. This item (27) is exempt from the provisions
18of Section 2-70, and the exemption provided for under this item
19(27) applies for all periods beginning May 30, 1995, but no
20claim for credit or refund is allowed on or after January 1,
212008 (the effective date of Public Act 95-88) for such taxes
22paid during the period beginning May 30, 2000 and ending on
23January 1, 2008 (the effective date of Public Act 95-88).
24    (28) Computers and communications equipment utilized for
25any hospital purpose and equipment used in the diagnosis,
26analysis, or treatment of hospital patients sold to a lessor

 

 

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1who leases the equipment, under a lease of one year or longer
2executed or in effect at the time of the purchase, to a
3hospital that has been issued an active tax exemption
4identification number by the Department under Section 1g of
5this Act.
6    (29) Personal property sold to a lessor who leases the
7property, under a lease of one year or longer executed or in
8effect at the time of the purchase, to a governmental body that
9has been issued an active tax exemption identification number
10by the Department under Section 1g of this Act.
11    (30) Beginning with taxable years ending on or after
12December 31, 1995 and ending with taxable years ending on or
13before December 31, 2004, personal property that is donated for
14disaster relief to be used in a State or federally declared
15disaster area in Illinois or bordering Illinois by a
16manufacturer or retailer that is registered in this State to a
17corporation, society, association, foundation, or institution
18that has been issued a sales tax exemption identification
19number by the Department that assists victims of the disaster
20who reside within the declared disaster area.
21    (31) Beginning with taxable years ending on or after
22December 31, 1995 and ending with taxable years ending on or
23before December 31, 2004, personal property that is used in the
24performance of infrastructure repairs in this State, including
25but not limited to municipal roads and streets, access roads,
26bridges, sidewalks, waste disposal systems, water and sewer

 

 

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1line extensions, water distribution and purification
2facilities, storm water drainage and retention facilities, and
3sewage treatment facilities, resulting from a State or
4federally declared disaster in Illinois or bordering Illinois
5when such repairs are initiated on facilities located in the
6declared disaster area within 6 months after the disaster.
7    (32) Beginning July 1, 1999, game or game birds sold at a
8"game breeding and hunting preserve area" as that term is used
9in the Wildlife Code. This paragraph is exempt from the
10provisions of Section 2-70.
11    (33) A motor vehicle, as that term is defined in Section
121-146 of the Illinois Vehicle Code, that is donated to a
13corporation, limited liability company, society, association,
14foundation, or institution that is determined by the Department
15to be organized and operated exclusively for educational
16purposes. For purposes of this exemption, "a corporation,
17limited liability company, society, association, foundation,
18or institution organized and operated exclusively for
19educational purposes" means all tax-supported public schools,
20private schools that offer systematic instruction in useful
21branches of learning by methods common to public schools and
22that compare favorably in their scope and intensity with the
23course of study presented in tax-supported schools, and
24vocational or technical schools or institutes organized and
25operated exclusively to provide a course of study of not less
26than 6 weeks duration and designed to prepare individuals to

 

 

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1follow a trade or to pursue a manual, technical, mechanical,
2industrial, business, or commercial occupation.
3    (34) Beginning January 1, 2000, personal property,
4including food, purchased through fundraising events for the
5benefit of a public or private elementary or secondary school,
6a group of those schools, or one or more school districts if
7the events are sponsored by an entity recognized by the school
8district that consists primarily of volunteers and includes
9parents and teachers of the school children. This paragraph
10does not apply to fundraising events (i) for the benefit of
11private home instruction or (ii) for which the fundraising
12entity purchases the personal property sold at the events from
13another individual or entity that sold the property for the
14purpose of resale by the fundraising entity and that profits
15from the sale to the fundraising entity. This paragraph is
16exempt from the provisions of Section 2-70.
17    (35) Beginning January 1, 2000 and through December 31,
182001, new or used automatic vending machines that prepare and
19serve hot food and beverages, including coffee, soup, and other
20items, and replacement parts for these machines. Beginning
21January 1, 2002 and through June 30, 2003, machines and parts
22for machines used in commercial, coin-operated amusement and
23vending business if a use or occupation tax is paid on the
24gross receipts derived from the use of the commercial,
25coin-operated amusement and vending machines. This paragraph
26is exempt from the provisions of Section 2-70.

 

 

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1    (35-5) Beginning August 23, 2001 and through June 30, 2016,
2food for human consumption that is to be consumed off the
3premises where it is sold (other than alcoholic beverages, soft
4drinks, and food that has been prepared for immediate
5consumption) and prescription and nonprescription medicines,
6drugs, medical appliances, and insulin, urine testing
7materials, syringes, and needles used by diabetics, for human
8use, when purchased for use by a person receiving medical
9assistance under Article V of the Illinois Public Aid Code who
10resides in a licensed long-term care facility, as defined in
11the Nursing Home Care Act, or a licensed facility as defined in
12the ID/DD Community Care Act, the MC/DD Act, or the Specialized
13Mental Health Rehabilitation Act of 2013.
14    (36) Beginning August 2, 2001, computers and
15communications equipment utilized for any hospital purpose and
16equipment used in the diagnosis, analysis, or treatment of
17hospital patients sold to a lessor who leases the equipment,
18under a lease of one year or longer executed or in effect at
19the time of the purchase, to a hospital that has been issued an
20active tax exemption identification number by the Department
21under Section 1g of this Act. This paragraph is exempt from the
22provisions of Section 2-70.
23    (37) Beginning August 2, 2001, personal property sold to a
24lessor who leases the property, under a lease of one year or
25longer executed or in effect at the time of the purchase, to a
26governmental body that has been issued an active tax exemption

 

 

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1identification number by the Department under Section 1g of
2this Act. This paragraph is exempt from the provisions of
3Section 2-70.
4    (38) Beginning on January 1, 2002 and through June 30,
52016, tangible personal property purchased from an Illinois
6retailer by a taxpayer engaged in centralized purchasing
7activities in Illinois who will, upon receipt of the property
8in Illinois, temporarily store the property in Illinois (i) for
9the purpose of subsequently transporting it outside this State
10for use or consumption thereafter solely outside this State or
11(ii) for the purpose of being processed, fabricated, or
12manufactured into, attached to, or incorporated into other
13tangible personal property to be transported outside this State
14and thereafter used or consumed solely outside this State. The
15Director of Revenue shall, pursuant to rules adopted in
16accordance with the Illinois Administrative Procedure Act,
17issue a permit to any taxpayer in good standing with the
18Department who is eligible for the exemption under this
19paragraph (38). The permit issued under this paragraph (38)
20shall authorize the holder, to the extent and in the manner
21specified in the rules adopted under this Act, to purchase
22tangible personal property from a retailer exempt from the
23taxes imposed by this Act. Taxpayers shall maintain all
24necessary books and records to substantiate the use and
25consumption of all such tangible personal property outside of
26the State of Illinois.

 

 

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1    (39) Beginning January 1, 2008, tangible personal property
2used in the construction or maintenance of a community water
3supply, as defined under Section 3.145 of the Environmental
4Protection Act, that is operated by a not-for-profit
5corporation that holds a valid water supply permit issued under
6Title IV of the Environmental Protection Act. This paragraph is
7exempt from the provisions of Section 2-70.
8    (40) Beginning January 1, 2010, materials, parts,
9equipment, components, and furnishings incorporated into or
10upon an aircraft as part of the modification, refurbishment,
11completion, replacement, repair, or maintenance of the
12aircraft. This exemption includes consumable supplies used in
13the modification, refurbishment, completion, replacement,
14repair, and maintenance of aircraft, but excludes any
15materials, parts, equipment, components, and consumable
16supplies used in the modification, replacement, repair, and
17maintenance of aircraft engines or power plants, whether such
18engines or power plants are installed or uninstalled upon any
19such aircraft. "Consumable supplies" include, but are not
20limited to, adhesive, tape, sandpaper, general purpose
21lubricants, cleaning solution, latex gloves, and protective
22films. This exemption applies only to the sale of qualifying
23tangible personal property to persons who modify, refurbish,
24complete, replace, or maintain an aircraft and who (i) hold an
25Air Agency Certificate and are empowered to operate an approved
26repair station by the Federal Aviation Administration, (ii)

 

 

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1have a Class IV Rating, and (iii) conduct operations in
2accordance with Part 145 of the Federal Aviation Regulations.
3The exemption does not include aircraft operated by a
4commercial air carrier providing scheduled passenger air
5service pursuant to authority issued under Part 121 or Part 129
6of the Federal Aviation Regulations. The changes made to this
7paragraph (40) by Public Act 98-534 are declarative of existing
8law.
9    (41) Tangible personal property sold to a
10public-facilities corporation, as described in Section
1111-65-10 of the Illinois Municipal Code, for purposes of
12constructing or furnishing a municipal convention hall, but
13only if the legal title to the municipal convention hall is
14transferred to the municipality without any further
15consideration by or on behalf of the municipality at the time
16of the completion of the municipal convention hall or upon the
17retirement or redemption of any bonds or other debt instruments
18issued by the public-facilities corporation in connection with
19the development of the municipal convention hall. This
20exemption includes existing public-facilities corporations as
21provided in Section 11-65-25 of the Illinois Municipal Code.
22This paragraph is exempt from the provisions of Section 2-70.
23(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
2498-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.
251-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.
267-29-15.)
 

 

 

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1    (35 ILCS 120/2-50)  (from Ch. 120, par. 441-50)
2    Sec. 2-50. Rolling stock exemption. Except as provided in
3Section 2-51 of this Act, through June 30, 2016, the the
4rolling stock exemption applies to rolling stock used by an
5interstate carrier for hire, even just between points in
6Illinois, if the rolling stock transports, for hire, persons
7whose journeys or property whose shipments originate or
8terminate outside Illinois.
9(Source: P.A. 93-23, eff. 6-20-03.)
 
10
ARTICLE 40. GASOHOL

 
11    Section 40-5. The Use Tax Act is amended by changing
12Section 3-10 as follows:
 
13    (35 ILCS 105/3-10)
14    Sec. 3-10. Rate of tax. Unless otherwise provided in this
15Section, the tax imposed by this Act is at the rate of 6.25% of
16either the selling price or the fair market value, if any, of
17the tangible personal property. In all cases where property
18functionally used or consumed is the same as the property that
19was purchased at retail, then the tax is imposed on the selling
20price of the property. In all cases where property functionally
21used or consumed is a by-product or waste product that has been
22refined, manufactured, or produced from property purchased at

 

 

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1retail, then the tax is imposed on the lower of the fair market
2value, if any, of the specific property so used in this State
3or on the selling price of the property purchased at retail.
4For purposes of this Section "fair market value" means the
5price at which property would change hands between a willing
6buyer and a willing seller, neither being under any compulsion
7to buy or sell and both having reasonable knowledge of the
8relevant facts. The fair market value shall be established by
9Illinois sales by the taxpayer of the same property as that
10functionally used or consumed, or if there are no such sales by
11the taxpayer, then comparable sales or purchases of property of
12like kind and character in Illinois.
13    Beginning on July 1, 2000 and through December 31, 2000,
14with respect to motor fuel, as defined in Section 1.1 of the
15Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
16the Use Tax Act, the tax is imposed at the rate of 1.25%.
17    Beginning on August 6, 2010 through August 15, 2010, with
18respect to sales tax holiday items as defined in Section 3-6 of
19this Act, the tax is imposed at the rate of 1.25%.
20    With respect to gasohol, the tax imposed by this Act
21applies to (i) 70% of the proceeds of sales made on or after
22January 1, 1990, and before July 1, 2003, (ii) 80% of the
23proceeds of sales made on or after July 1, 2003 and on or
24before December 31, 2015 December 31, 2018, and (iii) 100% of
25the proceeds of sales made thereafter. If, at any time,
26however, the tax under this Act on sales of gasohol is imposed

 

 

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1at the rate of 1.25%, then the tax imposed by this Act applies
2to 100% of the proceeds of sales of gasohol made during that
3time.
4    With respect to majority blended ethanol fuel, the tax
5imposed by this Act does not apply to the proceeds of sales
6made on or after July 1, 2003 and on or before December 31,
72018 but applies to 100% of the proceeds of sales made
8thereafter.
9    With respect to biodiesel blends with no less than 1% and
10no more than 10% biodiesel, the tax imposed by this Act applies
11to (i) 80% of the proceeds of sales made on or after July 1,
122003 and on or before December 31, 2018 and (ii) 100% of the
13proceeds of sales made thereafter. If, at any time, however,
14the tax under this Act on sales of biodiesel blends with no
15less than 1% and no more than 10% biodiesel is imposed at the
16rate of 1.25%, then the tax imposed by this Act applies to 100%
17of the proceeds of sales of biodiesel blends with no less than
181% and no more than 10% biodiesel made during that time.
19    With respect to 100% biodiesel and biodiesel blends with
20more than 10% but no more than 99% biodiesel, the tax imposed
21by this Act does not apply to the proceeds of sales made on or
22after July 1, 2003 and on or before December 31, 2018 but
23applies to 100% of the proceeds of sales made thereafter.
24    With respect to food for human consumption that is to be
25consumed off the premises where it is sold (other than
26alcoholic beverages, soft drinks, and food that has been

 

 

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1prepared for immediate consumption) and prescription and
2nonprescription medicines, drugs, medical appliances,
3modifications to a motor vehicle for the purpose of rendering
4it usable by a person with a disability, and insulin, urine
5testing materials, syringes, and needles used by diabetics, for
6human use, the tax is imposed at the rate of 1%. For the
7purposes of this Section, until September 1, 2009: the term
8"soft drinks" means any complete, finished, ready-to-use,
9non-alcoholic drink, whether carbonated or not, including but
10not limited to soda water, cola, fruit juice, vegetable juice,
11carbonated water, and all other preparations commonly known as
12soft drinks of whatever kind or description that are contained
13in any closed or sealed bottle, can, carton, or container,
14regardless of size; but "soft drinks" does not include coffee,
15tea, non-carbonated water, infant formula, milk or milk
16products as defined in the Grade A Pasteurized Milk and Milk
17Products Act, or drinks containing 50% or more natural fruit or
18vegetable juice.
19    Notwithstanding any other provisions of this Act,
20beginning September 1, 2009, "soft drinks" means non-alcoholic
21beverages that contain natural or artificial sweeteners. "Soft
22drinks" do not include beverages that contain milk or milk
23products, soy, rice or similar milk substitutes, or greater
24than 50% of vegetable or fruit juice by volume.
25    Until August 1, 2009, and notwithstanding any other
26provisions of this Act, "food for human consumption that is to

 

 

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1be consumed off the premises where it is sold" includes all
2food sold through a vending machine, except soft drinks and
3food products that are dispensed hot from a vending machine,
4regardless of the location of the vending machine. Beginning
5August 1, 2009, and notwithstanding any other provisions of
6this Act, "food for human consumption that is to be consumed
7off the premises where it is sold" includes all food sold
8through a vending machine, except soft drinks, candy, and food
9products that are dispensed hot from a vending machine,
10regardless of the location of the vending machine.
11    Notwithstanding any other provisions of this Act,
12beginning September 1, 2009, "food for human consumption that
13is to be consumed off the premises where it is sold" does not
14include candy. For purposes of this Section, "candy" means a
15preparation of sugar, honey, or other natural or artificial
16sweeteners in combination with chocolate, fruits, nuts or other
17ingredients or flavorings in the form of bars, drops, or
18pieces. "Candy" does not include any preparation that contains
19flour or requires refrigeration.
20    Notwithstanding any other provisions of this Act,
21beginning September 1, 2009, "nonprescription medicines and
22drugs" does not include grooming and hygiene products. For
23purposes of this Section, "grooming and hygiene products"
24includes, but is not limited to, soaps and cleaning solutions,
25shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
26lotions and screens, unless those products are available by

 

 

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1prescription only, regardless of whether the products meet the
2definition of "over-the-counter-drugs". For the purposes of
3this paragraph, "over-the-counter-drug" means a drug for human
4use that contains a label that identifies the product as a drug
5as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
6label includes:
7        (A) A "Drug Facts" panel; or
8        (B) A statement of the "active ingredient(s)" with a
9    list of those ingredients contained in the compound,
10    substance or preparation.
11    Beginning on the effective date of this amendatory Act of
12the 98th General Assembly, "prescription and nonprescription
13medicines and drugs" includes medical cannabis purchased from a
14registered dispensing organization under the Compassionate Use
15of Medical Cannabis Pilot Program Act.
16    If the property that is purchased at retail from a retailer
17is acquired outside Illinois and used outside Illinois before
18being brought to Illinois for use here and is taxable under
19this Act, the "selling price" on which the tax is computed
20shall be reduced by an amount that represents a reasonable
21allowance for depreciation for the period of prior out-of-state
22use.
23(Source: P.A. 98-122, eff. 1-1-14; 99-143, eff. 7-27-15.)
 
24    Section 40-10. The Service Use Tax Act is amended by
25changing Section 3-10 as follows:
 

 

 

HB4300- 446 -LRB099 14379 HLH 38474 b

1    (35 ILCS 110/3-10)  (from Ch. 120, par. 439.33-10)
2    Sec. 3-10. Rate of tax. Unless otherwise provided in this
3Section, the tax imposed by this Act is at the rate of 6.25% of
4the selling price of tangible personal property transferred as
5an incident to the sale of service, but, for the purpose of
6computing this tax, in no event shall the selling price be less
7than the cost price of the property to the serviceman.
8    Beginning on July 1, 2000 and through December 31, 2000,
9with respect to motor fuel, as defined in Section 1.1 of the
10Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
11the Use Tax Act, the tax is imposed at the rate of 1.25%.
12    With respect to gasohol, as defined in the Use Tax Act, the
13tax imposed by this Act applies to (i) 70% of the selling price
14of property transferred as an incident to the sale of service
15on or after January 1, 1990, and before July 1, 2003, (ii) 80%
16of the selling price of property transferred as an incident to
17the sale of service on or after July 1, 2003 and on or before
18December 31, 2015 December 31, 2018, and (iii) 100% of the
19selling price thereafter. If, at any time, however, the tax
20under this Act on sales of gasohol, as defined in the Use Tax
21Act, is imposed at the rate of 1.25%, then the tax imposed by
22this Act applies to 100% of the proceeds of sales of gasohol
23made during that time.
24    With respect to majority blended ethanol fuel, as defined
25in the Use Tax Act, the tax imposed by this Act does not apply

 

 

HB4300- 447 -LRB099 14379 HLH 38474 b

1to the selling price of property transferred as an incident to
2the sale of service on or after July 1, 2003 and on or before
3December 31, 2018 but applies to 100% of the selling price
4thereafter.
5    With respect to biodiesel blends, as defined in the Use Tax
6Act, with no less than 1% and no more than 10% biodiesel, the
7tax imposed by this Act applies to (i) 80% of the selling price
8of property transferred as an incident to the sale of service
9on or after July 1, 2003 and on or before December 31, 2018 and
10(ii) 100% of the proceeds of the selling price thereafter. If,
11at any time, however, the tax under this Act on sales of
12biodiesel blends, as defined in the Use Tax Act, with no less
13than 1% and no more than 10% biodiesel is imposed at the rate
14of 1.25%, then the tax imposed by this Act applies to 100% of
15the proceeds of sales of biodiesel blends with no less than 1%
16and no more than 10% biodiesel made during that time.
17    With respect to 100% biodiesel, as defined in the Use Tax
18Act, and biodiesel blends, as defined in the Use Tax Act, with
19more than 10% but no more than 99% biodiesel, the tax imposed
20by this Act does not apply to the proceeds of the selling price
21of property transferred as an incident to the sale of service
22on or after July 1, 2003 and on or before December 31, 2018 but
23applies to 100% of the selling price thereafter.
24    At the election of any registered serviceman made for each
25fiscal year, sales of service in which the aggregate annual
26cost price of tangible personal property transferred as an

 

 

HB4300- 448 -LRB099 14379 HLH 38474 b

1incident to the sales of service is less than 35%, or 75% in
2the case of servicemen transferring prescription drugs or
3servicemen engaged in graphic arts production, of the aggregate
4annual total gross receipts from all sales of service, the tax
5imposed by this Act shall be based on the serviceman's cost
6price of the tangible personal property transferred as an
7incident to the sale of those services.
8    The tax shall be imposed at the rate of 1% on food prepared
9for immediate consumption and transferred incident to a sale of
10service subject to this Act or the Service Occupation Tax Act
11by an entity licensed under the Hospital Licensing Act, the
12Nursing Home Care Act, the ID/DD Community Care Act, the
13Specialized Mental Health Rehabilitation Act of 2013, or the
14Child Care Act of 1969. The tax shall also be imposed at the
15rate of 1% on food for human consumption that is to be consumed
16off the premises where it is sold (other than alcoholic
17beverages, soft drinks, and food that has been prepared for
18immediate consumption and is not otherwise included in this
19paragraph) and prescription and nonprescription medicines,
20drugs, medical appliances, modifications to a motor vehicle for
21the purpose of rendering it usable by a disabled person, and
22insulin, urine testing materials, syringes, and needles used by
23diabetics, for human use. For the purposes of this Section,
24until September 1, 2009: the term "soft drinks" means any
25complete, finished, ready-to-use, non-alcoholic drink, whether
26carbonated or not, including but not limited to soda water,

 

 

HB4300- 449 -LRB099 14379 HLH 38474 b

1cola, fruit juice, vegetable juice, carbonated water, and all
2other preparations commonly known as soft drinks of whatever
3kind or description that are contained in any closed or sealed
4bottle, can, carton, or container, regardless of size; but
5"soft drinks" does not include coffee, tea, non-carbonated
6water, infant formula, milk or milk products as defined in the
7Grade A Pasteurized Milk and Milk Products Act, or drinks
8containing 50% or more natural fruit or vegetable juice.
9    Notwithstanding any other provisions of this Act,
10beginning September 1, 2009, "soft drinks" means non-alcoholic
11beverages that contain natural or artificial sweeteners. "Soft
12drinks" do not include beverages that contain milk or milk
13products, soy, rice or similar milk substitutes, or greater
14than 50% of vegetable or fruit juice by volume.
15    Until August 1, 2009, and notwithstanding any other
16provisions of this Act, "food for human consumption that is to
17be consumed off the premises where it is sold" includes all
18food sold through a vending machine, except soft drinks and
19food products that are dispensed hot from a vending machine,
20regardless of the location of the vending machine. Beginning
21August 1, 2009, and notwithstanding any other provisions of
22this Act, "food for human consumption that is to be consumed
23off the premises where it is sold" includes all food sold
24through a vending machine, except soft drinks, candy, and food
25products that are dispensed hot from a vending machine,
26regardless of the location of the vending machine.

 

 

HB4300- 450 -LRB099 14379 HLH 38474 b

1    Notwithstanding any other provisions of this Act,
2beginning September 1, 2009, "food for human consumption that
3is to be consumed off the premises where it is sold" does not
4include candy. For purposes of this Section, "candy" means a
5preparation of sugar, honey, or other natural or artificial
6sweeteners in combination with chocolate, fruits, nuts or other
7ingredients or flavorings in the form of bars, drops, or
8pieces. "Candy" does not include any preparation that contains
9flour or requires refrigeration.
10    Notwithstanding any other provisions of this Act,
11beginning September 1, 2009, "nonprescription medicines and
12drugs" does not include grooming and hygiene products. For
13purposes of this Section, "grooming and hygiene products"
14includes, but is not limited to, soaps and cleaning solutions,
15shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
16lotions and screens, unless those products are available by
17prescription only, regardless of whether the products meet the
18definition of "over-the-counter-drugs". For the purposes of
19this paragraph, "over-the-counter-drug" means a drug for human
20use that contains a label that identifies the product as a drug
21as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
22label includes:
23        (A) A "Drug Facts" panel; or
24        (B) A statement of the "active ingredient(s)" with a
25    list of those ingredients contained in the compound,
26    substance or preparation.

 

 

HB4300- 451 -LRB099 14379 HLH 38474 b

1    Beginning on January 1, 2014 (the effective date of Public
2Act 98-122), "prescription and nonprescription medicines and
3drugs" includes medical cannabis purchased from a registered
4dispensing organization under the Compassionate Use of Medical
5Cannabis Pilot Program Act.
6    If the property that is acquired from a serviceman is
7acquired outside Illinois and used outside Illinois before
8being brought to Illinois for use here and is taxable under
9this Act, the "selling price" on which the tax is computed
10shall be reduced by an amount that represents a reasonable
11allowance for depreciation for the period of prior out-of-state
12use.
13(Source: P.A. 97-38, eff. 6-28-11; 97-227, eff. 1-1-12; 97-636,
14eff. 6-1-12; 98-104, eff. 7-22-13; 98-122, eff. 1-1-14; 98-756,
15eff. 7-16-14.)
 
16    Section 40-15. The Service Occupation Tax Act is amended by
17changing Section 3-10 as follows:
 
18    (35 ILCS 115/3-10)  (from Ch. 120, par. 439.103-10)
19    Sec. 3-10. Rate of tax. Unless otherwise provided in this
20Section, the tax imposed by this Act is at the rate of 6.25% of
21the "selling price", as defined in Section 2 of the Service Use
22Tax Act, of the tangible personal property. For the purpose of
23computing this tax, in no event shall the "selling price" be
24less than the cost price to the serviceman of the tangible

 

 

HB4300- 452 -LRB099 14379 HLH 38474 b

1personal property transferred. The selling price of each item
2of tangible personal property transferred as an incident of a
3sale of service may be shown as a distinct and separate item on
4the serviceman's billing to the service customer. If the
5selling price is not so shown, the selling price of the
6tangible personal property is deemed to be 50% of the
7serviceman's entire billing to the service customer. When,
8however, a serviceman contracts to design, develop, and produce
9special order machinery or equipment, the tax imposed by this
10Act shall be based on the serviceman's cost price of the
11tangible personal property transferred incident to the
12completion of the contract.
13    Beginning on July 1, 2000 and through December 31, 2000,
14with respect to motor fuel, as defined in Section 1.1 of the
15Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
16the Use Tax Act, the tax is imposed at the rate of 1.25%.
17    With respect to gasohol, as defined in the Use Tax Act, the
18tax imposed by this Act shall apply to (i) 70% of the cost
19price of property transferred as an incident to the sale of
20service on or after January 1, 1990, and before July 1, 2003,
21(ii) 80% of the selling price of property transferred as an
22incident to the sale of service on or after July 1, 2003 and on
23or before December 31, 2015 December 31, 2018, and (iii) 100%
24of the cost price thereafter. If, at any time, however, the tax
25under this Act on sales of gasohol, as defined in the Use Tax
26Act, is imposed at the rate of 1.25%, then the tax imposed by

 

 

HB4300- 453 -LRB099 14379 HLH 38474 b

1this Act applies to 100% of the proceeds of sales of gasohol
2made during that time.
3    With respect to majority blended ethanol fuel, as defined
4in the Use Tax Act, the tax imposed by this Act does not apply
5to the selling price of property transferred as an incident to
6the sale of service on or after July 1, 2003 and on or before
7December 31, 2018 but applies to 100% of the selling price
8thereafter.
9    With respect to biodiesel blends, as defined in the Use Tax
10Act, with no less than 1% and no more than 10% biodiesel, the
11tax imposed by this Act applies to (i) 80% of the selling price
12of property transferred as an incident to the sale of service
13on or after July 1, 2003 and on or before December 31, 2018 and
14(ii) 100% of the proceeds of the selling price thereafter. If,
15at any time, however, the tax under this Act on sales of
16biodiesel blends, as defined in the Use Tax Act, with no less
17than 1% and no more than 10% biodiesel is imposed at the rate
18of 1.25%, then the tax imposed by this Act applies to 100% of
19the proceeds of sales of biodiesel blends with no less than 1%
20and no more than 10% biodiesel made during that time.
21    With respect to 100% biodiesel, as defined in the Use Tax
22Act, and biodiesel blends, as defined in the Use Tax Act, with
23more than 10% but no more than 99% biodiesel material, the tax
24imposed by this Act does not apply to the proceeds of the
25selling price of property transferred as an incident to the
26sale of service on or after July 1, 2003 and on or before

 

 

HB4300- 454 -LRB099 14379 HLH 38474 b

1December 31, 2018 but applies to 100% of the selling price
2thereafter.
3    At the election of any registered serviceman made for each
4fiscal year, sales of service in which the aggregate annual
5cost price of tangible personal property transferred as an
6incident to the sales of service is less than 35%, or 75% in
7the case of servicemen transferring prescription drugs or
8servicemen engaged in graphic arts production, of the aggregate
9annual total gross receipts from all sales of service, the tax
10imposed by this Act shall be based on the serviceman's cost
11price of the tangible personal property transferred incident to
12the sale of those services.
13    The tax shall be imposed at the rate of 1% on food prepared
14for immediate consumption and transferred incident to a sale of
15service subject to this Act or the Service Occupation Tax Act
16by an entity licensed under the Hospital Licensing Act, the
17Nursing Home Care Act, the ID/DD Community Care Act, the
18Specialized Mental Health Rehabilitation Act of 2013, or the
19Child Care Act of 1969. The tax shall also be imposed at the
20rate of 1% on food for human consumption that is to be consumed
21off the premises where it is sold (other than alcoholic
22beverages, soft drinks, and food that has been prepared for
23immediate consumption and is not otherwise included in this
24paragraph) and prescription and nonprescription medicines,
25drugs, medical appliances, modifications to a motor vehicle for
26the purpose of rendering it usable by a disabled person, and

 

 

HB4300- 455 -LRB099 14379 HLH 38474 b

1insulin, urine testing materials, syringes, and needles used by
2diabetics, for human use. For the purposes of this Section,
3until September 1, 2009: the term "soft drinks" means any
4complete, finished, ready-to-use, non-alcoholic drink, whether
5carbonated or not, including but not limited to soda water,
6cola, fruit juice, vegetable juice, carbonated water, and all
7other preparations commonly known as soft drinks of whatever
8kind or description that are contained in any closed or sealed
9can, carton, or container, regardless of size; but "soft
10drinks" does not include coffee, tea, non-carbonated water,
11infant formula, milk or milk products as defined in the Grade A
12Pasteurized Milk and Milk Products Act, or drinks containing
1350% or more natural fruit or vegetable juice.
14    Notwithstanding any other provisions of this Act,
15beginning September 1, 2009, "soft drinks" means non-alcoholic
16beverages that contain natural or artificial sweeteners. "Soft
17drinks" do not include beverages that contain milk or milk
18products, soy, rice or similar milk substitutes, or greater
19than 50% of vegetable or fruit juice by volume.
20    Until August 1, 2009, and notwithstanding any other
21provisions of this Act, "food for human consumption that is to
22be consumed off the premises where it is sold" includes all
23food sold through a vending machine, except soft drinks and
24food products that are dispensed hot from a vending machine,
25regardless of the location of the vending machine. Beginning
26August 1, 2009, and notwithstanding any other provisions of

 

 

HB4300- 456 -LRB099 14379 HLH 38474 b

1this Act, "food for human consumption that is to be consumed
2off the premises where it is sold" includes all food sold
3through a vending machine, except soft drinks, candy, and food
4products that are dispensed hot from a vending machine,
5regardless of the location of the vending machine.
6    Notwithstanding any other provisions of this Act,
7beginning September 1, 2009, "food for human consumption that
8is to be consumed off the premises where it is sold" does not
9include candy. For purposes of this Section, "candy" means a
10preparation of sugar, honey, or other natural or artificial
11sweeteners in combination with chocolate, fruits, nuts or other
12ingredients or flavorings in the form of bars, drops, or
13pieces. "Candy" does not include any preparation that contains
14flour or requires refrigeration.
15    Notwithstanding any other provisions of this Act,
16beginning September 1, 2009, "nonprescription medicines and
17drugs" does not include grooming and hygiene products. For
18purposes of this Section, "grooming and hygiene products"
19includes, but is not limited to, soaps and cleaning solutions,
20shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
21lotions and screens, unless those products are available by
22prescription only, regardless of whether the products meet the
23definition of "over-the-counter-drugs". For the purposes of
24this paragraph, "over-the-counter-drug" means a drug for human
25use that contains a label that identifies the product as a drug
26as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"

 

 

HB4300- 457 -LRB099 14379 HLH 38474 b

1label includes:
2        (A) A "Drug Facts" panel; or
3        (B) A statement of the "active ingredient(s)" with a
4    list of those ingredients contained in the compound,
5    substance or preparation.
6    Beginning on January 1, 2014 (the effective date of Public
7Act 98-122), "prescription and nonprescription medicines and
8drugs" includes medical cannabis purchased from a registered
9dispensing organization under the Compassionate Use of Medical
10Cannabis Pilot Program Act.
11(Source: P.A. 97-38, eff. 6-28-11; 97-227, eff. 1-1-12; 97-636,
12eff. 6-1-12; 98-104, eff. 7-22-13; 98-122, eff. 1-1-14; 98-756,
13eff. 7-16-14.)
 
14    Section 40-20. The Retailers' Occupation Tax Act is amended
15by changing Section 2-10 as follows:
 
16    (35 ILCS 120/2-10)
17    Sec. 2-10. Rate of tax. Unless otherwise provided in this
18Section, the tax imposed by this Act is at the rate of 6.25% of
19gross receipts from sales of tangible personal property made in
20the course of business.
21    Beginning on July 1, 2000 and through December 31, 2000,
22with respect to motor fuel, as defined in Section 1.1 of the
23Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
24the Use Tax Act, the tax is imposed at the rate of 1.25%.

 

 

HB4300- 458 -LRB099 14379 HLH 38474 b

1    Beginning on August 6, 2010 through August 15, 2010, with
2respect to sales tax holiday items as defined in Section 2-8 of
3this Act, the tax is imposed at the rate of 1.25%.
4    Within 14 days after the effective date of this amendatory
5Act of the 91st General Assembly, each retailer of motor fuel
6and gasohol shall cause the following notice to be posted in a
7prominently visible place on each retail dispensing device that
8is used to dispense motor fuel or gasohol in the State of
9Illinois: "As of July 1, 2000, the State of Illinois has
10eliminated the State's share of sales tax on motor fuel and
11gasohol through December 31, 2000. The price on this pump
12should reflect the elimination of the tax." The notice shall be
13printed in bold print on a sign that is no smaller than 4
14inches by 8 inches. The sign shall be clearly visible to
15customers. Any retailer who fails to post or maintain a
16required sign through December 31, 2000 is guilty of a petty
17offense for which the fine shall be $500 per day per each
18retail premises where a violation occurs.
19    With respect to gasohol, as defined in the Use Tax Act, the
20tax imposed by this Act applies to (i) 70% of the proceeds of
21sales made on or after January 1, 1990, and before July 1,
222003, (ii) 80% of the proceeds of sales made on or after July
231, 2003 and on or before December 31, 2015 December 31, 2018,
24and (iii) 100% of the proceeds of sales made thereafter. If, at
25any time, however, the tax under this Act on sales of gasohol,
26as defined in the Use Tax Act, is imposed at the rate of 1.25%,

 

 

HB4300- 459 -LRB099 14379 HLH 38474 b

1then the tax imposed by this Act applies to 100% of the
2proceeds of sales of gasohol made during that time.
3    With respect to majority blended ethanol fuel, as defined
4in the Use Tax Act, the tax imposed by this Act does not apply
5to the proceeds of sales made on or after July 1, 2003 and on or
6before December 31, 2018 but applies to 100% of the proceeds of
7sales made thereafter.
8    With respect to biodiesel blends, as defined in the Use Tax
9Act, with no less than 1% and no more than 10% biodiesel, the
10tax imposed by this Act applies to (i) 80% of the proceeds of
11sales made on or after July 1, 2003 and on or before December
1231, 2018 and (ii) 100% of the proceeds of sales made
13thereafter. If, at any time, however, the tax under this Act on
14sales of biodiesel blends, as defined in the Use Tax Act, with
15no less than 1% and no more than 10% biodiesel is imposed at
16the rate of 1.25%, then the tax imposed by this Act applies to
17100% of the proceeds of sales of biodiesel blends with no less
18than 1% and no more than 10% biodiesel made during that time.
19    With respect to 100% biodiesel, as defined in the Use Tax
20Act, and biodiesel blends, as defined in the Use Tax Act, with
21more than 10% but no more than 99% biodiesel, the tax imposed
22by this Act does not apply to the proceeds of sales made on or
23after July 1, 2003 and on or before December 31, 2018 but
24applies to 100% of the proceeds of sales made thereafter.
25    With respect to food for human consumption that is to be
26consumed off the premises where it is sold (other than

 

 

HB4300- 460 -LRB099 14379 HLH 38474 b

1alcoholic beverages, soft drinks, and food that has been
2prepared for immediate consumption) and prescription and
3nonprescription medicines, drugs, medical appliances,
4modifications to a motor vehicle for the purpose of rendering
5it usable by a person with a disability, and insulin, urine
6testing materials, syringes, and needles used by diabetics, for
7human use, the tax is imposed at the rate of 1%. For the
8purposes of this Section, until September 1, 2009: the term
9"soft drinks" means any complete, finished, ready-to-use,
10non-alcoholic drink, whether carbonated or not, including but
11not limited to soda water, cola, fruit juice, vegetable juice,
12carbonated water, and all other preparations commonly known as
13soft drinks of whatever kind or description that are contained
14in any closed or sealed bottle, can, carton, or container,
15regardless of size; but "soft drinks" does not include coffee,
16tea, non-carbonated water, infant formula, milk or milk
17products as defined in the Grade A Pasteurized Milk and Milk
18Products Act, or drinks containing 50% or more natural fruit or
19vegetable juice.
20    Notwithstanding any other provisions of this Act,
21beginning September 1, 2009, "soft drinks" means non-alcoholic
22beverages that contain natural or artificial sweeteners. "Soft
23drinks" do not include beverages that contain milk or milk
24products, soy, rice or similar milk substitutes, or greater
25than 50% of vegetable or fruit juice by volume.
26    Until August 1, 2009, and notwithstanding any other

 

 

HB4300- 461 -LRB099 14379 HLH 38474 b

1provisions of this Act, "food for human consumption that is to
2be consumed off the premises where it is sold" includes all
3food sold through a vending machine, except soft drinks and
4food products that are dispensed hot from a vending machine,
5regardless of the location of the vending machine. Beginning
6August 1, 2009, and notwithstanding any other provisions of
7this Act, "food for human consumption that is to be consumed
8off the premises where it is sold" includes all food sold
9through a vending machine, except soft drinks, candy, and food
10products that are dispensed hot from a vending machine,
11regardless of the location of the vending machine.
12    Notwithstanding any other provisions of this Act,
13beginning September 1, 2009, "food for human consumption that
14is to be consumed off the premises where it is sold" does not
15include candy. For purposes of this Section, "candy" means a
16preparation of sugar, honey, or other natural or artificial
17sweeteners in combination with chocolate, fruits, nuts or other
18ingredients or flavorings in the form of bars, drops, or
19pieces. "Candy" does not include any preparation that contains
20flour or requires refrigeration.
21    Notwithstanding any other provisions of this Act,
22beginning September 1, 2009, "nonprescription medicines and
23drugs" does not include grooming and hygiene products. For
24purposes of this Section, "grooming and hygiene products"
25includes, but is not limited to, soaps and cleaning solutions,
26shampoo, toothpaste, mouthwash, antiperspirants, and sun tan

 

 

HB4300- 462 -LRB099 14379 HLH 38474 b

1lotions and screens, unless those products are available by
2prescription only, regardless of whether the products meet the
3definition of "over-the-counter-drugs". For the purposes of
4this paragraph, "over-the-counter-drug" means a drug for human
5use that contains a label that identifies the product as a drug
6as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
7label includes:
8        (A) A "Drug Facts" panel; or
9        (B) A statement of the "active ingredient(s)" with a
10    list of those ingredients contained in the compound,
11    substance or preparation.
12    Beginning on the effective date of this amendatory Act of
13the 98th General Assembly, "prescription and nonprescription
14medicines and drugs" includes medical cannabis purchased from a
15registered dispensing organization under the Compassionate Use
16of Medical Cannabis Pilot Program Act.
17(Source: P.A. 98-122, eff. 1-1-14; 99-143, eff. 7-27-15.)
 
18
ARTICLE 45. ENTERPRISE ZONES

 
19    Section 45-5. The Illinois Enterprise Zone Act is amended
20by changing Section 5.3 as follows:
 
21    (20 ILCS 655/5.3)  (from Ch. 67 1/2, par. 608)
22    Sec. 5.3. Certification of Enterprise Zones; Effective
23date.

 

 

HB4300- 463 -LRB099 14379 HLH 38474 b

1    (a) Certification of Board-approved designated Enterprise
2Zones shall be made by the Department by certification of the
3designating ordinance. The Department shall promptly issue a
4certificate for each Enterprise Zone upon approval by the
5Board. The certificate shall be signed by the Director of the
6Department, shall make specific reference to the designating
7ordinance, which shall be attached thereto, and shall be filed
8in the office of the Secretary of State. A certified copy of
9the Enterprise Zone Certificate, or a duplicate original
10thereof, shall be recorded in the office of recorder of deeds
11of the county in which the Enterprise Zone lies.
12    (b) An Enterprise Zone shall be effective on January 1 of
13the first calendar year after Department certification. The
14Department shall transmit a copy of the certification to the
15Department of Revenue, and to the designating municipality or
16county.
17    Upon certification of an Enterprise Zone, the terms and
18provisions of the designating ordinance shall be in effect, and
19may not be amended or repealed except in accordance with
20Section 5.4.
21    (c) With the exception of Enterprise Zones scheduled to
22expire before December 31, 2018, an Enterprise Zone designated
23before the effective date of this amendatory Act of the 97th
24General Assembly shall be in effect for 30 calendar years, or
25for a lesser number of years specified in the certified
26designating ordinance. Notwithstanding the foregoing, any

 

 

HB4300- 464 -LRB099 14379 HLH 38474 b

1Enterprise Zone in existence on the effective date of this
2amendatory Act of the 98th General Assembly that has a term of
320 calendar years may be extended for an additional 10 calendar
4years upon amendment of the designating ordinance by the
5designating municipality or county and submission of the
6ordinance to the Department. The amended ordinance must be
7properly recorded in the Office of Recorder of Deeds of each
8county in which the Enterprise Zone lies. Each Enterprise Zone
9in existence on the effective date of this amendatory Act of
10the 97th General Assembly that is scheduled to expire before
11July 1, 2016 may have its termination date extended until July
121, 2016 upon amendment of the designating ordinance by the
13designating municipality or county extending the termination
14date to July 1, 2016 and submission of the ordinance to the
15Department. The amended ordinance must be properly recorded in
16the Office of Recorder of Deeds of each county in which the
17Enterprise Zone lies. An Enterprise Zone designated on or after
18the effective date of this amendatory Act of the 97th General
19Assembly shall be in effect for a term of 15 calendar years, or
20for a lesser number of years specified in the certified
21designating ordinance. An enterprise zone designated on or
22after the effective date of this amendatory Act of the 97th
23General Assembly shall be subject to review by the Board after
2413 years for an additional 10-year designation beginning on the
25expiration date of the enterprise zone. During the review
26process, the Board shall consider the costs incurred by the

 

 

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1State and units of local government as a result of tax benefits
2received by the enterprise zone. Enterprise Zones shall
3terminate at midnight of December 31 of the final calendar year
4of the certified term, except as provided in Section 5.4.
5    (d) No more than 12 Enterprise Zones may be certified by
6the Department in calendar year 1984, no more than 12
7Enterprise Zones may be certified by the Department in calendar
8year 1985, no more than 13 Enterprise Zones may be certified by
9the Department in calendar year 1986, no more than 15
10Enterprise Zones may be certified by the Department in calendar
11year 1987, and no more than 20 Enterprise Zones may be
12certified by the Department in calendar year 1990. In other
13calendar years, no more than 13 Enterprise Zones may be
14certified by the Department. The Department may also designate
15up to 8 additional Enterprise Zones outside the regular
16application cycle if warranted by the extreme economic
17circumstances as determined by the Department. The Department
18may also designate one additional Enterprise Zone outside the
19regular application cycle if an aircraft manufacturer agrees to
20locate an aircraft manufacturing facility in the proposed
21Enterprise Zone. Notwithstanding any other provision of this
22Act, no more than 89 Enterprise Zones may be certified by the
23Department for the 10 calendar years commencing with 1983. The
247 additional Enterprise Zones authorized by Public Act 86-15
25shall not lie within municipalities or unincorporated areas of
26counties that abut or are contiguous to Enterprise Zones

 

 

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1certified pursuant to this Section prior to June 30, 1989. The
27 additional Enterprise Zones (excluding the additional
3Enterprise Zone which may be designated outside the regular
4application cycle) authorized by Public Act 86-1030 shall not
5lie within municipalities or unincorporated areas of counties
6that abut or are contiguous to Enterprise Zones certified
7pursuant to this Section prior to February 28, 1990. Beginning
8in calendar year 2004 and until December 31, 2008, one
9additional enterprise zone may be certified by the Department.
10In any calendar year, the Department may not certify more than
113 Zones located within the same municipality. The Department
12may certify Enterprise Zones in each of the 10 calendar years
13commencing with 1983. The Department may not certify more than
14a total of 18 Enterprise Zones located within the same county
15(whether within municipalities or within unincorporated
16territory) for the 10 calendar years commencing with 1983.
17Thereafter, the Department may not certify any additional
18Enterprise Zones, but may amend and rescind certifications of
19existing Enterprise Zones in accordance with Section 5.4.
20    (e) Notwithstanding any other provision of law, if (i) the
21county board of any county in which a current military base is
22located, in part or in whole, or in which a military base that
23has been closed within 20 years of the effective date of this
24amendatory Act of 1998 is located, in part or in whole, adopts
25a designating ordinance in accordance with Section 5 of this
26Act to designate the military base in that county as an

 

 

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1enterprise zone and (ii) the property otherwise meets the
2qualifications for an enterprise zone as prescribed in Section
34 of this Act, then the Department may certify the designating
4ordinance or ordinances, as the case may be.
5    (f) Applications for Enterprise Zones that are scheduled to
6expire in 2016, including Enterprise Zones that have been
7extended until 2016 by this amendatory Act of the 97th General
8Assembly, shall be submitted to the Department no later than
9December 31, 2014. At that time, the Zone becomes available for
10either the previously designated area or a different area to
11compete for designation. No preference for designation as a
12Zone will be given to the previously designated area.
13    For Enterprise Zones that are scheduled to expire on or
14after January 1, 2017, an application process shall begin 2
15years prior to the year in which the Zone expires. At that
16time, the Zone becomes available for either the previously
17designated area or a different area to compete for designation.
18No preference for designation as a Zone will be given to the
19previously designated area.
20    Each Enterprise Zone that reapplies for certification but
21does not receive a new certification shall expire on its
22scheduled termination date.
23    (g) Notwithstanding any other provision of law, no new
24Enterprise Zone shall be certified on or after the effective
25date of this amendatory Act of the 99th General Assembly, and
26no Enterprise Zone certified prior to the effective date of

 

 

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1this amendatory Act of the 99th General Assembly shall be
2renewed or extended on or after the effective date of this
3amendatory Act of the 99th General Assembly.
4(Source: P.A. 97-905, eff. 8-7-12; 98-109, eff. 7-25-13.)
 
5
ARTICLE 50. VENDOR DISCOUNTS

 
6    Section 50-5. The Use Tax Act is amended by changing
7Section 9 as follows:
 
8    (35 ILCS 105/9)  (from Ch. 120, par. 439.9)
9    Sec. 9. Except as to motor vehicles, watercraft, aircraft,
10and trailers that are required to be registered with an agency
11of this State, each retailer required or authorized to collect
12the tax imposed by this Act shall pay to the Department the
13amount of such tax (except as otherwise provided) at the time
14when he is required to file his return for the period during
15which such tax was collected, less a discount of 2.1% prior to
16January 1, 1990, and 1.75% on and after January 1, 1990 and
17prior to July 1, 2016, and 0.75% on and after July 1, 2016, or
18$5 per calendar year, whichever is greater, which is allowed to
19reimburse the retailer for expenses incurred in collecting the
20tax, keeping records, preparing and filing returns, remitting
21the tax and supplying data to the Department on request. In the
22case of retailers who report and pay the tax on a transaction
23by transaction basis, as provided in this Section, such

 

 

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1discount shall be taken with each such tax remittance instead
2of when such retailer files his periodic return. The Department
3may disallow the discount for retailers whose certificate of
4registration is revoked at the time the return is filed, but
5only if the Department's decision to revoke the certificate of
6registration has become final. A retailer need not remit that
7part of any tax collected by him to the extent that he is
8required to remit and does remit the tax imposed by the
9Retailers' Occupation Tax Act, with respect to the sale of the
10same property.
11    Where such tangible personal property is sold under a
12conditional sales contract, or under any other form of sale
13wherein the payment of the principal sum, or a part thereof, is
14extended beyond the close of the period for which the return is
15filed, the retailer, in collecting the tax (except as to motor
16vehicles, watercraft, aircraft, and trailers that are required
17to be registered with an agency of this State), may collect for
18each tax return period, only the tax applicable to that part of
19the selling price actually received during such tax return
20period.
21    Except as provided in this Section, on or before the
22twentieth day of each calendar month, such retailer shall file
23a return for the preceding calendar month. Such return shall be
24filed on forms prescribed by the Department and shall furnish
25such information as the Department may reasonably require.
26    The Department may require returns to be filed on a

 

 

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1quarterly basis. If so required, a return for each calendar
2quarter shall be filed on or before the twentieth day of the
3calendar month following the end of such calendar quarter. The
4taxpayer shall also file a return with the Department for each
5of the first two months of each calendar quarter, on or before
6the twentieth day of the following calendar month, stating:
7        1. The name of the seller;
8        2. The address of the principal place of business from
9    which he engages in the business of selling tangible
10    personal property at retail in this State;
11        3. The total amount of taxable receipts received by him
12    during the preceding calendar month from sales of tangible
13    personal property by him during such preceding calendar
14    month, including receipts from charge and time sales, but
15    less all deductions allowed by law;
16        4. The amount of credit provided in Section 2d of this
17    Act;
18        5. The amount of tax due;
19        5-5. The signature of the taxpayer; and
20        6. Such other reasonable information as the Department
21    may require.
22    If a taxpayer fails to sign a return within 30 days after
23the proper notice and demand for signature by the Department,
24the return shall be considered valid and any amount shown to be
25due on the return shall be deemed assessed.
26    Beginning October 1, 1993, a taxpayer who has an average

 

 

HB4300- 471 -LRB099 14379 HLH 38474 b

1monthly tax liability of $150,000 or more shall make all
2payments required by rules of the Department by electronic
3funds transfer. Beginning October 1, 1994, a taxpayer who has
4an average monthly tax liability of $100,000 or more shall make
5all payments required by rules of the Department by electronic
6funds transfer. Beginning October 1, 1995, a taxpayer who has
7an average monthly tax liability of $50,000 or more shall make
8all payments required by rules of the Department by electronic
9funds transfer. Beginning October 1, 2000, a taxpayer who has
10an annual tax liability of $200,000 or more shall make all
11payments required by rules of the Department by electronic
12funds transfer. The term "annual tax liability" shall be the
13sum of the taxpayer's liabilities under this Act, and under all
14other State and local occupation and use tax laws administered
15by the Department, for the immediately preceding calendar year.
16The term "average monthly tax liability" means the sum of the
17taxpayer's liabilities under this Act, and under all other
18State and local occupation and use tax laws administered by the
19Department, for the immediately preceding calendar year
20divided by 12. Beginning on October 1, 2002, a taxpayer who has
21a tax liability in the amount set forth in subsection (b) of
22Section 2505-210 of the Department of Revenue Law shall make
23all payments required by rules of the Department by electronic
24funds transfer.
25    Before August 1 of each year beginning in 1993, the
26Department shall notify all taxpayers required to make payments

 

 

HB4300- 472 -LRB099 14379 HLH 38474 b

1by electronic funds transfer. All taxpayers required to make
2payments by electronic funds transfer shall make those payments
3for a minimum of one year beginning on October 1.
4    Any taxpayer not required to make payments by electronic
5funds transfer may make payments by electronic funds transfer
6with the permission of the Department.
7    All taxpayers required to make payment by electronic funds
8transfer and any taxpayers authorized to voluntarily make
9payments by electronic funds transfer shall make those payments
10in the manner authorized by the Department.
11    The Department shall adopt such rules as are necessary to
12effectuate a program of electronic funds transfer and the
13requirements of this Section.
14    Before October 1, 2000, if the taxpayer's average monthly
15tax liability to the Department under this Act, the Retailers'
16Occupation Tax Act, the Service Occupation Tax Act, the Service
17Use Tax Act was $10,000 or more during the preceding 4 complete
18calendar quarters, he shall file a return with the Department
19each month by the 20th day of the month next following the
20month during which such tax liability is incurred and shall
21make payments to the Department on or before the 7th, 15th,
2222nd and last day of the month during which such liability is
23incurred. On and after October 1, 2000, if the taxpayer's
24average monthly tax liability to the Department under this Act,
25the Retailers' Occupation Tax Act, the Service Occupation Tax
26Act, and the Service Use Tax Act was $20,000 or more during the

 

 

HB4300- 473 -LRB099 14379 HLH 38474 b

1preceding 4 complete calendar quarters, he shall file a return
2with the Department each month by the 20th day of the month
3next following the month during which such tax liability is
4incurred and shall make payment to the Department on or before
5the 7th, 15th, 22nd and last day of the month during which such
6liability is incurred. If the month during which such tax
7liability is incurred began prior to January 1, 1985, each
8payment shall be in an amount equal to 1/4 of the taxpayer's
9actual liability for the month or an amount set by the
10Department not to exceed 1/4 of the average monthly liability
11of the taxpayer to the Department for the preceding 4 complete
12calendar quarters (excluding the month of highest liability and
13the month of lowest liability in such 4 quarter period). If the
14month during which such tax liability is incurred begins on or
15after January 1, 1985, and prior to January 1, 1987, each
16payment shall be in an amount equal to 22.5% of the taxpayer's
17actual liability for the month or 27.5% of the taxpayer's
18liability for the same calendar month of the preceding year. If
19the month during which such tax liability is incurred begins on
20or after January 1, 1987, and prior to January 1, 1988, each
21payment shall be in an amount equal to 22.5% of the taxpayer's
22actual liability for the month or 26.25% of the taxpayer's
23liability for the same calendar month of the preceding year. If
24the month during which such tax liability is incurred begins on
25or after January 1, 1988, and prior to January 1, 1989, or
26begins on or after January 1, 1996, each payment shall be in an

 

 

HB4300- 474 -LRB099 14379 HLH 38474 b

1amount equal to 22.5% of the taxpayer's actual liability for
2the month or 25% of the taxpayer's liability for the same
3calendar month of the preceding year. If the month during which
4such tax liability is incurred begins on or after January 1,
51989, and prior to January 1, 1996, each payment shall be in an
6amount equal to 22.5% of the taxpayer's actual liability for
7the month or 25% of the taxpayer's liability for the same
8calendar month of the preceding year or 100% of the taxpayer's
9actual liability for the quarter monthly reporting period. The
10amount of such quarter monthly payments shall be credited
11against the final tax liability of the taxpayer's return for
12that month. Before October 1, 2000, once applicable, the
13requirement of the making of quarter monthly payments to the
14Department shall continue until such taxpayer's average
15monthly liability to the Department during the preceding 4
16complete calendar quarters (excluding the month of highest
17liability and the month of lowest liability) is less than
18$9,000, or until such taxpayer's average monthly liability to
19the Department as computed for each calendar quarter of the 4
20preceding complete calendar quarter period is less than
21$10,000. However, if a taxpayer can show the Department that a
22substantial change in the taxpayer's business has occurred
23which causes the taxpayer to anticipate that his average
24monthly tax liability for the reasonably foreseeable future
25will fall below the $10,000 threshold stated above, then such
26taxpayer may petition the Department for change in such

 

 

HB4300- 475 -LRB099 14379 HLH 38474 b

1taxpayer's reporting status. On and after October 1, 2000, once
2applicable, the requirement of the making of quarter monthly
3payments to the Department shall continue until such taxpayer's
4average monthly liability to the Department during the
5preceding 4 complete calendar quarters (excluding the month of
6highest liability and the month of lowest liability) is less
7than $19,000 or until such taxpayer's average monthly liability
8to the Department as computed for each calendar quarter of the
94 preceding complete calendar quarter period is less than
10$20,000. However, if a taxpayer can show the Department that a
11substantial change in the taxpayer's business has occurred
12which causes the taxpayer to anticipate that his average
13monthly tax liability for the reasonably foreseeable future
14will fall below the $20,000 threshold stated above, then such
15taxpayer may petition the Department for a change in such
16taxpayer's reporting status. The Department shall change such
17taxpayer's reporting status unless it finds that such change is
18seasonal in nature and not likely to be long term. If any such
19quarter monthly payment is not paid at the time or in the
20amount required by this Section, then the taxpayer shall be
21liable for penalties and interest on the difference between the
22minimum amount due and the amount of such quarter monthly
23payment actually and timely paid, except insofar as the
24taxpayer has previously made payments for that month to the
25Department in excess of the minimum payments previously due as
26provided in this Section. The Department shall make reasonable

 

 

HB4300- 476 -LRB099 14379 HLH 38474 b

1rules and regulations to govern the quarter monthly payment
2amount and quarter monthly payment dates for taxpayers who file
3on other than a calendar monthly basis.
4    If any such payment provided for in this Section exceeds
5the taxpayer's liabilities under this Act, the Retailers'
6Occupation Tax Act, the Service Occupation Tax Act and the
7Service Use Tax Act, as shown by an original monthly return,
8the Department shall issue to the taxpayer a credit memorandum
9no later than 30 days after the date of payment, which
10memorandum may be submitted by the taxpayer to the Department
11in payment of tax liability subsequently to be remitted by the
12taxpayer to the Department or be assigned by the taxpayer to a
13similar taxpayer under this Act, the Retailers' Occupation Tax
14Act, the Service Occupation Tax Act or the Service Use Tax Act,
15in accordance with reasonable rules and regulations to be
16prescribed by the Department, except that if such excess
17payment is shown on an original monthly return and is made
18after December 31, 1986, no credit memorandum shall be issued,
19unless requested by the taxpayer. If no such request is made,
20the taxpayer may credit such excess payment against tax
21liability subsequently to be remitted by the taxpayer to the
22Department under this Act, the Retailers' Occupation Tax Act,
23the Service Occupation Tax Act or the Service Use Tax Act, in
24accordance with reasonable rules and regulations prescribed by
25the Department. If the Department subsequently determines that
26all or any part of the credit taken was not actually due to the

 

 

HB4300- 477 -LRB099 14379 HLH 38474 b

1taxpayer, the taxpayer's 2.1% or 1.75% vendor's discount shall
2be reduced by 2.1%, or 1.75%, or 0.75% (as applicable) of the
3difference between the credit taken and that actually due, and
4the taxpayer shall be liable for penalties and interest on such
5difference.
6    If the retailer is otherwise required to file a monthly
7return and if the retailer's average monthly tax liability to
8the Department does not exceed $200, the Department may
9authorize his returns to be filed on a quarter annual basis,
10with the return for January, February, and March of a given
11year being due by April 20 of such year; with the return for
12April, May and June of a given year being due by July 20 of such
13year; with the return for July, August and September of a given
14year being due by October 20 of such year, and with the return
15for October, November and December of a given year being due by
16January 20 of the following year.
17    If the retailer is otherwise required to file a monthly or
18quarterly return and if the retailer's average monthly tax
19liability to the Department does not exceed $50, the Department
20may authorize his returns to be filed on an annual basis, with
21the return for a given year being due by January 20 of the
22following year.
23    Such quarter annual and annual returns, as to form and
24substance, shall be subject to the same requirements as monthly
25returns.
26    Notwithstanding any other provision in this Act concerning

 

 

HB4300- 478 -LRB099 14379 HLH 38474 b

1the time within which a retailer may file his return, in the
2case of any retailer who ceases to engage in a kind of business
3which makes him responsible for filing returns under this Act,
4such retailer shall file a final return under this Act with the
5Department not more than one month after discontinuing such
6business.
7    In addition, with respect to motor vehicles, watercraft,
8aircraft, and trailers that are required to be registered with
9an agency of this State, every retailer selling this kind of
10tangible personal property shall file, with the Department,
11upon a form to be prescribed and supplied by the Department, a
12separate return for each such item of tangible personal
13property which the retailer sells, except that if, in the same
14transaction, (i) a retailer of aircraft, watercraft, motor
15vehicles or trailers transfers more than one aircraft,
16watercraft, motor vehicle or trailer to another aircraft,
17watercraft, motor vehicle or trailer retailer for the purpose
18of resale or (ii) a retailer of aircraft, watercraft, motor
19vehicles, or trailers transfers more than one aircraft,
20watercraft, motor vehicle, or trailer to a purchaser for use as
21a qualifying rolling stock as provided in Section 3-55 of this
22Act, then that seller may report the transfer of all the
23aircraft, watercraft, motor vehicles or trailers involved in
24that transaction to the Department on the same uniform
25invoice-transaction reporting return form. For purposes of
26this Section, "watercraft" means a Class 2, Class 3, or Class 4

 

 

HB4300- 479 -LRB099 14379 HLH 38474 b

1watercraft as defined in Section 3-2 of the Boat Registration
2and Safety Act, a personal watercraft, or any boat equipped
3with an inboard motor.
4    The transaction reporting return in the case of motor
5vehicles or trailers that are required to be registered with an
6agency of this State, shall be the same document as the Uniform
7Invoice referred to in Section 5-402 of the Illinois Vehicle
8Code and must show the name and address of the seller; the name
9and address of the purchaser; the amount of the selling price
10including the amount allowed by the retailer for traded-in
11property, if any; the amount allowed by the retailer for the
12traded-in tangible personal property, if any, to the extent to
13which Section 2 of this Act allows an exemption for the value
14of traded-in property; the balance payable after deducting such
15trade-in allowance from the total selling price; the amount of
16tax due from the retailer with respect to such transaction; the
17amount of tax collected from the purchaser by the retailer on
18such transaction (or satisfactory evidence that such tax is not
19due in that particular instance, if that is claimed to be the
20fact); the place and date of the sale; a sufficient
21identification of the property sold; such other information as
22is required in Section 5-402 of the Illinois Vehicle Code, and
23such other information as the Department may reasonably
24require.
25    The transaction reporting return in the case of watercraft
26and aircraft must show the name and address of the seller; the

 

 

HB4300- 480 -LRB099 14379 HLH 38474 b

1name and address of the purchaser; the amount of the selling
2price including the amount allowed by the retailer for
3traded-in property, if any; the amount allowed by the retailer
4for the traded-in tangible personal property, if any, to the
5extent to which Section 2 of this Act allows an exemption for
6the value of traded-in property; the balance payable after
7deducting such trade-in allowance from the total selling price;
8the amount of tax due from the retailer with respect to such
9transaction; the amount of tax collected from the purchaser by
10the retailer on such transaction (or satisfactory evidence that
11such tax is not due in that particular instance, if that is
12claimed to be the fact); the place and date of the sale, a
13sufficient identification of the property sold, and such other
14information as the Department may reasonably require.
15    Such transaction reporting return shall be filed not later
16than 20 days after the date of delivery of the item that is
17being sold, but may be filed by the retailer at any time sooner
18than that if he chooses to do so. The transaction reporting
19return and tax remittance or proof of exemption from the tax
20that is imposed by this Act may be transmitted to the
21Department by way of the State agency with which, or State
22officer with whom, the tangible personal property must be
23titled or registered (if titling or registration is required)
24if the Department and such agency or State officer determine
25that this procedure will expedite the processing of
26applications for title or registration.

 

 

HB4300- 481 -LRB099 14379 HLH 38474 b

1    With each such transaction reporting return, the retailer
2shall remit the proper amount of tax due (or shall submit
3satisfactory evidence that the sale is not taxable if that is
4the case), to the Department or its agents, whereupon the
5Department shall issue, in the purchaser's name, a tax receipt
6(or a certificate of exemption if the Department is satisfied
7that the particular sale is tax exempt) which such purchaser
8may submit to the agency with which, or State officer with
9whom, he must title or register the tangible personal property
10that is involved (if titling or registration is required) in
11support of such purchaser's application for an Illinois
12certificate or other evidence of title or registration to such
13tangible personal property.
14    No retailer's failure or refusal to remit tax under this
15Act precludes a user, who has paid the proper tax to the
16retailer, from obtaining his certificate of title or other
17evidence of title or registration (if titling or registration
18is required) upon satisfying the Department that such user has
19paid the proper tax (if tax is due) to the retailer. The
20Department shall adopt appropriate rules to carry out the
21mandate of this paragraph.
22    If the user who would otherwise pay tax to the retailer
23wants the transaction reporting return filed and the payment of
24tax or proof of exemption made to the Department before the
25retailer is willing to take these actions and such user has not
26paid the tax to the retailer, such user may certify to the fact

 

 

HB4300- 482 -LRB099 14379 HLH 38474 b

1of such delay by the retailer, and may (upon the Department
2being satisfied of the truth of such certification) transmit
3the information required by the transaction reporting return
4and the remittance for tax or proof of exemption directly to
5the Department and obtain his tax receipt or exemption
6determination, in which event the transaction reporting return
7and tax remittance (if a tax payment was required) shall be
8credited by the Department to the proper retailer's account
9with the Department, but without the vendor's 2.1% or 1.75%
10discount provided for in this Section being allowed. When the
11user pays the tax directly to the Department, he shall pay the
12tax in the same amount and in the same form in which it would be
13remitted if the tax had been remitted to the Department by the
14retailer.
15    Where a retailer collects the tax with respect to the
16selling price of tangible personal property which he sells and
17the purchaser thereafter returns such tangible personal
18property and the retailer refunds the selling price thereof to
19the purchaser, such retailer shall also refund, to the
20purchaser, the tax so collected from the purchaser. When filing
21his return for the period in which he refunds such tax to the
22purchaser, the retailer may deduct the amount of the tax so
23refunded by him to the purchaser from any other use tax which
24such retailer may be required to pay or remit to the
25Department, as shown by such return, if the amount of the tax
26to be deducted was previously remitted to the Department by

 

 

HB4300- 483 -LRB099 14379 HLH 38474 b

1such retailer. If the retailer has not previously remitted the
2amount of such tax to the Department, he is entitled to no
3deduction under this Act upon refunding such tax to the
4purchaser.
5    Any retailer filing a return under this Section shall also
6include (for the purpose of paying tax thereon) the total tax
7covered by such return upon the selling price of tangible
8personal property purchased by him at retail from a retailer,
9but as to which the tax imposed by this Act was not collected
10from the retailer filing such return, and such retailer shall
11remit the amount of such tax to the Department when filing such
12return.
13    If experience indicates such action to be practicable, the
14Department may prescribe and furnish a combination or joint
15return which will enable retailers, who are required to file
16returns hereunder and also under the Retailers' Occupation Tax
17Act, to furnish all the return information required by both
18Acts on the one form.
19    Where the retailer has more than one business registered
20with the Department under separate registration under this Act,
21such retailer may not file each return that is due as a single
22return covering all such registered businesses, but shall file
23separate returns for each such registered business.
24    Beginning January 1, 1990, each month the Department shall
25pay into the State and Local Sales Tax Reform Fund, a special
26fund in the State Treasury which is hereby created, the net

 

 

HB4300- 484 -LRB099 14379 HLH 38474 b

1revenue realized for the preceding month from the 1% tax on
2sales of food for human consumption which is to be consumed off
3the premises where it is sold (other than alcoholic beverages,
4soft drinks and food which has been prepared for immediate
5consumption) and prescription and nonprescription medicines,
6drugs, medical appliances and insulin, urine testing
7materials, syringes and needles used by diabetics.
8    Beginning January 1, 1990, each month the Department shall
9pay into the County and Mass Transit District Fund 4% of the
10net revenue realized for the preceding month from the 6.25%
11general rate on the selling price of tangible personal property
12which is purchased outside Illinois at retail from a retailer
13and which is titled or registered by an agency of this State's
14government.
15    Beginning January 1, 1990, each month the Department shall
16pay into the State and Local Sales Tax Reform Fund, a special
17fund in the State Treasury, 20% of the net revenue realized for
18the preceding month from the 6.25% general rate on the selling
19price of tangible personal property, other than tangible
20personal property which is purchased outside Illinois at retail
21from a retailer and which is titled or registered by an agency
22of this State's government.
23    Beginning August 1, 2000, each month the Department shall
24pay into the State and Local Sales Tax Reform Fund 100% of the
25net revenue realized for the preceding month from the 1.25%
26rate on the selling price of motor fuel and gasohol. Beginning

 

 

HB4300- 485 -LRB099 14379 HLH 38474 b

1September 1, 2010, each month the Department shall pay into the
2State and Local Sales Tax Reform Fund 100% of the net revenue
3realized for the preceding month from the 1.25% rate on the
4selling price of sales tax holiday items.
5    Beginning January 1, 1990, each month the Department shall
6pay into the Local Government Tax Fund 16% of the net revenue
7realized for the preceding month from the 6.25% general rate on
8the selling price of tangible personal property which is
9purchased outside Illinois at retail from a retailer and which
10is titled or registered by an agency of this State's
11government.
12    Beginning October 1, 2009, each month the Department shall
13pay into the Capital Projects Fund an amount that is equal to
14an amount estimated by the Department to represent 80% of the
15net revenue realized for the preceding month from the sale of
16candy, grooming and hygiene products, and soft drinks that had
17been taxed at a rate of 1% prior to September 1, 2009 but that
18are now taxed at 6.25%.
19    Beginning July 1, 2011, each month the Department shall pay
20into the Clean Air Act (CAA) Permit Fund 80% of the net revenue
21realized for the preceding month from the 6.25% general rate on
22the selling price of sorbents used in Illinois in the process
23of sorbent injection as used to comply with the Environmental
24Protection Act or the federal Clean Air Act, but the total
25payment into the Clean Air Act (CAA) Permit Fund under this Act
26and the Retailers' Occupation Tax Act shall not exceed

 

 

HB4300- 486 -LRB099 14379 HLH 38474 b

1$2,000,000 in any fiscal year.
2    Beginning July 1, 2013, each month the Department shall pay
3into the Underground Storage Tank Fund from the proceeds
4collected under this Act, the Service Use Tax Act, the Service
5Occupation Tax Act, and the Retailers' Occupation Tax Act an
6amount equal to the average monthly deficit in the Underground
7Storage Tank Fund during the prior year, as certified annually
8by the Illinois Environmental Protection Agency, but the total
9payment into the Underground Storage Tank Fund under this Act,
10the Service Use Tax Act, the Service Occupation Tax Act, and
11the Retailers' Occupation Tax Act shall not exceed $18,000,000
12in any State fiscal year. As used in this paragraph, the
13"average monthly deficit" shall be equal to the difference
14between the average monthly claims for payment by the fund and
15the average monthly revenues deposited into the fund, excluding
16payments made pursuant to this paragraph.
17    Beginning July 1, 2015, of the remainder of the moneys
18received by the Department under this Act, the Service Use Tax
19Act, the Service Occupation Tax Act, and the Retailers'
20Occupation Tax Act, each month the Department shall deposit
21$500,000 into the State Crime Laboratory Fund.
22    Of the remainder of the moneys received by the Department
23pursuant to this Act, (a) 1.75% thereof shall be paid into the
24Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
25and after July 1, 1989, 3.8% thereof shall be paid into the
26Build Illinois Fund; provided, however, that if in any fiscal

 

 

HB4300- 487 -LRB099 14379 HLH 38474 b

1year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
2may be, of the moneys received by the Department and required
3to be paid into the Build Illinois Fund pursuant to Section 3
4of the Retailers' Occupation Tax Act, Section 9 of the Use Tax
5Act, Section 9 of the Service Use Tax Act, and Section 9 of the
6Service Occupation Tax Act, such Acts being hereinafter called
7the "Tax Acts" and such aggregate of 2.2% or 3.8%, as the case
8may be, of moneys being hereinafter called the "Tax Act
9Amount", and (2) the amount transferred to the Build Illinois
10Fund from the State and Local Sales Tax Reform Fund shall be
11less than the Annual Specified Amount (as defined in Section 3
12of the Retailers' Occupation Tax Act), an amount equal to the
13difference shall be immediately paid into the Build Illinois
14Fund from other moneys received by the Department pursuant to
15the Tax Acts; and further provided, that if on the last
16business day of any month the sum of (1) the Tax Act Amount
17required to be deposited into the Build Illinois Bond Account
18in the Build Illinois Fund during such month and (2) the amount
19transferred during such month to the Build Illinois Fund from
20the State and Local Sales Tax Reform Fund shall have been less
21than 1/12 of the Annual Specified Amount, an amount equal to
22the difference shall be immediately paid into the Build
23Illinois Fund from other moneys received by the Department
24pursuant to the Tax Acts; and, further provided, that in no
25event shall the payments required under the preceding proviso
26result in aggregate payments into the Build Illinois Fund

 

 

HB4300- 488 -LRB099 14379 HLH 38474 b

1pursuant to this clause (b) for any fiscal year in excess of
2the greater of (i) the Tax Act Amount or (ii) the Annual
3Specified Amount for such fiscal year; and, further provided,
4that the amounts payable into the Build Illinois Fund under
5this clause (b) shall be payable only until such time as the
6aggregate amount on deposit under each trust indenture securing
7Bonds issued and outstanding pursuant to the Build Illinois
8Bond Act is sufficient, taking into account any future
9investment income, to fully provide, in accordance with such
10indenture, for the defeasance of or the payment of the
11principal of, premium, if any, and interest on the Bonds
12secured by such indenture and on any Bonds expected to be
13issued thereafter and all fees and costs payable with respect
14thereto, all as certified by the Director of the Bureau of the
15Budget (now Governor's Office of Management and Budget). If on
16the last business day of any month in which Bonds are
17outstanding pursuant to the Build Illinois Bond Act, the
18aggregate of the moneys deposited in the Build Illinois Bond
19Account in the Build Illinois Fund in such month shall be less
20than the amount required to be transferred in such month from
21the Build Illinois Bond Account to the Build Illinois Bond
22Retirement and Interest Fund pursuant to Section 13 of the
23Build Illinois Bond Act, an amount equal to such deficiency
24shall be immediately paid from other moneys received by the
25Department pursuant to the Tax Acts to the Build Illinois Fund;
26provided, however, that any amounts paid to the Build Illinois

 

 

HB4300- 489 -LRB099 14379 HLH 38474 b

1Fund in any fiscal year pursuant to this sentence shall be
2deemed to constitute payments pursuant to clause (b) of the
3preceding sentence and shall reduce the amount otherwise
4payable for such fiscal year pursuant to clause (b) of the
5preceding sentence. The moneys received by the Department
6pursuant to this Act and required to be deposited into the
7Build Illinois Fund are subject to the pledge, claim and charge
8set forth in Section 12 of the Build Illinois Bond Act.
9    Subject to payment of amounts into the Build Illinois Fund
10as provided in the preceding paragraph or in any amendment
11thereto hereafter enacted, the following specified monthly
12installment of the amount requested in the certificate of the
13Chairman of the Metropolitan Pier and Exposition Authority
14provided under Section 8.25f of the State Finance Act, but not
15in excess of the sums designated as "Total Deposit", shall be
16deposited in the aggregate from collections under Section 9 of
17the Use Tax Act, Section 9 of the Service Use Tax Act, Section
189 of the Service Occupation Tax Act, and Section 3 of the
19Retailers' Occupation Tax Act into the McCormick Place
20Expansion Project Fund in the specified fiscal years.
21Fiscal YearTotal Deposit
221993         $0
231994 53,000,000
241995 58,000,000
251996 61,000,000
261997 64,000,000

 

 

HB4300- 490 -LRB099 14379 HLH 38474 b

11998 68,000,000
21999 71,000,000
32000 75,000,000
42001 80,000,000
52002 93,000,000
62003 99,000,000
72004103,000,000
82005108,000,000
92006113,000,000
102007119,000,000
112008126,000,000
122009132,000,000
132010139,000,000
142011146,000,000
152012153,000,000
162013161,000,000
172014170,000,000
182015179,000,000
192016189,000,000
202017199,000,000
212018210,000,000
222019221,000,000
232020233,000,000
242021246,000,000
252022260,000,000
262023275,000,000

 

 

HB4300- 491 -LRB099 14379 HLH 38474 b

12024 275,000,000
22025 275,000,000
32026 279,000,000
42027 292,000,000
52028 307,000,000
62029 322,000,000
72030 338,000,000
82031 350,000,000
92032 350,000,000
10and
11each fiscal year
12thereafter that bonds
13are outstanding under
14Section 13.2 of the
15Metropolitan Pier and
16Exposition Authority Act,
17but not after fiscal year 2060.
18    Beginning July 20, 1993 and in each month of each fiscal
19year thereafter, one-eighth of the amount requested in the
20certificate of the Chairman of the Metropolitan Pier and
21Exposition Authority for that fiscal year, less the amount
22deposited into the McCormick Place Expansion Project Fund by
23the State Treasurer in the respective month under subsection
24(g) of Section 13 of the Metropolitan Pier and Exposition
25Authority Act, plus cumulative deficiencies in the deposits
26required under this Section for previous months and years,

 

 

HB4300- 492 -LRB099 14379 HLH 38474 b

1shall be deposited into the McCormick Place Expansion Project
2Fund, until the full amount requested for the fiscal year, but
3not in excess of the amount specified above as "Total Deposit",
4has been deposited.
5    Subject to payment of amounts into the Build Illinois Fund
6and the McCormick Place Expansion Project Fund pursuant to the
7preceding paragraphs or in any amendments thereto hereafter
8enacted, beginning July 1, 1993 and ending on September 30,
92013, the Department shall each month pay into the Illinois Tax
10Increment Fund 0.27% of 80% of the net revenue realized for the
11preceding month from the 6.25% general rate on the selling
12price of tangible personal property.
13    Subject to payment of amounts into the Build Illinois Fund
14and the McCormick Place Expansion Project Fund pursuant to the
15preceding paragraphs or in any amendments thereto hereafter
16enacted, beginning with the receipt of the first report of
17taxes paid by an eligible business and continuing for a 25-year
18period, the Department shall each month pay into the Energy
19Infrastructure Fund 80% of the net revenue realized from the
206.25% general rate on the selling price of Illinois-mined coal
21that was sold to an eligible business. For purposes of this
22paragraph, the term "eligible business" means a new electric
23generating facility certified pursuant to Section 605-332 of
24the Department of Commerce and Economic Opportunity Law of the
25Civil Administrative Code of Illinois.
26    Subject to payment of amounts into the Build Illinois Fund,

 

 

HB4300- 493 -LRB099 14379 HLH 38474 b

1the McCormick Place Expansion Project Fund, the Illinois Tax
2Increment Fund, and the Energy Infrastructure Fund pursuant to
3the preceding paragraphs or in any amendments to this Section
4hereafter enacted, beginning on the first day of the first
5calendar month to occur on or after the effective date of this
6amendatory Act of the 98th General Assembly, each month, from
7the collections made under Section 9 of the Use Tax Act,
8Section 9 of the Service Use Tax Act, Section 9 of the Service
9Occupation Tax Act, and Section 3 of the Retailers' Occupation
10Tax Act, the Department shall pay into the Tax Compliance and
11Administration Fund, to be used, subject to appropriation, to
12fund additional auditors and compliance personnel at the
13Department of Revenue, an amount equal to 1/12 of 5% of 80% of
14the cash receipts collected during the preceding fiscal year by
15the Audit Bureau of the Department under the Use Tax Act, the
16Service Use Tax Act, the Service Occupation Tax Act, the
17Retailers' Occupation Tax Act, and associated local occupation
18and use taxes administered by the Department.
19    Of the remainder of the moneys received by the Department
20pursuant to this Act, 75% thereof shall be paid into the State
21Treasury and 25% shall be reserved in a special account and
22used only for the transfer to the Common School Fund as part of
23the monthly transfer from the General Revenue Fund in
24accordance with Section 8a of the State Finance Act.
25    As soon as possible after the first day of each month, upon
26certification of the Department of Revenue, the Comptroller

 

 

HB4300- 494 -LRB099 14379 HLH 38474 b

1shall order transferred and the Treasurer shall transfer from
2the General Revenue Fund to the Motor Fuel Tax Fund an amount
3equal to 1.7% of 80% of the net revenue realized under this Act
4for the second preceding month. Beginning April 1, 2000, this
5transfer is no longer required and shall not be made.
6    Net revenue realized for a month shall be the revenue
7collected by the State pursuant to this Act, less the amount
8paid out during that month as refunds to taxpayers for
9overpayment of liability.
10    For greater simplicity of administration, manufacturers,
11importers and wholesalers whose products are sold at retail in
12Illinois by numerous retailers, and who wish to do so, may
13assume the responsibility for accounting and paying to the
14Department all tax accruing under this Act with respect to such
15sales, if the retailers who are affected do not make written
16objection to the Department to this arrangement.
17(Source: P.A. 98-24, eff. 6-19-13; 98-109, eff. 7-25-13;
1898-496, eff. 1-1-14; 98-756, eff. 7-16-14; 98-1098, eff.
198-26-14; 99-352, eff. 8-12-15.)
 
20    Section 50-10. The Service Use Tax Act is amended by
21changing Section 9 as follows:
 
22    (35 ILCS 110/9)  (from Ch. 120, par. 439.39)
23    Sec. 9. Each serviceman required or authorized to collect
24the tax herein imposed shall pay to the Department the amount

 

 

HB4300- 495 -LRB099 14379 HLH 38474 b

1of such tax (except as otherwise provided) at the time when he
2is required to file his return for the period during which such
3tax was collected, less a discount of 2.1% prior to January 1,
41990, and 1.75% on and after January 1, 1990 and prior to July
51, 2016, and 0.75% on and after July 1, 2016, or $5 per
6calendar year, whichever is greater, which is allowed to
7reimburse the serviceman for expenses incurred in collecting
8the tax, keeping records, preparing and filing returns,
9remitting the tax and supplying data to the Department on
10request. The Department may disallow the discount for
11servicemen whose certificate of registration is revoked at the
12time the return is filed, but only if the Department's decision
13to revoke the certificate of registration has become final. A
14serviceman need not remit that part of any tax collected by him
15to the extent that he is required to pay and does pay the tax
16imposed by the Service Occupation Tax Act with respect to his
17sale of service involving the incidental transfer by him of the
18same property.
19    Except as provided hereinafter in this Section, on or
20before the twentieth day of each calendar month, such
21serviceman shall file a return for the preceding calendar month
22in accordance with reasonable Rules and Regulations to be
23promulgated by the Department. Such return shall be filed on a
24form prescribed by the Department and shall contain such
25information as the Department may reasonably require.
26    The Department may require returns to be filed on a

 

 

HB4300- 496 -LRB099 14379 HLH 38474 b

1quarterly basis. If so required, a return for each calendar
2quarter shall be filed on or before the twentieth day of the
3calendar month following the end of such calendar quarter. The
4taxpayer shall also file a return with the Department for each
5of the first two months of each calendar quarter, on or before
6the twentieth day of the following calendar month, stating:
7        1. The name of the seller;
8        2. The address of the principal place of business from
9    which he engages in business as a serviceman in this State;
10        3. The total amount of taxable receipts received by him
11    during the preceding calendar month, including receipts
12    from charge and time sales, but less all deductions allowed
13    by law;
14        4. The amount of credit provided in Section 2d of this
15    Act;
16        5. The amount of tax due;
17        5-5. The signature of the taxpayer; and
18        6. Such other reasonable information as the Department
19    may require.
20    If a taxpayer fails to sign a return within 30 days after
21the proper notice and demand for signature by the Department,
22the return shall be considered valid and any amount shown to be
23due on the return shall be deemed assessed.
24    Beginning October 1, 1993, a taxpayer who has an average
25monthly tax liability of $150,000 or more shall make all
26payments required by rules of the Department by electronic

 

 

HB4300- 497 -LRB099 14379 HLH 38474 b

1funds transfer. Beginning October 1, 1994, a taxpayer who has
2an average monthly tax liability of $100,000 or more shall make
3all payments required by rules of the Department by electronic
4funds transfer. Beginning October 1, 1995, a taxpayer who has
5an average monthly tax liability of $50,000 or more shall make
6all payments required by rules of the Department by electronic
7funds transfer. Beginning October 1, 2000, a taxpayer who has
8an annual tax liability of $200,000 or more shall make all
9payments required by rules of the Department by electronic
10funds transfer. The term "annual tax liability" shall be the
11sum of the taxpayer's liabilities under this Act, and under all
12other State and local occupation and use tax laws administered
13by the Department, for the immediately preceding calendar year.
14The term "average monthly tax liability" means the sum of the
15taxpayer's liabilities under this Act, and under all other
16State and local occupation and use tax laws administered by the
17Department, for the immediately preceding calendar year
18divided by 12. Beginning on October 1, 2002, a taxpayer who has
19a tax liability in the amount set forth in subsection (b) of
20Section 2505-210 of the Department of Revenue Law shall make
21all payments required by rules of the Department by electronic
22funds transfer.
23    Before August 1 of each year beginning in 1993, the
24Department shall notify all taxpayers required to make payments
25by electronic funds transfer. All taxpayers required to make
26payments by electronic funds transfer shall make those payments

 

 

HB4300- 498 -LRB099 14379 HLH 38474 b

1for a minimum of one year beginning on October 1.
2    Any taxpayer not required to make payments by electronic
3funds transfer may make payments by electronic funds transfer
4with the permission of the Department.
5    All taxpayers required to make payment by electronic funds
6transfer and any taxpayers authorized to voluntarily make
7payments by electronic funds transfer shall make those payments
8in the manner authorized by the Department.
9    The Department shall adopt such rules as are necessary to
10effectuate a program of electronic funds transfer and the
11requirements of this Section.
12    If the serviceman is otherwise required to file a monthly
13return and if the serviceman's average monthly tax liability to
14the Department does not exceed $200, the Department may
15authorize his returns to be filed on a quarter annual basis,
16with the return for January, February and March of a given year
17being due by April 20 of such year; with the return for April,
18May and June of a given year being due by July 20 of such year;
19with the return for July, August and September of a given year
20being due by October 20 of such year, and with the return for
21October, November and December of a given year being due by
22January 20 of the following year.
23    If the serviceman is otherwise required to file a monthly
24or quarterly return and if the serviceman's average monthly tax
25liability to the Department does not exceed $50, the Department
26may authorize his returns to be filed on an annual basis, with

 

 

HB4300- 499 -LRB099 14379 HLH 38474 b

1the return for a given year being due by January 20 of the
2following year.
3    Such quarter annual and annual returns, as to form and
4substance, shall be subject to the same requirements as monthly
5returns.
6    Notwithstanding any other provision in this Act concerning
7the time within which a serviceman may file his return, in the
8case of any serviceman who ceases to engage in a kind of
9business which makes him responsible for filing returns under
10this Act, such serviceman shall file a final return under this
11Act with the Department not more than 1 month after
12discontinuing such business.
13    Where a serviceman collects the tax with respect to the
14selling price of property which he sells and the purchaser
15thereafter returns such property and the serviceman refunds the
16selling price thereof to the purchaser, such serviceman shall
17also refund, to the purchaser, the tax so collected from the
18purchaser. When filing his return for the period in which he
19refunds such tax to the purchaser, the serviceman may deduct
20the amount of the tax so refunded by him to the purchaser from
21any other Service Use Tax, Service Occupation Tax, retailers'
22occupation tax or use tax which such serviceman may be required
23to pay or remit to the Department, as shown by such return,
24provided that the amount of the tax to be deducted shall
25previously have been remitted to the Department by such
26serviceman. If the serviceman shall not previously have

 

 

HB4300- 500 -LRB099 14379 HLH 38474 b

1remitted the amount of such tax to the Department, he shall be
2entitled to no deduction hereunder upon refunding such tax to
3the purchaser.
4    Any serviceman filing a return hereunder shall also include
5the total tax upon the selling price of tangible personal
6property purchased for use by him as an incident to a sale of
7service, and such serviceman shall remit the amount of such tax
8to the Department when filing such return.
9    If experience indicates such action to be practicable, the
10Department may prescribe and furnish a combination or joint
11return which will enable servicemen, who are required to file
12returns hereunder and also under the Service Occupation Tax
13Act, to furnish all the return information required by both
14Acts on the one form.
15    Where the serviceman has more than one business registered
16with the Department under separate registration hereunder,
17such serviceman shall not file each return that is due as a
18single return covering all such registered businesses, but
19shall file separate returns for each such registered business.
20    Beginning January 1, 1990, each month the Department shall
21pay into the State and Local Tax Reform Fund, a special fund in
22the State Treasury, the net revenue realized for the preceding
23month from the 1% tax on sales of food for human consumption
24which is to be consumed off the premises where it is sold
25(other than alcoholic beverages, soft drinks and food which has
26been prepared for immediate consumption) and prescription and

 

 

HB4300- 501 -LRB099 14379 HLH 38474 b

1nonprescription medicines, drugs, medical appliances and
2insulin, urine testing materials, syringes and needles used by
3diabetics.
4    Beginning January 1, 1990, each month the Department shall
5pay into the State and Local Sales Tax Reform Fund 20% of the
6net revenue realized for the preceding month from the 6.25%
7general rate on transfers of tangible personal property, other
8than tangible personal property which is purchased outside
9Illinois at retail from a retailer and which is titled or
10registered by an agency of this State's government.
11    Beginning August 1, 2000, each month the Department shall
12pay into the State and Local Sales Tax Reform Fund 100% of the
13net revenue realized for the preceding month from the 1.25%
14rate on the selling price of motor fuel and gasohol.
15    Beginning October 1, 2009, each month the Department shall
16pay into the Capital Projects Fund an amount that is equal to
17an amount estimated by the Department to represent 80% of the
18net revenue realized for the preceding month from the sale of
19candy, grooming and hygiene products, and soft drinks that had
20been taxed at a rate of 1% prior to September 1, 2009 but that
21are now taxed at 6.25%.
22    Beginning July 1, 2013, each month the Department shall pay
23into the Underground Storage Tank Fund from the proceeds
24collected under this Act, the Use Tax Act, the Service
25Occupation Tax Act, and the Retailers' Occupation Tax Act an
26amount equal to the average monthly deficit in the Underground

 

 

HB4300- 502 -LRB099 14379 HLH 38474 b

1Storage Tank Fund during the prior year, as certified annually
2by the Illinois Environmental Protection Agency, but the total
3payment into the Underground Storage Tank Fund under this Act,
4the Use Tax Act, the Service Occupation Tax Act, and the
5Retailers' Occupation Tax Act shall not exceed $18,000,000 in
6any State fiscal year. As used in this paragraph, the "average
7monthly deficit" shall be equal to the difference between the
8average monthly claims for payment by the fund and the average
9monthly revenues deposited into the fund, excluding payments
10made pursuant to this paragraph.
11    Beginning July 1, 2015, of the remainder of the moneys
12received by the Department under the Use Tax Act, this Act, the
13Service Occupation Tax Act, and the Retailers' Occupation Tax
14Act, each month the Department shall deposit $500,000 into the
15State Crime Laboratory Fund.
16    Of the remainder of the moneys received by the Department
17pursuant to this Act, (a) 1.75% thereof shall be paid into the
18Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
19and after July 1, 1989, 3.8% thereof shall be paid into the
20Build Illinois Fund; provided, however, that if in any fiscal
21year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
22may be, of the moneys received by the Department and required
23to be paid into the Build Illinois Fund pursuant to Section 3
24of the Retailers' Occupation Tax Act, Section 9 of the Use Tax
25Act, Section 9 of the Service Use Tax Act, and Section 9 of the
26Service Occupation Tax Act, such Acts being hereinafter called

 

 

HB4300- 503 -LRB099 14379 HLH 38474 b

1the "Tax Acts" and such aggregate of 2.2% or 3.8%, as the case
2may be, of moneys being hereinafter called the "Tax Act
3Amount", and (2) the amount transferred to the Build Illinois
4Fund from the State and Local Sales Tax Reform Fund shall be
5less than the Annual Specified Amount (as defined in Section 3
6of the Retailers' Occupation Tax Act), an amount equal to the
7difference shall be immediately paid into the Build Illinois
8Fund from other moneys received by the Department pursuant to
9the Tax Acts; and further provided, that if on the last
10business day of any month the sum of (1) the Tax Act Amount
11required to be deposited into the Build Illinois Bond Account
12in the Build Illinois Fund during such month and (2) the amount
13transferred during such month to the Build Illinois Fund from
14the State and Local Sales Tax Reform Fund shall have been less
15than 1/12 of the Annual Specified Amount, an amount equal to
16the difference shall be immediately paid into the Build
17Illinois Fund from other moneys received by the Department
18pursuant to the Tax Acts; and, further provided, that in no
19event shall the payments required under the preceding proviso
20result in aggregate payments into the Build Illinois Fund
21pursuant to this clause (b) for any fiscal year in excess of
22the greater of (i) the Tax Act Amount or (ii) the Annual
23Specified Amount for such fiscal year; and, further provided,
24that the amounts payable into the Build Illinois Fund under
25this clause (b) shall be payable only until such time as the
26aggregate amount on deposit under each trust indenture securing

 

 

HB4300- 504 -LRB099 14379 HLH 38474 b

1Bonds issued and outstanding pursuant to the Build Illinois
2Bond Act is sufficient, taking into account any future
3investment income, to fully provide, in accordance with such
4indenture, for the defeasance of or the payment of the
5principal of, premium, if any, and interest on the Bonds
6secured by such indenture and on any Bonds expected to be
7issued thereafter and all fees and costs payable with respect
8thereto, all as certified by the Director of the Bureau of the
9Budget (now Governor's Office of Management and Budget). If on
10the last business day of any month in which Bonds are
11outstanding pursuant to the Build Illinois Bond Act, the
12aggregate of the moneys deposited in the Build Illinois Bond
13Account in the Build Illinois Fund in such month shall be less
14than the amount required to be transferred in such month from
15the Build Illinois Bond Account to the Build Illinois Bond
16Retirement and Interest Fund pursuant to Section 13 of the
17Build Illinois Bond Act, an amount equal to such deficiency
18shall be immediately paid from other moneys received by the
19Department pursuant to the Tax Acts to the Build Illinois Fund;
20provided, however, that any amounts paid to the Build Illinois
21Fund in any fiscal year pursuant to this sentence shall be
22deemed to constitute payments pursuant to clause (b) of the
23preceding sentence and shall reduce the amount otherwise
24payable for such fiscal year pursuant to clause (b) of the
25preceding sentence. The moneys received by the Department
26pursuant to this Act and required to be deposited into the

 

 

HB4300- 505 -LRB099 14379 HLH 38474 b

1Build Illinois Fund are subject to the pledge, claim and charge
2set forth in Section 12 of the Build Illinois Bond Act.
3    Subject to payment of amounts into the Build Illinois Fund
4as provided in the preceding paragraph or in any amendment
5thereto hereafter enacted, the following specified monthly
6installment of the amount requested in the certificate of the
7Chairman of the Metropolitan Pier and Exposition Authority
8provided under Section 8.25f of the State Finance Act, but not
9in excess of the sums designated as "Total Deposit", shall be
10deposited in the aggregate from collections under Section 9 of
11the Use Tax Act, Section 9 of the Service Use Tax Act, Section
129 of the Service Occupation Tax Act, and Section 3 of the
13Retailers' Occupation Tax Act into the McCormick Place
14Expansion Project Fund in the specified fiscal years.
15Fiscal YearTotal Deposit
161993         $0
171994 53,000,000
181995 58,000,000
191996 61,000,000
201997 64,000,000
211998 68,000,000
221999 71,000,000
232000 75,000,000
242001 80,000,000
252002 93,000,000

 

 

HB4300- 506 -LRB099 14379 HLH 38474 b

12003 99,000,000
22004103,000,000
32005108,000,000
42006113,000,000
52007119,000,000
62008126,000,000
72009132,000,000
82010139,000,000
92011146,000,000
102012153,000,000
112013161,000,000
122014170,000,000
132015179,000,000
142016189,000,000
152017199,000,000
162018210,000,000
172019221,000,000
182020233,000,000
192021246,000,000
202022260,000,000
212023275,000,000
222024 275,000,000
232025 275,000,000
242026 279,000,000
252027 292,000,000
262028 307,000,000

 

 

HB4300- 507 -LRB099 14379 HLH 38474 b

12029 322,000,000
22030 338,000,000
32031 350,000,000
42032 350,000,000
5and
6each fiscal year
7thereafter that bonds
8are outstanding under
9Section 13.2 of the
10Metropolitan Pier and
11Exposition Authority Act,
12but not after fiscal year 2060.
13    Beginning July 20, 1993 and in each month of each fiscal
14year thereafter, one-eighth of the amount requested in the
15certificate of the Chairman of the Metropolitan Pier and
16Exposition Authority for that fiscal year, less the amount
17deposited into the McCormick Place Expansion Project Fund by
18the State Treasurer in the respective month under subsection
19(g) of Section 13 of the Metropolitan Pier and Exposition
20Authority Act, plus cumulative deficiencies in the deposits
21required under this Section for previous months and years,
22shall be deposited into the McCormick Place Expansion Project
23Fund, until the full amount requested for the fiscal year, but
24not in excess of the amount specified above as "Total Deposit",
25has been deposited.
26    Subject to payment of amounts into the Build Illinois Fund

 

 

HB4300- 508 -LRB099 14379 HLH 38474 b

1and the McCormick Place Expansion Project Fund pursuant to the
2preceding paragraphs or in any amendments thereto hereafter
3enacted, beginning July 1, 1993 and ending on September 30,
42013, the Department shall each month pay into the Illinois Tax
5Increment Fund 0.27% of 80% of the net revenue realized for the
6preceding month from the 6.25% general rate on the selling
7price of tangible personal property.
8    Subject to payment of amounts into the Build Illinois Fund
9and the McCormick Place Expansion Project Fund pursuant to the
10preceding paragraphs or in any amendments thereto hereafter
11enacted, beginning with the receipt of the first report of
12taxes paid by an eligible business and continuing for a 25-year
13period, the Department shall each month pay into the Energy
14Infrastructure Fund 80% of the net revenue realized from the
156.25% general rate on the selling price of Illinois-mined coal
16that was sold to an eligible business. For purposes of this
17paragraph, the term "eligible business" means a new electric
18generating facility certified pursuant to Section 605-332 of
19the Department of Commerce and Economic Opportunity Law of the
20Civil Administrative Code of Illinois.
21    Subject to payment of amounts into the Build Illinois Fund,
22the McCormick Place Expansion Project Fund, the Illinois Tax
23Increment Fund, and the Energy Infrastructure Fund pursuant to
24the preceding paragraphs or in any amendments to this Section
25hereafter enacted, beginning on the first day of the first
26calendar month to occur on or after the effective date of this

 

 

HB4300- 509 -LRB099 14379 HLH 38474 b

1amendatory Act of the 98th General Assembly, each month, from
2the collections made under Section 9 of the Use Tax Act,
3Section 9 of the Service Use Tax Act, Section 9 of the Service
4Occupation Tax Act, and Section 3 of the Retailers' Occupation
5Tax Act, the Department shall pay into the Tax Compliance and
6Administration Fund, to be used, subject to appropriation, to
7fund additional auditors and compliance personnel at the
8Department of Revenue, an amount equal to 1/12 of 5% of 80% of
9the cash receipts collected during the preceding fiscal year by
10the Audit Bureau of the Department under the Use Tax Act, the
11Service Use Tax Act, the Service Occupation Tax Act, the
12Retailers' Occupation Tax Act, and associated local occupation
13and use taxes administered by the Department.
14    Of the remainder of the moneys received by the Department
15pursuant to this Act, 75% thereof shall be paid into the
16General Revenue Fund of the State Treasury and 25% shall be
17reserved in a special account and used only for the transfer to
18the Common School Fund as part of the monthly transfer from the
19General Revenue Fund in accordance with Section 8a of the State
20Finance Act.
21    As soon as possible after the first day of each month, upon
22certification of the Department of Revenue, the Comptroller
23shall order transferred and the Treasurer shall transfer from
24the General Revenue Fund to the Motor Fuel Tax Fund an amount
25equal to 1.7% of 80% of the net revenue realized under this Act
26for the second preceding month. Beginning April 1, 2000, this

 

 

HB4300- 510 -LRB099 14379 HLH 38474 b

1transfer is no longer required and shall not be made.
2    Net revenue realized for a month shall be the revenue
3collected by the State pursuant to this Act, less the amount
4paid out during that month as refunds to taxpayers for
5overpayment of liability.
6(Source: P.A. 98-24, eff. 6-19-13; 98-109, eff. 7-25-13;
798-298, eff. 8-9-13; 98-496, eff. 1-1-14; 98-756, eff. 7-16-14;
898-1098, eff. 8-26-14; 99-352, eff. 8-12-15.)
 
9    Section 50-15. The Service Occupation Tax Act is amended by
10changing Section 9 as follows:
 
11    (35 ILCS 115/9)  (from Ch. 120, par. 439.109)
12    Sec. 9. Each serviceman required or authorized to collect
13the tax herein imposed shall pay to the Department the amount
14of such tax at the time when he is required to file his return
15for the period during which such tax was collectible, less a
16discount of 2.1% prior to January 1, 1990, and 1.75% on and
17after January 1, 1990 and prior to July 1, 2016, and 0.75% on
18and after July 1, 2016, or $5 per calendar year, whichever is
19greater, which is allowed to reimburse the serviceman for
20expenses incurred in collecting the tax, keeping records,
21preparing and filing returns, remitting the tax and supplying
22data to the Department on request. The Department may disallow
23the discount for servicemen whose certificate of registration
24is revoked at the time the return is filed, but only if the

 

 

HB4300- 511 -LRB099 14379 HLH 38474 b

1Department's decision to revoke the certificate of
2registration has become final.
3    Where such tangible personal property is sold under a
4conditional sales contract, or under any other form of sale
5wherein the payment of the principal sum, or a part thereof, is
6extended beyond the close of the period for which the return is
7filed, the serviceman, in collecting the tax may collect, for
8each tax return period, only the tax applicable to the part of
9the selling price actually received during such tax return
10period.
11    Except as provided hereinafter in this Section, on or
12before the twentieth day of each calendar month, such
13serviceman shall file a return for the preceding calendar month
14in accordance with reasonable rules and regulations to be
15promulgated by the Department of Revenue. Such return shall be
16filed on a form prescribed by the Department and shall contain
17such information as the Department may reasonably require.
18    The Department may require returns to be filed on a
19quarterly basis. If so required, a return for each calendar
20quarter shall be filed on or before the twentieth day of the
21calendar month following the end of such calendar quarter. The
22taxpayer shall also file a return with the Department for each
23of the first two months of each calendar quarter, on or before
24the twentieth day of the following calendar month, stating:
25        1. The name of the seller;
26        2. The address of the principal place of business from

 

 

HB4300- 512 -LRB099 14379 HLH 38474 b

1    which he engages in business as a serviceman in this State;
2        3. The total amount of taxable receipts received by him
3    during the preceding calendar month, including receipts
4    from charge and time sales, but less all deductions allowed
5    by law;
6        4. The amount of credit provided in Section 2d of this
7    Act;
8        5. The amount of tax due;
9        5-5. The signature of the taxpayer; and
10        6. Such other reasonable information as the Department
11    may require.
12    If a taxpayer fails to sign a return within 30 days after
13the proper notice and demand for signature by the Department,
14the return shall be considered valid and any amount shown to be
15due on the return shall be deemed assessed.
16    Prior to October 1, 2003, and on and after September 1,
172004 a serviceman may accept a Manufacturer's Purchase Credit
18certification from a purchaser in satisfaction of Service Use
19Tax as provided in Section 3-70 of the Service Use Tax Act if
20the purchaser provides the appropriate documentation as
21required by Section 3-70 of the Service Use Tax Act. A
22Manufacturer's Purchase Credit certification, accepted prior
23to October 1, 2003 or on or after September 1, 2004 by a
24serviceman as provided in Section 3-70 of the Service Use Tax
25Act, may be used by that serviceman to satisfy Service
26Occupation Tax liability in the amount claimed in the

 

 

HB4300- 513 -LRB099 14379 HLH 38474 b

1certification, not to exceed 6.25% of the receipts subject to
2tax from a qualifying purchase. A Manufacturer's Purchase
3Credit reported on any original or amended return filed under
4this Act after October 20, 2003 for reporting periods prior to
5September 1, 2004 shall be disallowed. Manufacturer's Purchase
6Credit reported on annual returns due on or after January 1,
72005 will be disallowed for periods prior to September 1, 2004.
8No Manufacturer's Purchase Credit may be used after September
930, 2003 through August 31, 2004 to satisfy any tax liability
10imposed under this Act, including any audit liability.
11    If the serviceman's average monthly tax liability to the
12Department does not exceed $200, the Department may authorize
13his returns to be filed on a quarter annual basis, with the
14return for January, February and March of a given year being
15due by April 20 of such year; with the return for April, May
16and June of a given year being due by July 20 of such year; with
17the return for July, August and September of a given year being
18due by October 20 of such year, and with the return for
19October, November and December of a given year being due by
20January 20 of the following year.
21    If the serviceman's average monthly tax liability to the
22Department does not exceed $50, the Department may authorize
23his returns to be filed on an annual basis, with the return for
24a given year being due by January 20 of the following year.
25    Such quarter annual and annual returns, as to form and
26substance, shall be subject to the same requirements as monthly

 

 

HB4300- 514 -LRB099 14379 HLH 38474 b

1returns.
2    Notwithstanding any other provision in this Act concerning
3the time within which a serviceman may file his return, in the
4case of any serviceman who ceases to engage in a kind of
5business which makes him responsible for filing returns under
6this Act, such serviceman shall file a final return under this
7Act with the Department not more than 1 month after
8discontinuing such business.
9    Beginning October 1, 1993, a taxpayer who has an average
10monthly tax liability of $150,000 or more shall make all
11payments required by rules of the Department by electronic
12funds transfer. Beginning October 1, 1994, a taxpayer who has
13an average monthly tax liability of $100,000 or more shall make
14all payments required by rules of the Department by electronic
15funds transfer. Beginning October 1, 1995, a taxpayer who has
16an average monthly tax liability of $50,000 or more shall make
17all payments required by rules of the Department by electronic
18funds transfer. Beginning October 1, 2000, a taxpayer who has
19an annual tax liability of $200,000 or more shall make all
20payments required by rules of the Department by electronic
21funds transfer. The term "annual tax liability" shall be the
22sum of the taxpayer's liabilities under this Act, and under all
23other State and local occupation and use tax laws administered
24by the Department, for the immediately preceding calendar year.
25The term "average monthly tax liability" means the sum of the
26taxpayer's liabilities under this Act, and under all other

 

 

HB4300- 515 -LRB099 14379 HLH 38474 b

1State and local occupation and use tax laws administered by the
2Department, for the immediately preceding calendar year
3divided by 12. Beginning on October 1, 2002, a taxpayer who has
4a tax liability in the amount set forth in subsection (b) of
5Section 2505-210 of the Department of Revenue Law shall make
6all payments required by rules of the Department by electronic
7funds transfer.
8    Before August 1 of each year beginning in 1993, the
9Department shall notify all taxpayers required to make payments
10by electronic funds transfer. All taxpayers required to make
11payments by electronic funds transfer shall make those payments
12for a minimum of one year beginning on October 1.
13    Any taxpayer not required to make payments by electronic
14funds transfer may make payments by electronic funds transfer
15with the permission of the Department.
16    All taxpayers required to make payment by electronic funds
17transfer and any taxpayers authorized to voluntarily make
18payments by electronic funds transfer shall make those payments
19in the manner authorized by the Department.
20    The Department shall adopt such rules as are necessary to
21effectuate a program of electronic funds transfer and the
22requirements of this Section.
23    Where a serviceman collects the tax with respect to the
24selling price of tangible personal property which he sells and
25the purchaser thereafter returns such tangible personal
26property and the serviceman refunds the selling price thereof

 

 

HB4300- 516 -LRB099 14379 HLH 38474 b

1to the purchaser, such serviceman shall also refund, to the
2purchaser, the tax so collected from the purchaser. When filing
3his return for the period in which he refunds such tax to the
4purchaser, the serviceman may deduct the amount of the tax so
5refunded by him to the purchaser from any other Service
6Occupation Tax, Service Use Tax, Retailers' Occupation Tax or
7Use Tax which such serviceman may be required to pay or remit
8to the Department, as shown by such return, provided that the
9amount of the tax to be deducted shall previously have been
10remitted to the Department by such serviceman. If the
11serviceman shall not previously have remitted the amount of
12such tax to the Department, he shall be entitled to no
13deduction hereunder upon refunding such tax to the purchaser.
14    If experience indicates such action to be practicable, the
15Department may prescribe and furnish a combination or joint
16return which will enable servicemen, who are required to file
17returns hereunder and also under the Retailers' Occupation Tax
18Act, the Use Tax Act or the Service Use Tax Act, to furnish all
19the return information required by all said Acts on the one
20form.
21    Where the serviceman has more than one business registered
22with the Department under separate registrations hereunder,
23such serviceman shall file separate returns for each registered
24business.
25    Beginning January 1, 1990, each month the Department shall
26pay into the Local Government Tax Fund the revenue realized for

 

 

HB4300- 517 -LRB099 14379 HLH 38474 b

1the preceding month from the 1% tax on sales of food for human
2consumption which is to be consumed off the premises where it
3is sold (other than alcoholic beverages, soft drinks and food
4which has been prepared for immediate consumption) and
5prescription and nonprescription medicines, drugs, medical
6appliances and insulin, urine testing materials, syringes and
7needles used by diabetics.
8    Beginning January 1, 1990, each month the Department shall
9pay into the County and Mass Transit District Fund 4% of the
10revenue realized for the preceding month from the 6.25% general
11rate.
12    Beginning August 1, 2000, each month the Department shall
13pay into the County and Mass Transit District Fund 20% of the
14net revenue realized for the preceding month from the 1.25%
15rate on the selling price of motor fuel and gasohol.
16    Beginning January 1, 1990, each month the Department shall
17pay into the Local Government Tax Fund 16% of the revenue
18realized for the preceding month from the 6.25% general rate on
19transfers of tangible personal property.
20    Beginning August 1, 2000, each month the Department shall
21pay into the Local Government Tax Fund 80% of the net revenue
22realized for the preceding month from the 1.25% rate on the
23selling price of motor fuel and gasohol.
24    Beginning October 1, 2009, each month the Department shall
25pay into the Capital Projects Fund an amount that is equal to
26an amount estimated by the Department to represent 80% of the

 

 

HB4300- 518 -LRB099 14379 HLH 38474 b

1net revenue realized for the preceding month from the sale of
2candy, grooming and hygiene products, and soft drinks that had
3been taxed at a rate of 1% prior to September 1, 2009 but that
4are now taxed at 6.25%.
5    Beginning July 1, 2013, each month the Department shall pay
6into the Underground Storage Tank Fund from the proceeds
7collected under this Act, the Use Tax Act, the Service Use Tax
8Act, and the Retailers' Occupation Tax Act an amount equal to
9the average monthly deficit in the Underground Storage Tank
10Fund during the prior year, as certified annually by the
11Illinois Environmental Protection Agency, but the total
12payment into the Underground Storage Tank Fund under this Act,
13the Use Tax Act, the Service Use Tax Act, and the Retailers'
14Occupation Tax Act shall not exceed $18,000,000 in any State
15fiscal year. As used in this paragraph, the "average monthly
16deficit" shall be equal to the difference between the average
17monthly claims for payment by the fund and the average monthly
18revenues deposited into the fund, excluding payments made
19pursuant to this paragraph.
20    Beginning July 1, 2015, of the remainder of the moneys
21received by the Department under the Use Tax Act, the Service
22Use Tax Act, this Act, and the Retailers' Occupation Tax Act,
23each month the Department shall deposit $500,000 into the State
24Crime Laboratory Fund.
25    Of the remainder of the moneys received by the Department
26pursuant to this Act, (a) 1.75% thereof shall be paid into the

 

 

HB4300- 519 -LRB099 14379 HLH 38474 b

1Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
2and after July 1, 1989, 3.8% thereof shall be paid into the
3Build Illinois Fund; provided, however, that if in any fiscal
4year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
5may be, of the moneys received by the Department and required
6to be paid into the Build Illinois Fund pursuant to Section 3
7of the Retailers' Occupation Tax Act, Section 9 of the Use Tax
8Act, Section 9 of the Service Use Tax Act, and Section 9 of the
9Service Occupation Tax Act, such Acts being hereinafter called
10the "Tax Acts" and such aggregate of 2.2% or 3.8%, as the case
11may be, of moneys being hereinafter called the "Tax Act
12Amount", and (2) the amount transferred to the Build Illinois
13Fund from the State and Local Sales Tax Reform Fund shall be
14less than the Annual Specified Amount (as defined in Section 3
15of the Retailers' Occupation Tax Act), an amount equal to the
16difference shall be immediately paid into the Build Illinois
17Fund from other moneys received by the Department pursuant to
18the Tax Acts; and further provided, that if on the last
19business day of any month the sum of (1) the Tax Act Amount
20required to be deposited into the Build Illinois Account in the
21Build Illinois Fund during such month and (2) the amount
22transferred during such month to the Build Illinois Fund from
23the State and Local Sales Tax Reform Fund shall have been less
24than 1/12 of the Annual Specified Amount, an amount equal to
25the difference shall be immediately paid into the Build
26Illinois Fund from other moneys received by the Department

 

 

HB4300- 520 -LRB099 14379 HLH 38474 b

1pursuant to the Tax Acts; and, further provided, that in no
2event shall the payments required under the preceding proviso
3result in aggregate payments into the Build Illinois Fund
4pursuant to this clause (b) for any fiscal year in excess of
5the greater of (i) the Tax Act Amount or (ii) the Annual
6Specified Amount for such fiscal year; and, further provided,
7that the amounts payable into the Build Illinois Fund under
8this clause (b) shall be payable only until such time as the
9aggregate amount on deposit under each trust indenture securing
10Bonds issued and outstanding pursuant to the Build Illinois
11Bond Act is sufficient, taking into account any future
12investment income, to fully provide, in accordance with such
13indenture, for the defeasance of or the payment of the
14principal of, premium, if any, and interest on the Bonds
15secured by such indenture and on any Bonds expected to be
16issued thereafter and all fees and costs payable with respect
17thereto, all as certified by the Director of the Bureau of the
18Budget (now Governor's Office of Management and Budget). If on
19the last business day of any month in which Bonds are
20outstanding pursuant to the Build Illinois Bond Act, the
21aggregate of the moneys deposited in the Build Illinois Bond
22Account in the Build Illinois Fund in such month shall be less
23than the amount required to be transferred in such month from
24the Build Illinois Bond Account to the Build Illinois Bond
25Retirement and Interest Fund pursuant to Section 13 of the
26Build Illinois Bond Act, an amount equal to such deficiency

 

 

HB4300- 521 -LRB099 14379 HLH 38474 b

1shall be immediately paid from other moneys received by the
2Department pursuant to the Tax Acts to the Build Illinois Fund;
3provided, however, that any amounts paid to the Build Illinois
4Fund in any fiscal year pursuant to this sentence shall be
5deemed to constitute payments pursuant to clause (b) of the
6preceding sentence and shall reduce the amount otherwise
7payable for such fiscal year pursuant to clause (b) of the
8preceding sentence. The moneys received by the Department
9pursuant to this Act and required to be deposited into the
10Build Illinois Fund are subject to the pledge, claim and charge
11set forth in Section 12 of the Build Illinois Bond Act.
12    Subject to payment of amounts into the Build Illinois Fund
13as provided in the preceding paragraph or in any amendment
14thereto hereafter enacted, the following specified monthly
15installment of the amount requested in the certificate of the
16Chairman of the Metropolitan Pier and Exposition Authority
17provided under Section 8.25f of the State Finance Act, but not
18in excess of the sums designated as "Total Deposit", shall be
19deposited in the aggregate from collections under Section 9 of
20the Use Tax Act, Section 9 of the Service Use Tax Act, Section
219 of the Service Occupation Tax Act, and Section 3 of the
22Retailers' Occupation Tax Act into the McCormick Place
23Expansion Project Fund in the specified fiscal years.
24Fiscal YearTotal Deposit
251993         $0

 

 

HB4300- 522 -LRB099 14379 HLH 38474 b

11994 53,000,000
21995 58,000,000
31996 61,000,000
41997 64,000,000
51998 68,000,000
61999 71,000,000
72000 75,000,000
82001 80,000,000
92002 93,000,000
102003 99,000,000
112004103,000,000
122005108,000,000
132006113,000,000
142007119,000,000
152008126,000,000
162009132,000,000
172010139,000,000
182011146,000,000
192012153,000,000
202013161,000,000
212014170,000,000
222015179,000,000
232016189,000,000
242017199,000,000
252018210,000,000
262019221,000,000

 

 

HB4300- 523 -LRB099 14379 HLH 38474 b

12020233,000,000
22021246,000,000
32022260,000,000
42023275,000,000
52024 275,000,000
62025 275,000,000
72026 279,000,000
82027 292,000,000
92028 307,000,000
102029 322,000,000
112030 338,000,000
122031 350,000,000
132032 350,000,000
14and
15each fiscal year
16thereafter that bonds
17are outstanding under
18Section 13.2 of the
19Metropolitan Pier and
20Exposition Authority Act,
21but not after fiscal year 2060.
22    Beginning July 20, 1993 and in each month of each fiscal
23year thereafter, one-eighth of the amount requested in the
24certificate of the Chairman of the Metropolitan Pier and
25Exposition Authority for that fiscal year, less the amount
26deposited into the McCormick Place Expansion Project Fund by

 

 

HB4300- 524 -LRB099 14379 HLH 38474 b

1the State Treasurer in the respective month under subsection
2(g) of Section 13 of the Metropolitan Pier and Exposition
3Authority Act, plus cumulative deficiencies in the deposits
4required under this Section for previous months and years,
5shall be deposited into the McCormick Place Expansion Project
6Fund, until the full amount requested for the fiscal year, but
7not in excess of the amount specified above as "Total Deposit",
8has been deposited.
9    Subject to payment of amounts into the Build Illinois Fund
10and the McCormick Place Expansion Project Fund pursuant to the
11preceding paragraphs or in any amendments thereto hereafter
12enacted, beginning July 1, 1993 and ending on September 30,
132013, the Department shall each month pay into the Illinois Tax
14Increment Fund 0.27% of 80% of the net revenue realized for the
15preceding month from the 6.25% general rate on the selling
16price of tangible personal property.
17    Subject to payment of amounts into the Build Illinois Fund
18and the McCormick Place Expansion Project Fund pursuant to the
19preceding paragraphs or in any amendments thereto hereafter
20enacted, beginning with the receipt of the first report of
21taxes paid by an eligible business and continuing for a 25-year
22period, the Department shall each month pay into the Energy
23Infrastructure Fund 80% of the net revenue realized from the
246.25% general rate on the selling price of Illinois-mined coal
25that was sold to an eligible business. For purposes of this
26paragraph, the term "eligible business" means a new electric

 

 

HB4300- 525 -LRB099 14379 HLH 38474 b

1generating facility certified pursuant to Section 605-332 of
2the Department of Commerce and Economic Opportunity Law of the
3Civil Administrative Code of Illinois.
4    Subject to payment of amounts into the Build Illinois Fund,
5the McCormick Place Expansion Project Fund, the Illinois Tax
6Increment Fund, and the Energy Infrastructure Fund pursuant to
7the preceding paragraphs or in any amendments to this Section
8hereafter enacted, beginning on the first day of the first
9calendar month to occur on or after the effective date of this
10amendatory Act of the 98th General Assembly, each month, from
11the collections made under Section 9 of the Use Tax Act,
12Section 9 of the Service Use Tax Act, Section 9 of the Service
13Occupation Tax Act, and Section 3 of the Retailers' Occupation
14Tax Act, the Department shall pay into the Tax Compliance and
15Administration Fund, to be used, subject to appropriation, to
16fund additional auditors and compliance personnel at the
17Department of Revenue, an amount equal to 1/12 of 5% of 80% of
18the cash receipts collected during the preceding fiscal year by
19the Audit Bureau of the Department under the Use Tax Act, the
20Service Use Tax Act, the Service Occupation Tax Act, the
21Retailers' Occupation Tax Act, and associated local occupation
22and use taxes administered by the Department.
23    Of the remainder of the moneys received by the Department
24pursuant to this Act, 75% shall be paid into the General
25Revenue Fund of the State Treasury and 25% shall be reserved in
26a special account and used only for the transfer to the Common

 

 

HB4300- 526 -LRB099 14379 HLH 38474 b

1School Fund as part of the monthly transfer from the General
2Revenue Fund in accordance with Section 8a of the State Finance
3Act.
4    The Department may, upon separate written notice to a
5taxpayer, require the taxpayer to prepare and file with the
6Department on a form prescribed by the Department within not
7less than 60 days after receipt of the notice an annual
8information return for the tax year specified in the notice.
9Such annual return to the Department shall include a statement
10of gross receipts as shown by the taxpayer's last Federal
11income tax return. If the total receipts of the business as
12reported in the Federal income tax return do not agree with the
13gross receipts reported to the Department of Revenue for the
14same period, the taxpayer shall attach to his annual return a
15schedule showing a reconciliation of the 2 amounts and the
16reasons for the difference. The taxpayer's annual return to the
17Department shall also disclose the cost of goods sold by the
18taxpayer during the year covered by such return, opening and
19closing inventories of such goods for such year, cost of goods
20used from stock or taken from stock and given away by the
21taxpayer during such year, pay roll information of the
22taxpayer's business during such year and any additional
23reasonable information which the Department deems would be
24helpful in determining the accuracy of the monthly, quarterly
25or annual returns filed by such taxpayer as hereinbefore
26provided for in this Section.

 

 

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1    If the annual information return required by this Section
2is not filed when and as required, the taxpayer shall be liable
3as follows:
4        (i) Until January 1, 1994, the taxpayer shall be liable
5    for a penalty equal to 1/6 of 1% of the tax due from such
6    taxpayer under this Act during the period to be covered by
7    the annual return for each month or fraction of a month
8    until such return is filed as required, the penalty to be
9    assessed and collected in the same manner as any other
10    penalty provided for in this Act.
11        (ii) On and after January 1, 1994, the taxpayer shall
12    be liable for a penalty as described in Section 3-4 of the
13    Uniform Penalty and Interest Act.
14    The chief executive officer, proprietor, owner or highest
15ranking manager shall sign the annual return to certify the
16accuracy of the information contained therein. Any person who
17willfully signs the annual return containing false or
18inaccurate information shall be guilty of perjury and punished
19accordingly. The annual return form prescribed by the
20Department shall include a warning that the person signing the
21return may be liable for perjury.
22    The foregoing portion of this Section concerning the filing
23of an annual information return shall not apply to a serviceman
24who is not required to file an income tax return with the
25United States Government.
26    As soon as possible after the first day of each month, upon

 

 

HB4300- 528 -LRB099 14379 HLH 38474 b

1certification of the Department of Revenue, the Comptroller
2shall order transferred and the Treasurer shall transfer from
3the General Revenue Fund to the Motor Fuel Tax Fund an amount
4equal to 1.7% of 80% of the net revenue realized under this Act
5for the second preceding month. Beginning April 1, 2000, this
6transfer is no longer required and shall not be made.
7    Net revenue realized for a month shall be the revenue
8collected by the State pursuant to this Act, less the amount
9paid out during that month as refunds to taxpayers for
10overpayment of liability.
11    For greater simplicity of administration, it shall be
12permissible for manufacturers, importers and wholesalers whose
13products are sold by numerous servicemen in Illinois, and who
14wish to do so, to assume the responsibility for accounting and
15paying to the Department all tax accruing under this Act with
16respect to such sales, if the servicemen who are affected do
17not make written objection to the Department to this
18arrangement.
19(Source: P.A. 98-24, eff. 6-19-13; 98-109, eff. 7-25-13;
2098-298, eff. 8-9-13; 98-496, eff. 1-1-14; 98-756, eff. 7-16-14;
2198-1098, eff. 8-26-14; 99-352, eff. 8-12-15.)
 
22    Section 50-20. The Retailers' Occupation Tax Act is amended
23by changing Section 3 as follows:
 
24    (35 ILCS 120/3)  (from Ch. 120, par. 442)

 

 

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1    Sec. 3. Except as provided in this Section, on or before
2the twentieth day of each calendar month, every person engaged
3in the business of selling tangible personal property at retail
4in this State during the preceding calendar month shall file a
5return with the Department, stating:
6        1. The name of the seller;
7        2. His residence address and the address of his
8    principal place of business and the address of the
9    principal place of business (if that is a different
10    address) from which he engages in the business of selling
11    tangible personal property at retail in this State;
12        3. Total amount of receipts received by him during the
13    preceding calendar month or quarter, as the case may be,
14    from sales of tangible personal property, and from services
15    furnished, by him during such preceding calendar month or
16    quarter;
17        4. Total amount received by him during the preceding
18    calendar month or quarter on charge and time sales of
19    tangible personal property, and from services furnished,
20    by him prior to the month or quarter for which the return
21    is filed;
22        5. Deductions allowed by law;
23        6. Gross receipts which were received by him during the
24    preceding calendar month or quarter and upon the basis of
25    which the tax is imposed;
26        7. The amount of credit provided in Section 2d of this

 

 

HB4300- 530 -LRB099 14379 HLH 38474 b

1    Act;
2        8. The amount of tax due;
3        9. The signature of the taxpayer; and
4        10. Such other reasonable information as the
5    Department may require.
6    If a taxpayer fails to sign a return within 30 days after
7the proper notice and demand for signature by the Department,
8the return shall be considered valid and any amount shown to be
9due on the return shall be deemed assessed.
10    Each return shall be accompanied by the statement of
11prepaid tax issued pursuant to Section 2e for which credit is
12claimed.
13    Prior to October 1, 2003, and on and after September 1,
142004 a retailer may accept a Manufacturer's Purchase Credit
15certification from a purchaser in satisfaction of Use Tax as
16provided in Section 3-85 of the Use Tax Act if the purchaser
17provides the appropriate documentation as required by Section
183-85 of the Use Tax Act. A Manufacturer's Purchase Credit
19certification, accepted by a retailer prior to October 1, 2003
20and on and after September 1, 2004 as provided in Section 3-85
21of the Use Tax Act, may be used by that retailer to satisfy
22Retailers' Occupation Tax liability in the amount claimed in
23the certification, not to exceed 6.25% of the receipts subject
24to tax from a qualifying purchase. A Manufacturer's Purchase
25Credit reported on any original or amended return filed under
26this Act after October 20, 2003 for reporting periods prior to

 

 

HB4300- 531 -LRB099 14379 HLH 38474 b

1September 1, 2004 shall be disallowed. Manufacturer's
2Purchaser Credit reported on annual returns due on or after
3January 1, 2005 will be disallowed for periods prior to
4September 1, 2004. No Manufacturer's Purchase Credit may be
5used after September 30, 2003 through August 31, 2004 to
6satisfy any tax liability imposed under this Act, including any
7audit liability.
8    The Department may require returns to be filed on a
9quarterly basis. If so required, a return for each calendar
10quarter shall be filed on or before the twentieth day of the
11calendar month following the end of such calendar quarter. The
12taxpayer shall also file a return with the Department for each
13of the first two months of each calendar quarter, on or before
14the twentieth day of the following calendar month, stating:
15        1. The name of the seller;
16        2. The address of the principal place of business from
17    which he engages in the business of selling tangible
18    personal property at retail in this State;
19        3. The total amount of taxable receipts received by him
20    during the preceding calendar month from sales of tangible
21    personal property by him during such preceding calendar
22    month, including receipts from charge and time sales, but
23    less all deductions allowed by law;
24        4. The amount of credit provided in Section 2d of this
25    Act;
26        5. The amount of tax due; and

 

 

HB4300- 532 -LRB099 14379 HLH 38474 b

1        6. Such other reasonable information as the Department
2    may require.
3    Beginning on October 1, 2003, any person who is not a
4licensed distributor, importing distributor, or manufacturer,
5as defined in the Liquor Control Act of 1934, but is engaged in
6the business of selling, at retail, alcoholic liquor shall file
7a statement with the Department of Revenue, in a format and at
8a time prescribed by the Department, showing the total amount
9paid for alcoholic liquor purchased during the preceding month
10and such other information as is reasonably required by the
11Department. The Department may adopt rules to require that this
12statement be filed in an electronic or telephonic format. Such
13rules may provide for exceptions from the filing requirements
14of this paragraph. For the purposes of this paragraph, the term
15"alcoholic liquor" shall have the meaning prescribed in the
16Liquor Control Act of 1934.
17    Beginning on October 1, 2003, every distributor, importing
18distributor, and manufacturer of alcoholic liquor as defined in
19the Liquor Control Act of 1934, shall file a statement with the
20Department of Revenue, no later than the 10th day of the month
21for the preceding month during which transactions occurred, by
22electronic means, showing the total amount of gross receipts
23from the sale of alcoholic liquor sold or distributed during
24the preceding month to purchasers; identifying the purchaser to
25whom it was sold or distributed; the purchaser's tax
26registration number; and such other information reasonably

 

 

HB4300- 533 -LRB099 14379 HLH 38474 b

1required by the Department. A distributor, importing
2distributor, or manufacturer of alcoholic liquor must
3personally deliver, mail, or provide by electronic means to
4each retailer listed on the monthly statement a report
5containing a cumulative total of that distributor's, importing
6distributor's, or manufacturer's total sales of alcoholic
7liquor to that retailer no later than the 10th day of the month
8for the preceding month during which the transaction occurred.
9The distributor, importing distributor, or manufacturer shall
10notify the retailer as to the method by which the distributor,
11importing distributor, or manufacturer will provide the sales
12information. If the retailer is unable to receive the sales
13information by electronic means, the distributor, importing
14distributor, or manufacturer shall furnish the sales
15information by personal delivery or by mail. For purposes of
16this paragraph, the term "electronic means" includes, but is
17not limited to, the use of a secure Internet website, e-mail,
18or facsimile.
19    If a total amount of less than $1 is payable, refundable or
20creditable, such amount shall be disregarded if it is less than
2150 cents and shall be increased to $1 if it is 50 cents or more.
22    Beginning October 1, 1993, a taxpayer who has an average
23monthly tax liability of $150,000 or more shall make all
24payments required by rules of the Department by electronic
25funds transfer. Beginning October 1, 1994, a taxpayer who has
26an average monthly tax liability of $100,000 or more shall make

 

 

HB4300- 534 -LRB099 14379 HLH 38474 b

1all payments required by rules of the Department by electronic
2funds transfer. Beginning October 1, 1995, a taxpayer who has
3an average monthly tax liability of $50,000 or more shall make
4all payments required by rules of the Department by electronic
5funds transfer. Beginning October 1, 2000, a taxpayer who has
6an annual tax liability of $200,000 or more shall make all
7payments required by rules of the Department by electronic
8funds transfer. The term "annual tax liability" shall be the
9sum of the taxpayer's liabilities under this Act, and under all
10other State and local occupation and use tax laws administered
11by the Department, for the immediately preceding calendar year.
12The term "average monthly tax liability" shall be the sum of
13the taxpayer's liabilities under this Act, and under all other
14State and local occupation and use tax laws administered by the
15Department, for the immediately preceding calendar year
16divided by 12. Beginning on October 1, 2002, a taxpayer who has
17a tax liability in the amount set forth in subsection (b) of
18Section 2505-210 of the Department of Revenue Law shall make
19all payments required by rules of the Department by electronic
20funds transfer.
21    Before August 1 of each year beginning in 1993, the
22Department shall notify all taxpayers required to make payments
23by electronic funds transfer. All taxpayers required to make
24payments by electronic funds transfer shall make those payments
25for a minimum of one year beginning on October 1.
26    Any taxpayer not required to make payments by electronic

 

 

HB4300- 535 -LRB099 14379 HLH 38474 b

1funds transfer may make payments by electronic funds transfer
2with the permission of the Department.
3    All taxpayers required to make payment by electronic funds
4transfer and any taxpayers authorized to voluntarily make
5payments by electronic funds transfer shall make those payments
6in the manner authorized by the Department.
7    The Department shall adopt such rules as are necessary to
8effectuate a program of electronic funds transfer and the
9requirements of this Section.
10    Any amount which is required to be shown or reported on any
11return or other document under this Act shall, if such amount
12is not a whole-dollar amount, be increased to the nearest
13whole-dollar amount in any case where the fractional part of a
14dollar is 50 cents or more, and decreased to the nearest
15whole-dollar amount where the fractional part of a dollar is
16less than 50 cents.
17    If the retailer is otherwise required to file a monthly
18return and if the retailer's average monthly tax liability to
19the Department does not exceed $200, the Department may
20authorize his returns to be filed on a quarter annual basis,
21with the return for January, February and March of a given year
22being due by April 20 of such year; with the return for April,
23May and June of a given year being due by July 20 of such year;
24with the return for July, August and September of a given year
25being due by October 20 of such year, and with the return for
26October, November and December of a given year being due by

 

 

HB4300- 536 -LRB099 14379 HLH 38474 b

1January 20 of the following year.
2    If the retailer is otherwise required to file a monthly or
3quarterly return and if the retailer's average monthly tax
4liability with the Department does not exceed $50, the
5Department may authorize his returns to be filed on an annual
6basis, with the return for a given year being due by January 20
7of the following year.
8    Such quarter annual and annual returns, as to form and
9substance, shall be subject to the same requirements as monthly
10returns.
11    Notwithstanding any other provision in this Act concerning
12the time within which a retailer may file his return, in the
13case of any retailer who ceases to engage in a kind of business
14which makes him responsible for filing returns under this Act,
15such retailer shall file a final return under this Act with the
16Department not more than one month after discontinuing such
17business.
18    Where the same person has more than one business registered
19with the Department under separate registrations under this
20Act, such person may not file each return that is due as a
21single return covering all such registered businesses, but
22shall file separate returns for each such registered business.
23    In addition, with respect to motor vehicles, watercraft,
24aircraft, and trailers that are required to be registered with
25an agency of this State, every retailer selling this kind of
26tangible personal property shall file, with the Department,

 

 

HB4300- 537 -LRB099 14379 HLH 38474 b

1upon a form to be prescribed and supplied by the Department, a
2separate return for each such item of tangible personal
3property which the retailer sells, except that if, in the same
4transaction, (i) a retailer of aircraft, watercraft, motor
5vehicles or trailers transfers more than one aircraft,
6watercraft, motor vehicle or trailer to another aircraft,
7watercraft, motor vehicle retailer or trailer retailer for the
8purpose of resale or (ii) a retailer of aircraft, watercraft,
9motor vehicles, or trailers transfers more than one aircraft,
10watercraft, motor vehicle, or trailer to a purchaser for use as
11a qualifying rolling stock as provided in Section 2-5 of this
12Act, then that seller may report the transfer of all aircraft,
13watercraft, motor vehicles or trailers involved in that
14transaction to the Department on the same uniform
15invoice-transaction reporting return form. For purposes of
16this Section, "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    Any retailer who sells only motor vehicles, watercraft,
21aircraft, or trailers that are required to be registered with
22an agency of this State, so that all retailers' occupation tax
23liability is required to be reported, and is reported, on such
24transaction reporting returns and who is not otherwise required
25to file monthly or quarterly returns, need not file monthly or
26quarterly returns. However, those retailers shall be required

 

 

HB4300- 538 -LRB099 14379 HLH 38474 b

1to file returns on an annual basis.
2    The transaction reporting return, in the case of motor
3vehicles or trailers that are required to be registered with an
4agency of this State, shall be the same document as the Uniform
5Invoice referred to in Section 5-402 of The Illinois Vehicle
6Code and must show the name and address of the seller; the name
7and address of the purchaser; the amount of the selling price
8including the amount allowed by the retailer for traded-in
9property, if any; the amount allowed by the retailer for the
10traded-in tangible personal property, if any, to the extent to
11which Section 1 of this Act allows an exemption for the value
12of traded-in property; the balance payable after deducting such
13trade-in allowance from the total selling price; the amount of
14tax due from the retailer with respect to such transaction; the
15amount of tax collected from the purchaser by the retailer on
16such transaction (or satisfactory evidence that such tax is not
17due in that particular instance, if that is claimed to be the
18fact); the place and date of the sale; a sufficient
19identification of the property sold; such other information as
20is required in Section 5-402 of The Illinois Vehicle Code, and
21such other information as the Department may reasonably
22require.
23    The transaction reporting return in the case of watercraft
24or aircraft must show the name and address of the seller; the
25name and address of the purchaser; the amount of the selling
26price including the amount allowed by the retailer for

 

 

HB4300- 539 -LRB099 14379 HLH 38474 b

1traded-in property, if any; the amount allowed by the retailer
2for the traded-in tangible personal property, if any, to the
3extent to which Section 1 of this Act allows an exemption for
4the value of traded-in property; the balance payable after
5deducting such trade-in allowance from the total selling price;
6the amount of tax due from the retailer with respect to such
7transaction; the amount of tax collected from the purchaser by
8the retailer on such transaction (or satisfactory evidence that
9such tax is not due in that particular instance, if that is
10claimed to be the fact); the place and date of the sale, a
11sufficient identification of the property sold, and such other
12information as the Department may reasonably require.
13    Such transaction reporting return shall be filed not later
14than 20 days after the day of delivery of the item that is
15being sold, but may be filed by the retailer at any time sooner
16than that if he chooses to do so. The transaction reporting
17return and tax remittance or proof of exemption from the
18Illinois use tax may be transmitted to the Department by way of
19the State agency with which, or State officer with whom the
20tangible personal property must be titled or registered (if
21titling or registration is required) if the Department and such
22agency or State officer determine that this procedure will
23expedite the processing of applications for title or
24registration.
25    With each such transaction reporting return, the retailer
26shall remit the proper amount of tax due (or shall submit

 

 

HB4300- 540 -LRB099 14379 HLH 38474 b

1satisfactory evidence that the sale is not taxable if that is
2the case), to the Department or its agents, whereupon the
3Department shall issue, in the purchaser's name, a use tax
4receipt (or a certificate of exemption if the Department is
5satisfied that the particular sale is tax exempt) which such
6purchaser may submit to the agency with which, or State officer
7with whom, he must title or register the tangible personal
8property that is involved (if titling or registration is
9required) in support of such purchaser's application for an
10Illinois certificate or other evidence of title or registration
11to such tangible personal property.
12    No retailer's failure or refusal to remit tax under this
13Act precludes a user, who has paid the proper tax to the
14retailer, from obtaining his certificate of title or other
15evidence of title or registration (if titling or registration
16is required) upon satisfying the Department that such user has
17paid the proper tax (if tax is due) to the retailer. The
18Department shall adopt appropriate rules to carry out the
19mandate of this paragraph.
20    If the user who would otherwise pay tax to the retailer
21wants the transaction reporting return filed and the payment of
22the tax or proof of exemption made to the Department before the
23retailer is willing to take these actions and such user has not
24paid the tax to the retailer, such user may certify to the fact
25of such delay by the retailer and may (upon the Department
26being satisfied of the truth of such certification) transmit

 

 

HB4300- 541 -LRB099 14379 HLH 38474 b

1the information required by the transaction reporting return
2and the remittance for tax or proof of exemption directly to
3the Department and obtain his tax receipt or exemption
4determination, in which event the transaction reporting return
5and tax remittance (if a tax payment was required) shall be
6credited by the Department to the proper retailer's account
7with the Department, but without the vendor's 2.1% or 1.75%
8discount provided for in this Section being allowed. When the
9user pays the tax directly to the Department, he shall pay the
10tax in the same amount and in the same form in which it would be
11remitted if the tax had been remitted to the Department by the
12retailer.
13    Refunds made by the seller during the preceding return
14period to purchasers, on account of tangible personal property
15returned to the seller, shall be allowed as a deduction under
16subdivision 5 of his monthly or quarterly return, as the case
17may be, in case the seller had theretofore included the
18receipts from the sale of such tangible personal property in a
19return filed by him and had paid the tax imposed by this Act
20with respect to such receipts.
21    Where the seller is a corporation, the return filed on
22behalf of such corporation shall be signed by the president,
23vice-president, secretary or treasurer or by the properly
24accredited agent of such corporation.
25    Where the seller is a limited liability company, the return
26filed on behalf of the limited liability company shall be

 

 

HB4300- 542 -LRB099 14379 HLH 38474 b

1signed by a manager, member, or properly accredited agent of
2the limited liability company.
3    Except as provided in this Section, the retailer filing the
4return under this Section shall, at the time of filing such
5return, pay to the Department the amount of tax imposed by this
6Act less a discount of 2.1% prior to January 1, 1990, and 1.75%
7on and after January 1, 1990 and prior to July 1, 2016, and
80.75% on and after July 1, 2016, or $5 per calendar year,
9whichever is greater, which is allowed to reimburse the
10retailer for the expenses incurred in keeping records,
11preparing and filing returns, remitting the tax and supplying
12data to the Department on request. Any prepayment made pursuant
13to Section 2d of this Act shall be included in the amount on
14which such 2.1% or 1.75% discount is computed. In the case of
15retailers who report and pay the tax on a transaction by
16transaction basis, as provided in this Section, such discount
17shall be taken with each such tax remittance instead of when
18such retailer files his periodic return. The Department may
19disallow the discount for retailers whose certificate of
20registration is revoked at the time the return is filed, but
21only if the Department's decision to revoke the certificate of
22registration has become final.
23    Before October 1, 2000, if the taxpayer's average monthly
24tax liability to the Department under this Act, the Use Tax
25Act, the Service Occupation Tax Act, and the Service Use Tax
26Act, excluding any liability for prepaid sales tax to be

 

 

HB4300- 543 -LRB099 14379 HLH 38474 b

1remitted in accordance with Section 2d of this Act, was $10,000
2or more during the preceding 4 complete calendar quarters, he
3shall file a return with the Department each month by the 20th
4day of the month next following the month during which such tax
5liability is incurred and shall make payments to the Department
6on or before the 7th, 15th, 22nd and last day of the month
7during which such liability is incurred. On and after October
81, 2000, if the taxpayer's average monthly tax liability to the
9Department under this Act, the Use Tax Act, the Service
10Occupation Tax Act, and the Service Use Tax Act, excluding any
11liability for prepaid sales tax to be remitted in accordance
12with Section 2d of this Act, was $20,000 or more during the
13preceding 4 complete calendar quarters, he shall file a return
14with the Department each month by the 20th day of the month
15next following the month during which such tax liability is
16incurred and shall make payment to the Department on or before
17the 7th, 15th, 22nd and last day of the month during which such
18liability is incurred. If the month during which such tax
19liability is incurred began prior to January 1, 1985, each
20payment shall be in an amount equal to 1/4 of the taxpayer's
21actual liability for the month or an amount set by the
22Department not to exceed 1/4 of the average monthly liability
23of the taxpayer to the Department for the preceding 4 complete
24calendar quarters (excluding the month of highest liability and
25the month of lowest liability in such 4 quarter period). If the
26month during which such tax liability is incurred begins on or

 

 

HB4300- 544 -LRB099 14379 HLH 38474 b

1after January 1, 1985 and prior to January 1, 1987, each
2payment shall be in an amount equal to 22.5% of the taxpayer's
3actual liability for the month or 27.5% of the taxpayer's
4liability for the same calendar month of the preceding year. If
5the month during which such tax liability is incurred begins on
6or after January 1, 1987 and prior to January 1, 1988, each
7payment shall be in an amount equal to 22.5% of the taxpayer's
8actual liability for the month or 26.25% of the taxpayer's
9liability for the same calendar month of the preceding year. If
10the month during which such tax liability is incurred begins on
11or after January 1, 1988, and prior to January 1, 1989, or
12begins on or after January 1, 1996, each payment shall be in an
13amount equal to 22.5% of the taxpayer's actual liability for
14the month or 25% of the taxpayer's liability for the same
15calendar month of the preceding year. If the month during which
16such tax liability is incurred begins on or after January 1,
171989, and prior to January 1, 1996, each payment shall be in an
18amount equal to 22.5% of the taxpayer's actual liability for
19the month or 25% of the taxpayer's liability for the same
20calendar month of the preceding year or 100% of the taxpayer's
21actual liability for the quarter monthly reporting period. The
22amount of such quarter monthly payments shall be credited
23against the final tax liability of the taxpayer's return for
24that month. Before October 1, 2000, once applicable, the
25requirement of the making of quarter monthly payments to the
26Department by taxpayers having an average monthly tax liability

 

 

HB4300- 545 -LRB099 14379 HLH 38474 b

1of $10,000 or more as determined in the manner provided above
2shall continue until such taxpayer's average monthly liability
3to the Department during the preceding 4 complete calendar
4quarters (excluding the month of highest liability and the
5month of lowest liability) is less than $9,000, or until such
6taxpayer's average monthly liability to the Department as
7computed for each calendar quarter of the 4 preceding complete
8calendar quarter period is less than $10,000. However, if a
9taxpayer can show the Department that a substantial change in
10the taxpayer's business has occurred which causes the taxpayer
11to anticipate that his average monthly tax liability for the
12reasonably foreseeable future will fall below the $10,000
13threshold stated above, then such taxpayer may petition the
14Department for a change in such taxpayer's reporting status. On
15and after October 1, 2000, once applicable, the requirement of
16the making of quarter monthly payments to the Department by
17taxpayers having an average monthly tax liability of $20,000 or
18more as determined in the manner provided above shall continue
19until such taxpayer's average monthly liability to the
20Department during the preceding 4 complete calendar quarters
21(excluding the month of highest liability and the month of
22lowest liability) is less than $19,000 or until such taxpayer's
23average monthly liability to the Department as computed for
24each calendar quarter of the 4 preceding complete calendar
25quarter period is less than $20,000. However, if a taxpayer can
26show the Department that a substantial change in the taxpayer's

 

 

HB4300- 546 -LRB099 14379 HLH 38474 b

1business has occurred which causes the taxpayer to anticipate
2that his average monthly tax liability for the reasonably
3foreseeable future will fall below the $20,000 threshold stated
4above, then such taxpayer may petition the Department for a
5change in such taxpayer's reporting status. The Department
6shall change such taxpayer's reporting status unless it finds
7that such change is seasonal in nature and not likely to be
8long term. If any such quarter monthly payment is not paid at
9the time or in the amount required by this Section, then the
10taxpayer shall be liable for penalties and interest on the
11difference between the minimum amount due as a payment and the
12amount of such quarter monthly payment actually and timely
13paid, except insofar as the taxpayer has previously made
14payments for that month to the Department in excess of the
15minimum payments previously due as provided in this Section.
16The Department shall make reasonable rules and regulations to
17govern the quarter monthly payment amount and quarter monthly
18payment dates for taxpayers who file on other than a calendar
19monthly basis.
20    The provisions of this paragraph apply before October 1,
212001. Without regard to whether a taxpayer is required to make
22quarter monthly payments as specified above, any taxpayer who
23is required by Section 2d of this Act to collect and remit
24prepaid taxes and has collected prepaid taxes which average in
25excess of $25,000 per month during the preceding 2 complete
26calendar quarters, shall file a return with the Department as

 

 

HB4300- 547 -LRB099 14379 HLH 38474 b

1required by Section 2f and shall make payments to the
2Department on or before the 7th, 15th, 22nd and last day of the
3month during which such liability is incurred. If the month
4during which such tax liability is incurred began prior to the
5effective date of this amendatory Act of 1985, each payment
6shall be in an amount not less than 22.5% of the taxpayer's
7actual liability under Section 2d. If the month during which
8such tax liability is incurred begins on or after January 1,
91986, each payment shall be in an amount equal to 22.5% of the
10taxpayer's actual liability for the month or 27.5% of the
11taxpayer's liability for the same calendar month of the
12preceding calendar year. If the month during which such tax
13liability is incurred begins on or after January 1, 1987, each
14payment shall be in an amount equal to 22.5% of the taxpayer's
15actual liability for the month or 26.25% of the taxpayer's
16liability for the same calendar month of the preceding year.
17The amount of such quarter monthly payments shall be credited
18against the final tax liability of the taxpayer's return for
19that month filed under this Section or Section 2f, as the case
20may be. Once applicable, the requirement of the making of
21quarter monthly payments to the Department pursuant to this
22paragraph shall continue until such taxpayer's average monthly
23prepaid tax collections during the preceding 2 complete
24calendar quarters is $25,000 or less. If any such quarter
25monthly payment is not paid at the time or in the amount
26required, the taxpayer shall be liable for penalties and

 

 

HB4300- 548 -LRB099 14379 HLH 38474 b

1interest on such difference, except insofar as the taxpayer has
2previously made payments for that month in excess of the
3minimum payments previously due.
4    The provisions of this paragraph apply on and after October
51, 2001. Without regard to whether a taxpayer is required to
6make quarter monthly payments as specified above, any taxpayer
7who is required by Section 2d of this Act to collect and remit
8prepaid taxes and has collected prepaid taxes that average in
9excess of $20,000 per month during the preceding 4 complete
10calendar quarters shall file a return with the Department as
11required by Section 2f and shall make payments to the
12Department on or before the 7th, 15th, 22nd and last day of the
13month during which the liability is incurred. Each payment
14shall be in an amount equal to 22.5% of the taxpayer's actual
15liability for the month or 25% of the taxpayer's liability for
16the same calendar month of the preceding year. The amount of
17the quarter monthly payments shall be credited against the
18final tax liability of the taxpayer's return for that month
19filed under this Section or Section 2f, as the case may be.
20Once applicable, the requirement of the making of quarter
21monthly payments to the Department pursuant to this paragraph
22shall continue until the taxpayer's average monthly prepaid tax
23collections during the preceding 4 complete calendar quarters
24(excluding the month of highest liability and the month of
25lowest liability) is less than $19,000 or until such taxpayer's
26average monthly liability to the Department as computed for

 

 

HB4300- 549 -LRB099 14379 HLH 38474 b

1each calendar quarter of the 4 preceding complete calendar
2quarters is less than $20,000. If any such quarter monthly
3payment is not paid at the time or in the amount required, the
4taxpayer shall be liable for penalties and interest on such
5difference, except insofar as the taxpayer has previously made
6payments for that month in excess of the minimum payments
7previously due.
8    If any payment provided for in this Section exceeds the
9taxpayer's liabilities under this Act, the Use Tax Act, the
10Service Occupation Tax Act and the Service Use Tax Act, as
11shown on an original monthly return, the Department shall, if
12requested by the taxpayer, issue to the taxpayer a credit
13memorandum no later than 30 days after the date of payment. The
14credit evidenced by such credit memorandum may be assigned by
15the taxpayer to a similar taxpayer under this Act, the Use Tax
16Act, the Service Occupation Tax Act or the Service Use Tax Act,
17in accordance with reasonable rules and regulations to be
18prescribed by the Department. If no such request is made, the
19taxpayer may credit such excess payment against tax liability
20subsequently to be remitted to the Department under this Act,
21the Use Tax Act, the Service Occupation Tax Act or the Service
22Use Tax Act, in accordance with reasonable rules and
23regulations prescribed by the Department. If the Department
24subsequently determined that all or any part of the credit
25taken was not actually due to the taxpayer, the taxpayer's 2.1%
26and 1.75% vendor's discount shall be reduced by 2.1%, or 1.75%,

 

 

HB4300- 550 -LRB099 14379 HLH 38474 b

1or 0.75% (as applicable) of the difference between the credit
2taken and that actually due, and that taxpayer shall be liable
3for penalties and interest on such difference.
4    If a retailer of motor fuel is entitled to a credit under
5Section 2d of this Act which exceeds the taxpayer's liability
6to the Department under this Act for the month which the
7taxpayer is filing a return, the Department shall issue the
8taxpayer a credit memorandum for the excess.
9    Beginning January 1, 1990, each month the Department shall
10pay into the Local Government Tax Fund, a special fund in the
11State treasury which is hereby created, the net revenue
12realized for the preceding month from the 1% tax on sales of
13food for human consumption which is to be consumed off the
14premises where it is sold (other than alcoholic beverages, soft
15drinks and food which has been prepared for immediate
16consumption) and prescription and nonprescription medicines,
17drugs, medical appliances and insulin, urine testing
18materials, syringes and needles used by diabetics.
19    Beginning January 1, 1990, each month the Department shall
20pay into the County and Mass Transit District Fund, a special
21fund in the State treasury which is hereby created, 4% of the
22net revenue realized for the preceding month from the 6.25%
23general rate.
24    Beginning August 1, 2000, each month the Department shall
25pay into the County and Mass Transit District Fund 20% of the
26net revenue realized for the preceding month from the 1.25%

 

 

HB4300- 551 -LRB099 14379 HLH 38474 b

1rate on the selling price of motor fuel and gasohol. Beginning
2September 1, 2010, each month the Department shall pay into the
3County and Mass Transit District Fund 20% of the net revenue
4realized for the preceding month from the 1.25% rate on the
5selling price of sales tax holiday items.
6    Beginning January 1, 1990, each month the Department shall
7pay into the Local Government Tax Fund 16% of the net revenue
8realized for the preceding month from the 6.25% general rate on
9the selling price of tangible personal property.
10    Beginning August 1, 2000, each month the Department shall
11pay into the Local Government Tax Fund 80% of the net revenue
12realized for the preceding month from the 1.25% rate on the
13selling price of motor fuel and gasohol. Beginning September 1,
142010, each month the Department shall pay into the Local
15Government Tax Fund 80% of the net revenue realized for the
16preceding month from the 1.25% rate on the selling price of
17sales tax holiday items.
18    Beginning October 1, 2009, each month the Department shall
19pay into the Capital Projects Fund an amount that is equal to
20an amount estimated by the Department to represent 80% of the
21net revenue realized for the preceding month from the sale of
22candy, grooming and hygiene products, and soft drinks that had
23been taxed at a rate of 1% prior to September 1, 2009 but that
24are now taxed at 6.25%.
25    Beginning July 1, 2011, each month the Department shall pay
26into the Clean Air Act (CAA) Permit Fund 80% of the net revenue

 

 

HB4300- 552 -LRB099 14379 HLH 38474 b

1realized for the preceding month from the 6.25% general rate on
2the selling price of sorbents used in Illinois in the process
3of sorbent injection as used to comply with the Environmental
4Protection Act or the federal Clean Air Act, but the total
5payment into the Clean Air Act (CAA) Permit Fund under this Act
6and the Use Tax Act shall not exceed $2,000,000 in any fiscal
7year.
8    Beginning July 1, 2013, each month the Department shall pay
9into the Underground Storage Tank Fund from the proceeds
10collected under this Act, the Use Tax Act, the Service Use Tax
11Act, and the Service Occupation Tax Act an amount equal to the
12average monthly deficit in the Underground Storage Tank Fund
13during the prior year, as certified annually by the Illinois
14Environmental Protection Agency, but the total payment into the
15Underground Storage Tank Fund under this Act, the Use Tax Act,
16the Service Use Tax Act, and the Service Occupation Tax Act
17shall not exceed $18,000,000 in any State fiscal year. As used
18in this paragraph, the "average monthly deficit" shall be equal
19to the difference between the average monthly claims for
20payment by the fund and the average monthly revenues deposited
21into the fund, excluding payments made pursuant to this
22paragraph.
23    Beginning July 1, 2015, of the remainder of the moneys
24received by the Department under the Use Tax Act, the Service
25Use Tax Act, the Service Occupation Tax Act, and this Act, each
26month the Department shall deposit $500,000 into the State

 

 

HB4300- 553 -LRB099 14379 HLH 38474 b

1Crime Laboratory Fund.
2    Of the remainder of the moneys received by the Department
3pursuant to this Act, (a) 1.75% thereof shall be paid into the
4Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
5and after July 1, 1989, 3.8% thereof shall be paid into the
6Build Illinois Fund; provided, however, that if in any fiscal
7year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
8may be, of the moneys received by the Department and required
9to be paid into the Build Illinois Fund pursuant to this Act,
10Section 9 of the Use Tax Act, Section 9 of the Service Use Tax
11Act, and Section 9 of the Service Occupation Tax Act, such Acts
12being hereinafter called the "Tax Acts" and such aggregate of
132.2% or 3.8%, as the case may be, of moneys being hereinafter
14called the "Tax Act Amount", and (2) the amount transferred to
15the Build Illinois Fund from the State and Local Sales Tax
16Reform Fund shall be less than the Annual Specified Amount (as
17hereinafter defined), an amount equal to the difference shall
18be immediately paid into the Build Illinois Fund from other
19moneys received by the Department pursuant to the Tax Acts; the
20"Annual Specified Amount" means the amounts specified below for
21fiscal years 1986 through 1993:
22Fiscal YearAnnual Specified Amount
231986$54,800,000
241987$76,650,000
251988$80,480,000
261989$88,510,000

 

 

HB4300- 554 -LRB099 14379 HLH 38474 b

11990$115,330,000
21991$145,470,000
31992$182,730,000
41993$206,520,000;
5and means the Certified Annual Debt Service Requirement (as
6defined in Section 13 of the Build Illinois Bond Act) or the
7Tax Act Amount, whichever is greater, for fiscal year 1994 and
8each fiscal year thereafter; and further provided, that if on
9the last business day of any month the sum of (1) the Tax Act
10Amount required to be deposited into the Build Illinois Bond
11Account in the Build Illinois Fund during such month and (2)
12the amount transferred to the Build Illinois Fund from the
13State and Local Sales Tax Reform Fund shall have been less than
141/12 of the Annual Specified Amount, an amount equal to the
15difference shall be immediately paid into the Build Illinois
16Fund from other moneys received by the Department pursuant to
17the Tax Acts; and, further provided, that in no event shall the
18payments required under the preceding proviso result in
19aggregate payments into the Build Illinois Fund pursuant to
20this clause (b) for any fiscal year in excess of the greater of
21(i) the Tax Act Amount or (ii) the Annual Specified Amount for
22such fiscal year. The amounts payable into the Build Illinois
23Fund under clause (b) of the first sentence in this paragraph
24shall be payable only until such time as the aggregate amount
25on deposit under each trust indenture securing Bonds issued and
26outstanding pursuant to the Build Illinois Bond Act is

 

 

HB4300- 555 -LRB099 14379 HLH 38474 b

1sufficient, taking into account any future investment income,
2to fully provide, in accordance with such indenture, for the
3defeasance of or the payment of the principal of, premium, if
4any, and interest on the Bonds secured by such indenture and on
5any Bonds expected to be issued thereafter and all fees and
6costs payable with respect thereto, all as certified by the
7Director of the Bureau of the Budget (now Governor's Office of
8Management and Budget). If on the last business day of any
9month in which Bonds are outstanding pursuant to the Build
10Illinois Bond Act, the aggregate of moneys deposited in the
11Build Illinois Bond Account in the Build Illinois Fund in such
12month shall be less than the amount required to be transferred
13in such month from the Build Illinois Bond Account to the Build
14Illinois Bond Retirement and Interest Fund pursuant to Section
1513 of the Build Illinois Bond Act, an amount equal to such
16deficiency shall be immediately paid from other moneys received
17by the Department pursuant to the Tax Acts to the Build
18Illinois Fund; provided, however, that any amounts paid to the
19Build Illinois Fund in any fiscal year pursuant to this
20sentence shall be deemed to constitute payments pursuant to
21clause (b) of the first sentence of this paragraph and shall
22reduce the amount otherwise payable for such fiscal year
23pursuant to that clause (b). The moneys received by the
24Department pursuant to this Act and required to be deposited
25into the Build Illinois Fund are subject to the pledge, claim
26and charge set forth in Section 12 of the Build Illinois Bond

 

 

HB4300- 556 -LRB099 14379 HLH 38474 b

1Act.
2    Subject to payment of amounts into the Build Illinois Fund
3as provided in the preceding paragraph or in any amendment
4thereto hereafter enacted, the following specified monthly
5installment of the amount requested in the certificate of the
6Chairman of the Metropolitan Pier and Exposition Authority
7provided under Section 8.25f of the State Finance Act, but not
8in excess of sums designated as "Total Deposit", shall be
9deposited in the aggregate from collections under Section 9 of
10the Use Tax Act, Section 9 of the Service Use Tax Act, Section
119 of the Service Occupation Tax Act, and Section 3 of the
12Retailers' Occupation Tax Act into the McCormick Place
13Expansion Project Fund in the specified fiscal years.
14Fiscal YearTotal Deposit
151993         $0
161994 53,000,000
171995 58,000,000
181996 61,000,000
191997 64,000,000
201998 68,000,000
211999 71,000,000
222000 75,000,000
232001 80,000,000
242002 93,000,000
252003 99,000,000

 

 

HB4300- 557 -LRB099 14379 HLH 38474 b

12004103,000,000
22005108,000,000
32006113,000,000
42007119,000,000
52008126,000,000
62009132,000,000
72010139,000,000
82011146,000,000
92012153,000,000
102013161,000,000
112014170,000,000
122015179,000,000
132016189,000,000
142017199,000,000
152018210,000,000
162019221,000,000
172020233,000,000
182021246,000,000
192022260,000,000
202023275,000,000
212024 275,000,000
222025 275,000,000
232026 279,000,000
242027 292,000,000
252028 307,000,000
262029 322,000,000

 

 

HB4300- 558 -LRB099 14379 HLH 38474 b

12030 338,000,000
22031 350,000,000
32032 350,000,000
4and
5each fiscal year
6thereafter that bonds
7are outstanding under
8Section 13.2 of the
9Metropolitan Pier and
10Exposition Authority Act,
11but not after fiscal year 2060.
12    Beginning July 20, 1993 and in each month of each fiscal
13year thereafter, one-eighth of the amount requested in the
14certificate of the Chairman of the Metropolitan Pier and
15Exposition Authority for that fiscal year, less the amount
16deposited into the McCormick Place Expansion Project Fund by
17the State Treasurer in the respective month under subsection
18(g) of Section 13 of the Metropolitan Pier and Exposition
19Authority Act, plus cumulative deficiencies in the deposits
20required under this Section for previous months and years,
21shall be deposited into the McCormick Place Expansion Project
22Fund, until the full amount requested for the fiscal year, but
23not in excess of the amount specified above as "Total Deposit",
24has been deposited.
25    Subject to payment of amounts into the Build Illinois Fund
26and the McCormick Place Expansion Project Fund pursuant to the

 

 

HB4300- 559 -LRB099 14379 HLH 38474 b

1preceding paragraphs or in any amendments thereto hereafter
2enacted, beginning July 1, 1993 and ending on September 30,
32013, the Department shall each month pay into the Illinois Tax
4Increment Fund 0.27% of 80% of the net revenue realized for the
5preceding month from the 6.25% general rate on the selling
6price of tangible personal property.
7    Subject to payment of amounts into the Build Illinois Fund
8and the McCormick Place Expansion Project Fund pursuant to the
9preceding paragraphs or in any amendments thereto hereafter
10enacted, beginning with the receipt of the first report of
11taxes paid by an eligible business and continuing for a 25-year
12period, the Department shall each month pay into the Energy
13Infrastructure Fund 80% of the net revenue realized from the
146.25% general rate on the selling price of Illinois-mined coal
15that was sold to an eligible business. For purposes of this
16paragraph, the term "eligible business" means a new electric
17generating facility certified pursuant to Section 605-332 of
18the Department of Commerce and Economic Opportunity Law of the
19Civil Administrative Code of Illinois.
20    Subject to payment of amounts into the Build Illinois Fund,
21the McCormick Place Expansion Project Fund, the Illinois Tax
22Increment Fund, and the Energy Infrastructure Fund pursuant to
23the preceding paragraphs or in any amendments to this Section
24hereafter enacted, beginning on the first day of the first
25calendar month to occur on or after the effective date of this
26amendatory Act of the 98th General Assembly, each month, from

 

 

HB4300- 560 -LRB099 14379 HLH 38474 b

1the collections made under Section 9 of the Use Tax Act,
2Section 9 of the Service Use Tax Act, Section 9 of the Service
3Occupation Tax Act, and Section 3 of the Retailers' Occupation
4Tax Act, the Department shall pay into the Tax Compliance and
5Administration Fund, to be used, subject to appropriation, to
6fund additional auditors and compliance personnel at the
7Department of Revenue, an amount equal to 1/12 of 5% of 80% of
8the cash receipts collected during the preceding fiscal year by
9the Audit Bureau of the Department under the Use Tax Act, the
10Service Use Tax Act, the Service Occupation Tax Act, the
11Retailers' Occupation Tax Act, and associated local occupation
12and use taxes administered by the Department.
13    Of the remainder of the moneys received by the Department
14pursuant to this Act, 75% thereof shall be paid into the State
15Treasury and 25% shall be reserved in a special account and
16used only for the transfer to the Common School Fund as part of
17the monthly transfer from the General Revenue Fund in
18accordance with Section 8a of the State Finance Act.
19    The Department may, upon separate written notice to a
20taxpayer, require the taxpayer to prepare and file with the
21Department on a form prescribed by the Department within not
22less than 60 days after receipt of the notice an annual
23information return for the tax year specified in the notice.
24Such annual return to the Department shall include a statement
25of gross receipts as shown by the retailer's last Federal
26income tax return. If the total receipts of the business as

 

 

HB4300- 561 -LRB099 14379 HLH 38474 b

1reported in the Federal income tax return do not agree with the
2gross receipts reported to the Department of Revenue for the
3same period, the retailer shall attach to his annual return a
4schedule showing a reconciliation of the 2 amounts and the
5reasons for the difference. The retailer's annual return to the
6Department shall also disclose the cost of goods sold by the
7retailer during the year covered by such return, opening and
8closing inventories of such goods for such year, costs of goods
9used from stock or taken from stock and given away by the
10retailer during such year, payroll information of the
11retailer's business during such year and any additional
12reasonable information which the Department deems would be
13helpful in determining the accuracy of the monthly, quarterly
14or annual returns filed by such retailer as provided for in
15this Section.
16    If the annual information return required by this Section
17is not filed when and as required, the taxpayer shall be liable
18as follows:
19        (i) Until January 1, 1994, the taxpayer shall be liable
20    for a penalty equal to 1/6 of 1% of the tax due from such
21    taxpayer under this Act during the period to be covered by
22    the annual return for each month or fraction of a month
23    until such return is filed as required, the penalty to be
24    assessed and collected in the same manner as any other
25    penalty provided for in this Act.
26        (ii) On and after January 1, 1994, the taxpayer shall

 

 

HB4300- 562 -LRB099 14379 HLH 38474 b

1    be liable for a penalty as described in Section 3-4 of the
2    Uniform Penalty and Interest Act.
3    The chief executive officer, proprietor, owner or highest
4ranking manager shall sign the annual return to certify the
5accuracy of the information contained therein. Any person who
6willfully signs the annual return containing false or
7inaccurate information shall be guilty of perjury and punished
8accordingly. The annual return form prescribed by the
9Department shall include a warning that the person signing the
10return may be liable for perjury.
11    The provisions of this Section concerning the filing of an
12annual information return do not apply to a retailer who is not
13required to file an income tax return with the United States
14Government.
15    As soon as possible after the first day of each month, upon
16certification of the Department of Revenue, the Comptroller
17shall order transferred and the Treasurer shall transfer from
18the General Revenue Fund to the Motor Fuel Tax Fund an amount
19equal to 1.7% of 80% of the net revenue realized under this Act
20for the second preceding month. Beginning April 1, 2000, this
21transfer is no longer required and shall not be made.
22    Net revenue realized for a month shall be the revenue
23collected by the State pursuant to this Act, less the amount
24paid out during that month as refunds to taxpayers for
25overpayment of liability.
26    For greater simplicity of administration, manufacturers,

 

 

HB4300- 563 -LRB099 14379 HLH 38474 b

1importers and wholesalers whose products are sold at retail in
2Illinois by numerous retailers, and who wish to do so, may
3assume the responsibility for accounting and paying to the
4Department all tax accruing under this Act with respect to such
5sales, if the retailers who are affected do not make written
6objection to the Department to this arrangement.
7    Any person who promotes, organizes, provides retail
8selling space for concessionaires or other types of sellers at
9the Illinois State Fair, DuQuoin State Fair, county fairs,
10local fairs, art shows, flea markets and similar exhibitions or
11events, including any transient merchant as defined by Section
122 of the Transient Merchant Act of 1987, is required to file a
13report with the Department providing the name of the merchant's
14business, the name of the person or persons engaged in
15merchant's business, the permanent address and Illinois
16Retailers Occupation Tax Registration Number of the merchant,
17the dates and location of the event and other reasonable
18information that the Department may require. The report must be
19filed not later than the 20th day of the month next following
20the month during which the event with retail sales was held.
21Any person who fails to file a report required by this Section
22commits a business offense and is subject to a fine not to
23exceed $250.
24    Any person engaged in the business of selling tangible
25personal property at retail as a concessionaire or other type
26of seller at the Illinois State Fair, county fairs, art shows,

 

 

HB4300- 564 -LRB099 14379 HLH 38474 b

1flea markets and similar exhibitions or events, or any
2transient merchants, as defined by Section 2 of the Transient
3Merchant Act of 1987, may be required to make a daily report of
4the amount of such sales to the Department and to make a daily
5payment of the full amount of tax due. The Department shall
6impose this requirement when it finds that there is a
7significant risk of loss of revenue to the State at such an
8exhibition or event. Such a finding shall be based on evidence
9that a substantial number of concessionaires or other sellers
10who are not residents of Illinois will be engaging in the
11business of selling tangible personal property at retail at the
12exhibition or event, or other evidence of a significant risk of
13loss of revenue to the State. The Department shall notify
14concessionaires and other sellers affected by the imposition of
15this requirement. In the absence of notification by the
16Department, the concessionaires and other sellers shall file
17their returns as otherwise required in this Section.
18(Source: P.A. 98-24, eff. 6-19-13; 98-109, eff. 7-25-13;
1998-496, eff. 1-1-14; 98-756, eff. 7-16-14; 98-1098, eff.
208-26-14; 99-352, eff. 8-12-15.)
 
21    Section 50-25. The Cigarette Tax Act is amended by changing
22Section 2 as follows:
 
23    (35 ILCS 130/2)  (from Ch. 120, par. 453.2)
24    Sec. 2. Tax imposed; rate; collection, payment, and

 

 

HB4300- 565 -LRB099 14379 HLH 38474 b

1distribution; discount.
2    (a) A tax is imposed upon any person engaged in business as
3a retailer of cigarettes in this State at the rate of 5 1/2
4mills per cigarette sold, or otherwise disposed of in the
5course of such business in this State. In addition to any other
6tax imposed by this Act, a tax is imposed upon any person
7engaged in business as a retailer of cigarettes in this State
8at a rate of 1/2 mill per cigarette sold or otherwise disposed
9of in the course of such business in this State on and after
10January 1, 1947, and shall be paid into the Metropolitan Fair
11and Exposition Authority Reconstruction Fund or as otherwise
12provided in Section 29. On and after December 1, 1985, in
13addition to any other tax imposed by this Act, a tax is imposed
14upon any person engaged in business as a retailer of cigarettes
15in this State at a rate of 4 mills per cigarette sold or
16otherwise disposed of in the course of such business in this
17State. Of the additional tax imposed by this amendatory Act of
181985, $9,000,000 of the moneys received by the Department of
19Revenue pursuant to this Act shall be paid each month into the
20Common School Fund. On and after the effective date of this
21amendatory Act of 1989, in addition to any other tax imposed by
22this Act, a tax is imposed upon any person engaged in business
23as a retailer of cigarettes at the rate of 5 mills per
24cigarette sold or otherwise disposed of in the course of such
25business in this State. On and after the effective date of this
26amendatory Act of 1993, in addition to any other tax imposed by

 

 

HB4300- 566 -LRB099 14379 HLH 38474 b

1this Act, a tax is imposed upon any person engaged in business
2as a retailer of cigarettes at the rate of 7 mills per
3cigarette sold or otherwise disposed of in the course of such
4business in this State. On and after December 15, 1997, in
5addition to any other tax imposed by this Act, a tax is imposed
6upon any person engaged in business as a retailer of cigarettes
7at the rate of 7 mills per cigarette sold or otherwise disposed
8of in the course of such business of this State. All of the
9moneys received by the Department of Revenue pursuant to this
10Act and the Cigarette Use Tax Act from the additional taxes
11imposed by this amendatory Act of 1997, shall be paid each
12month into the Common School Fund. On and after July 1, 2002,
13in addition to any other tax imposed by this Act, a tax is
14imposed upon any person engaged in business as a retailer of
15cigarettes at the rate of 20.0 mills per cigarette sold or
16otherwise disposed of in the course of such business in this
17State. Beginning on June 24, 2012, in addition to any other tax
18imposed by this Act, a tax is imposed upon any person engaged
19in business as a retailer of cigarettes at the rate of 50 mills
20per cigarette sold or otherwise disposed of in the course of
21such business in this State. All moneys received by the
22Department of Revenue under this Act and the Cigarette Use Tax
23Act from the additional taxes imposed by this amendatory Act of
24the 97th General Assembly shall be paid each month into the
25Healthcare Provider Relief Fund. The payment of such taxes
26shall be evidenced by a stamp affixed to each original package

 

 

HB4300- 567 -LRB099 14379 HLH 38474 b

1of cigarettes, or an authorized substitute for such stamp
2imprinted on each original package of such cigarettes
3underneath the sealed transparent outside wrapper of such
4original package, as hereinafter provided. However, such taxes
5are not imposed upon any activity in such business in
6interstate commerce or otherwise, which activity may not under
7the Constitution and statutes of the United States be made the
8subject of taxation by this State.
9    Beginning on the effective date of this amendatory Act of
10the 92nd General Assembly and through June 30, 2006, all of the
11moneys received by the Department of Revenue pursuant to this
12Act and the Cigarette Use Tax Act, other than the moneys that
13are dedicated to the Common School Fund, shall be distributed
14each month as follows: first, there shall be paid into the
15General Revenue Fund an amount which, when added to the amount
16paid into the Common School Fund for that month, equals
17$33,300,000, except that in the month of August of 2004, this
18amount shall equal $83,300,000; then, from the moneys
19remaining, if any amounts required to be paid into the General
20Revenue Fund in previous months remain unpaid, those amounts
21shall be paid into the General Revenue Fund; then, beginning on
22April 1, 2003, from the moneys remaining, $5,000,000 per month
23shall be paid into the School Infrastructure Fund; then, if any
24amounts required to be paid into the School Infrastructure Fund
25in previous months remain unpaid, those amounts shall be paid
26into the School Infrastructure Fund; then the moneys remaining,

 

 

HB4300- 568 -LRB099 14379 HLH 38474 b

1if any, shall be paid into the Long-Term Care Provider Fund. To
2the extent that more than $25,000,000 has been paid into the
3General Revenue Fund and Common School Fund per month for the
4period of July 1, 1993 through the effective date of this
5amendatory Act of 1994 from combined receipts of the Cigarette
6Tax Act and the Cigarette Use Tax Act, notwithstanding the
7distribution provided in this Section, the Department of
8Revenue is hereby directed to adjust the distribution provided
9in this Section to increase the next monthly payments to the
10Long Term Care Provider Fund by the amount paid to the General
11Revenue Fund and Common School Fund in excess of $25,000,000
12per month and to decrease the next monthly payments to the
13General Revenue Fund and Common School Fund by that same excess
14amount.
15    Beginning on July 1, 2006, all of the moneys received by
16the Department of Revenue pursuant to this Act and the
17Cigarette Use Tax Act, other than the moneys that are dedicated
18to the Common School Fund and, beginning on the effective date
19of this amendatory Act of the 97th General Assembly, other than
20the moneys from the additional taxes imposed by this amendatory
21Act of the 97th General Assembly that must be paid each month
22into the Healthcare Provider Relief Fund, shall be distributed
23each month as follows: first, there shall be paid into the
24General Revenue Fund an amount that, when added to the amount
25paid into the Common School Fund for that month, equals
26$29,200,000; then, from the moneys remaining, if any amounts

 

 

HB4300- 569 -LRB099 14379 HLH 38474 b

1required to be paid into the General Revenue Fund in previous
2months remain unpaid, those amounts shall be paid into the
3General Revenue Fund; then from the moneys remaining,
4$5,000,000 per month shall be paid into the School
5Infrastructure Fund; then, if any amounts required to be paid
6into the School Infrastructure Fund in previous months remain
7unpaid, those amounts shall be paid into the School
8Infrastructure Fund; then the moneys remaining, if any, shall
9be paid into the Long-Term Care Provider Fund.
10    Moneys collected from the tax imposed on little cigars
11under Section 10-10 of the Tobacco Products Tax Act of 1995
12shall be included with the moneys collected under the Cigarette
13Tax Act and the Cigarette Use Tax Act when making distributions
14to the Common School Fund, the Healthcare Provider Relief Fund,
15the General Revenue Fund, the School Infrastructure Fund, and
16the Long-Term Care Provider Fund under this Section.
17    When any tax imposed herein terminates or has terminated,
18distributors who have bought stamps while such tax was in
19effect and who therefore paid such tax, but who can show, to
20the Department's satisfaction, that they sold the cigarettes to
21which they affixed such stamps after such tax had terminated
22and did not recover the tax or its equivalent from purchasers,
23shall be allowed by the Department to take credit for such
24absorbed tax against subsequent tax stamp purchases from the
25Department by such distributor.
26    The impact of the tax levied by this Act is imposed upon

 

 

HB4300- 570 -LRB099 14379 HLH 38474 b

1the retailer and shall be prepaid or pre-collected by the
2distributor for the purpose of convenience and facility only,
3and the amount of the tax shall be added to the price of the
4cigarettes sold by such distributor. Collection of the tax
5shall be evidenced by a stamp or stamps affixed to each
6original package of cigarettes, as hereinafter provided.
7    Each distributor shall collect the tax from the retailer at
8or before the time of the sale, shall affix the stamps as
9hereinafter required, and shall remit the tax collected from
10retailers to the Department, as hereinafter provided. Any
11distributor who fails to properly collect and pay the tax
12imposed by this Act shall be liable for the tax. Any
13distributor having cigarettes to which stamps have been affixed
14in his possession for sale on the effective date of this
15amendatory Act of 1989 shall not be required to pay the
16additional tax imposed by this amendatory Act of 1989 on such
17stamped cigarettes. Any distributor having cigarettes to which
18stamps have been affixed in his or her possession for sale at
1912:01 a.m. on the effective date of this amendatory Act of
201993, is required to pay the additional tax imposed by this
21amendatory Act of 1993 on such stamped cigarettes. This
22payment, less the discount provided in subsection (b), shall be
23due when the distributor first makes a purchase of cigarette
24tax stamps after the effective date of this amendatory Act of
251993, or on the first due date of a return under this Act after
26the effective date of this amendatory Act of 1993, whichever

 

 

HB4300- 571 -LRB099 14379 HLH 38474 b

1occurs first. Any distributor having cigarettes to which stamps
2have been affixed in his possession for sale on December 15,
31997 shall not be required to pay the additional tax imposed by
4this amendatory Act of 1997 on such stamped cigarettes.
5    Any distributor having cigarettes to which stamps have been
6affixed in his or her possession for sale on July 1, 2002 shall
7not be required to pay the additional tax imposed by this
8amendatory Act of the 92nd General Assembly on those stamped
9cigarettes.
10    Any retailer having cigarettes in his or her possession on
11June 24, 2012 to which tax stamps have been affixed is not
12required to pay the additional tax that begins on June 24, 2012
13imposed by this amendatory Act of the 97th General Assembly on
14those stamped cigarettes. Any distributor having cigarettes in
15his or her possession on June 24, 2012 to which tax stamps have
16been affixed, and any distributor having stamps in his or her
17possession on June 24, 2012 that have not been affixed to
18packages of cigarettes before June 24, 2012, is required to pay
19the additional tax that begins on June 24, 2012 imposed by this
20amendatory Act of the 97th General Assembly to the extent the
21calendar year 2012 average monthly volume of cigarette stamps
22in the distributor's possession exceeds the average monthly
23volume of cigarette stamps purchased by the distributor in
24calendar year 2011. This payment, less the discount provided in
25subsection (b), is due when the distributor first makes a
26purchase of cigarette stamps on or after June 24, 2012 or on

 

 

HB4300- 572 -LRB099 14379 HLH 38474 b

1the first due date of a return under this Act occurring on or
2after June 24, 2012, whichever occurs first. Those distributors
3may elect to pay the additional tax on packages of cigarettes
4to which stamps have been affixed and on any stamps in the
5distributor's possession that have not been affixed to packages
6of cigarettes over a period not to exceed 12 months from the
7due date of the additional tax by notifying the Department in
8writing. The first payment for distributors making such
9election is due when the distributor first makes a purchase of
10cigarette tax stamps on or after June 24, 2012 or on the first
11due date of a return under this Act occurring on or after June
1224, 2012, whichever occurs first. Distributors making such an
13election are not entitled to take the discount provided in
14subsection (b) on such payments.
15    Distributors making sales of cigarettes to secondary
16distributors shall add the amount of the tax to the price of
17the cigarettes sold by the distributors. Secondary
18distributors making sales of cigarettes to retailers shall
19include the amount of the tax in the price of the cigarettes
20sold to retailers. The amount of tax shall not be less than the
21amount of taxes imposed by the State and all local
22jurisdictions. The amount of local taxes shall be calculated
23based on the location of the retailer's place of business shown
24on the retailer's certificate of registration or
25sub-registration issued to the retailer pursuant to Section 2a
26of the Retailers' Occupation Tax Act. The original packages of

 

 

HB4300- 573 -LRB099 14379 HLH 38474 b

1cigarettes sold to the retailer shall bear all the required
2stamps, or other indicia, for the taxes included in the price
3of cigarettes.
4    The amount of the Cigarette Tax imposed by this Act shall
5be separately stated, apart from the price of the goods, by
6distributors, manufacturer representatives, secondary
7distributors, and retailers, in all bills and sales invoices.
8    (b) The distributor shall be required to collect the taxes
9provided under paragraph (a) hereof, and, to cover the costs of
10such collection, shall be allowed a discount during any year
11commencing July 1st and ending the following June 30th in
12accordance with the schedule set out hereinbelow, which
13discount shall be allowed at the time of purchase of the stamps
14when purchase is required by this Act, or at the time when the
15tax is remitted to the Department without the purchase of
16stamps from the Department when that method of paying the tax
17is required or authorized by this Act. Prior to December 1,
181985, a discount equal to 1 2/3% of the amount of the tax up to
19and including the first $700,000 paid hereunder by such
20distributor to the Department during any such year; 1 1/3% of
21the next $700,000 of tax or any part thereof, paid hereunder by
22such distributor to the Department during any such year; 1% of
23the next $700,000 of tax, or any part thereof, paid hereunder
24by such distributor to the Department during any such year, and
252/3 of 1% of the amount of any additional tax paid hereunder by
26such distributor to the Department during any such year shall

 

 

HB4300- 574 -LRB099 14379 HLH 38474 b

1apply. On and after December 1, 1985 and through June 30, 2016,
2a discount equal to 1.75% of the amount of the tax payable
3under this Act up to and including the first $3,000,000 paid
4hereunder by such distributor to the Department during any such
5year and 1.5% of the amount of any additional tax paid
6hereunder by such distributor to the Department during any such
7year shall apply.
8    Two or more distributors that use a common means of
9affixing revenue tax stamps or that are owned or controlled by
10the same interests shall be treated as a single distributor for
11the purpose of computing the discount.
12    (c) The taxes herein imposed are in addition to all other
13occupation or privilege taxes imposed by the State of Illinois,
14or by any political subdivision thereof, or by any municipal
15corporation.
16(Source: P.A. 97-587, eff. 8-26-11; 97-688, eff. 6-14-12;
1798-273, eff. 8-9-13.)
 
18    Section 50-30. The Cigarette Use Tax Act is amended by
19changing Section 3 as follows:
 
20    (35 ILCS 135/3)  (from Ch. 120, par. 453.33)
21    Sec. 3. Stamp payment. The tax hereby imposed shall be
22collected by a distributor maintaining a place of business in
23this State or a distributor authorized by the Department
24pursuant to Section 7 hereof to collect the tax, and the amount

 

 

HB4300- 575 -LRB099 14379 HLH 38474 b

1of the tax shall be added to the price of the cigarettes sold
2by such distributor. Collection of the tax shall be evidenced
3by a stamp or stamps affixed to each original package of
4cigarettes or by an authorized substitute for such stamp
5imprinted on each original package of such cigarettes
6underneath the sealed transparent outside wrapper of such
7original package, except as hereinafter provided. Each
8distributor who is required or authorized to collect the tax
9herein imposed, before delivering or causing to be delivered
10any original packages of cigarettes in this State to any
11purchaser, shall firmly affix a proper stamp or stamps to each
12such package, or (in the case of manufacturers of cigarettes in
13original packages which are contained inside a sealed
14transparent wrapper) shall imprint the required language on the
15original package of cigarettes beneath such outside wrapper as
16hereinafter provided. Such stamp or stamps need not be affixed
17to the original package of any cigarettes with respect to which
18the distributor is required to affix a like stamp or stamps by
19virtue of the Cigarette Tax Act, however, and no tax imprint
20need be placed underneath the sealed transparent wrapper of an
21original package of cigarettes with respect to which the
22distributor is required or authorized to employ a like tax
23imprint by virtue of the Cigarette Tax Act.
24    No stamp or imprint may be affixed to, or made upon, any
25package of cigarettes unless that package complies with all
26requirements of the federal Cigarette Labeling and Advertising

 

 

HB4300- 576 -LRB099 14379 HLH 38474 b

1Act, 15 U.S.C. 1331 and following, for the placement of labels,
2warnings, or any other information upon a package of cigarettes
3that is sold within the United States. Under the authority of
4Section 6, the Department shall revoke the license of any
5distributor that is determined to have violated this paragraph.
6A person may not affix a stamp on a package of cigarettes,
7cigarette papers, wrappers, or tubes if that individual package
8has been marked for export outside the United States with a
9label or notice in compliance with Section 290.185 of Title 27
10of the Code of Federal Regulations. It is not a defense to a
11proceeding for violation of this paragraph that the label or
12notice has been removed, mutilated, obliterated, or altered in
13any manner.
14    Only distributors licensed under this Act and
15transporters, as defined in Section 9c of the Cigarette Tax
16Act, may possess unstamped original packages of cigarettes.
17Prior to shipment to an Illinois retailer or secondary
18distributor, a stamp shall be applied to each original package
19of cigarettes sold to the retailer or secondary distributor. A
20distributor may apply a tax stamp only to an original package
21of cigarettes purchased or obtained directly from an in-state
22maker, manufacturer, or fabricator licensed as a distributor
23under Section 4 of this Act or an out-of-state maker,
24manufacturer, or fabricator holding a permit under Section 7 of
25this Act. A licensed distributor may ship or otherwise cause to
26be delivered unstamped original packages of cigarettes in,

 

 

HB4300- 577 -LRB099 14379 HLH 38474 b

1into, or from this State. A licensed distributor may transport
2unstamped original packages of cigarettes to a facility,
3wherever located, owned or controlled by such distributor;
4however, a distributor may not transport unstamped original
5packages of cigarettes to a facility where retail sales of
6cigarettes take place or to a facility where a secondary
7distributor makes sales for resale. Any licensed distributor
8that ships or otherwise causes to be delivered unstamped
9original packages of cigarettes into, within, or from this
10State shall ensure that the invoice or equivalent documentation
11and the bill of lading or freight bill for the shipment
12identifies the true name and address of the consignor or
13seller, the true name and address of the consignee or
14purchaser, and the quantity by brand style of the cigarettes so
15transported, provided that this Section shall not be construed
16as to impose any requirement or liability upon any common or
17contract carrier.
18    Distributors making sales of cigarettes to secondary
19distributors shall add the amount of the tax to the price of
20the cigarettes sold by the distributors. Secondary
21distributors making sales of cigarettes to retailers shall
22include the amount of the tax in the price of the cigarettes
23sold to retailers. The amount of tax shall not be less than the
24amount of taxes imposed by the State and all local
25jurisdictions. The amount of local taxes shall be calculated
26based on the location of the retailer's place of business shown

 

 

HB4300- 578 -LRB099 14379 HLH 38474 b

1on the retailer's certificate of registration or
2sub-registration issued to the retailer pursuant to Section 2a
3of the Retailers' Occupation Tax Act. The original packages of
4cigarettes sold by the retailer shall bear all the required
5stamps, or other indicia, for the taxes included in the price
6of cigarettes.
7    Stamps, when required hereunder, shall be purchased from
8the Department, or any person authorized by the Department, by
9distributors. On and after July 1, 2003, payment for such
10stamps must be made by means of electronic funds transfer. The
11Department may refuse to sell stamps to any person who does not
12comply with the provisions of this Act. Beginning on June 6,
132002 and through June 30, 2002, persons holding valid licenses
14as distributors may purchase cigarette tax stamps up to an
15amount equal to 115% of the distributor's average monthly
16cigarette tax stamp purchases over the 12 calendar months prior
17to June 6, 2002.
18    Prior to December 1, 1985, the Department shall allow a
19distributor 21 days in which to make final payment of the
20amount to be paid for such stamps, by allowing the distributor
21to make payment for the stamps at the time of purchasing them
22with a draft which shall be in such form as the Department
23prescribes, and which shall be payable within 21 days
24thereafter: Provided that such distributor has filed with the
25Department, and has received the Department's approval of, a
26bond, which is in addition to the bond required under Section 4

 

 

HB4300- 579 -LRB099 14379 HLH 38474 b

1of this Act, payable to the Department in an amount equal to
280% of such distributor's average monthly tax liability to the
3Department under this Act during the preceding calendar year or
4$500,000, whichever is less. The bond shall be joint and
5several and shall be in the form of a surety company bond in
6such form as the Department prescribes, or it may be in the
7form of a bank certificate of deposit or bank letter of credit.
8The bond shall be conditioned upon the distributor's payment of
9the amount of any 21-day draft which the Department accepts
10from that distributor for the delivery of stamps to that
11distributor under this Act. The distributor's failure to pay
12any such draft, when due, shall also make such distributor
13automatically liable to the Department for a penalty equal to
1425% of the amount of such draft.
15    On and after December 1, 1985 and until July 1, 2003, the
16Department shall allow a distributor 30 days in which to make
17final payment of the amount to be paid for such stamps, by
18allowing the distributor to make payment for the stamps at the
19time of purchasing them with a draft which shall be in such
20form as the Department prescribes, and which shall be payable
21within 30 days thereafter, and beginning on January 1, 2003 and
22thereafter, the draft shall be payable by means of electronic
23funds transfer: Provided that such distributor has filed with
24the Department, and has received the Department's approval of,
25a bond, which is in addition to the bond required under Section
264 of this Act, payable to the Department in an amount equal to

 

 

HB4300- 580 -LRB099 14379 HLH 38474 b

1150% of such distributor's average monthly tax liability to the
2Department under this Act during the preceding calendar year or
3$750,000, whichever is less, except that as to bonds filed on
4or after January 1, 1987, such additional bond shall be in an
5amount equal to 100% of such distributor's average monthly tax
6liability under this Act during the preceding calendar year or
7$750,000, whichever is less. The bond shall be joint and
8several and shall be in the form of a surety company bond in
9such form as the Department prescribes, or it may be in the
10form of a bank certificate of deposit or bank letter of credit.
11The bond shall be conditioned upon the distributor's payment of
12the amount of any 30-day draft which the Department accepts
13from that distributor for the delivery of stamps to that
14distributor under this Act. The distributor's failure to pay
15any such draft, when due, shall also make such distributor
16automatically liable to the Department for a penalty equal to
1725% of the amount of such draft.
18    Every prior continuous compliance taxpayer shall be exempt
19from all requirements under this Section concerning the
20furnishing of such bond, as defined in this Section, as a
21condition precedent to his being authorized to engage in the
22business licensed under this Act. This exemption shall continue
23for each such taxpayer until such time as he may be determined
24by the Department to be delinquent in the filing of any
25returns, or is determined by the Department (either through the
26Department's issuance of a final assessment which has become

 

 

HB4300- 581 -LRB099 14379 HLH 38474 b

1final under the Act, or by the taxpayer's filing of a return
2which admits tax to be due that is not paid) to be delinquent
3or deficient in the paying of any tax under this Act, at which
4time that taxpayer shall become subject to the bond
5requirements of this Section and, as a condition of being
6allowed to continue to engage in the business licensed under
7this Act, shall be required to furnish bond to the Department
8in such form as provided in this Section. Such taxpayer shall
9furnish such bond for a period of 2 years, after which, if the
10taxpayer has not been delinquent in the filing of any returns,
11or delinquent or deficient in the paying of any tax under this
12Act, the Department may reinstate such person as a prior
13continuance compliance taxpayer. Any taxpayer who fails to pay
14an admitted or established liability under this Act may also be
15required to post bond or other acceptable security with the
16Department guaranteeing the payment of such admitted or
17established liability.
18    Except as otherwise provided in this Section, any person
19aggrieved by any decision of the Department under this Section
20may, within the time allowed by law, protest and request a
21hearing before the Department, whereupon the Department shall
22give notice and shall hold a hearing in conformity with the
23provisions of this Act and then issue its final administrative
24decision in the matter to such person. Effective July 1, 2013,
25protests concerning matters that are subject to the
26jurisdiction of the Illinois Independent Tax Tribunal shall be

 

 

HB4300- 582 -LRB099 14379 HLH 38474 b

1filed in accordance with the Illinois Independent Tax Tribunal
2Act of 2012, and hearings concerning those matters shall be
3held before the Tribunal in accordance with that Act. With
4respect to protests filed with the Department prior to July 1,
52013 that would otherwise be subject to the jurisdiction of the
6Illinois Independent Tax Tribunal, the person filing the
7protest may elect to be subject to the provisions of the
8Illinois Independent Tax Tribunal Act of 2012 at any time on or
9after July 1, 2013, but not later than 30 days after the date
10on which the protest was filed. If made, the election shall be
11irrevocable. In the absence of such a protest filed within the
12time allowed by law, the Department's decision shall become
13final without any further determination being made or notice
14given.
15    The Department shall discharge any surety and shall release
16and return any bond or security deposited, assigned, pledged,
17or otherwise provided to it by a taxpayer under this Section
18within 30 days after:
19        (1) such Taxpayer becomes a prior continuous
20    compliance taxpayer; or
21        (2) such taxpayer has ceased to collect receipts on
22    which he is required to remit tax to the Department, has
23    filed a final tax return, and has paid to the Department an
24    amount sufficient to discharge his remaining tax liability
25    as determined by the Department under this Act. The
26    Department shall make a final determination of the

 

 

HB4300- 583 -LRB099 14379 HLH 38474 b

1    taxpayer's outstanding tax liability as expeditiously as
2    possible after his final tax return has been filed. If the
3    Department cannot make such final determination within 45
4    days after receiving the final tax return, within such
5    period it shall so notify the taxpayer, stating its reasons
6    therefor.
7    At the time of purchasing such stamps from the Department
8when purchase is required by this Act, or at the time when the
9tax which he has collected is remitted by a distributor to the
10Department without the purchase of stamps from the Department
11when that method of remitting the tax that has been collected
12is required or authorized by this Act, the distributor shall be
13allowed a discount during any year commencing July 1 and ending
14the following June 30 in accordance with the schedule set out
15hereinbelow, from the amount to be paid by him to the
16Department for such stamps, or to be paid by him to the
17Department on the basis of monthly remittances (as the case may
18be), to cover the cost, to such distributor, of collecting the
19tax herein imposed by affixing such stamps to the original
20packages of cigarettes sold by such distributor or by placing
21tax imprints underneath the sealed transparent wrapper of
22original packages of cigarettes sold by such distributor (as
23the case may be): (1) Prior to December 1, 1985, a discount
24equal to 1-2/3% of the amount of the tax up to and including
25the first $700,000 paid hereunder by such distributor to the
26Department during any such year; 1-1/3% of the next $700,000 of

 

 

HB4300- 584 -LRB099 14379 HLH 38474 b

1tax or any part thereof, paid hereunder by such distributor to
2the Department during any such year; 1% of the next $700,000 of
3tax, or any part thereof, paid hereunder by such distributor to
4the Department during any such year; and 2/3 of 1% of the
5amount of any additional tax paid hereunder by such distributor
6to the Department during any such year or (2) On and after
7December 1, 1985 and through June 30, 2016, a discount equal to
81.75% of the amount of the tax payable under this Act up to and
9including the first $3,000,000 paid hereunder by such
10distributor to the Department during any such year and 1.5% of
11the amount of any additional tax paid hereunder by such
12distributor to the Department during any such year.
13    Two or more distributors that use a common means of
14affixing revenue tax stamps or that are owned or controlled by
15the same interests shall be treated as a single distributor for
16the purpose of computing the discount.
17    Cigarette manufacturers who are distributors under Section
187(a) of this Act, and who place their cigarettes in original
19packages which are contained inside a sealed transparent
20wrapper, shall be required to remit the tax which they are
21required to collect under this Act to the Department by
22remitting the amount thereof to the Department by the 5th day
23of each month, covering cigarettes shipped or otherwise
24delivered to points in Illinois to purchasers during the
25preceding calendar month, but a distributor need not remit to
26the Department the tax so collected by him from purchasers

 

 

HB4300- 585 -LRB099 14379 HLH 38474 b

1under this Act to the extent to which such distributor is
2required to remit the tax imposed by the Cigarette Tax Act to
3the Department with respect to the same cigarettes. All taxes
4upon cigarettes under this Act are a direct tax upon the retail
5consumer and shall conclusively be presumed to be precollected
6for the purpose of convenience and facility only. Cigarette
7manufacturers that are distributors licensed under Section
87(a) of this Act and who place their cigarettes in original
9packages which are contained inside a sealed transparent
10wrapper, before delivering such cigarettes or causing such
11cigarettes to be delivered in this State to purchasers, shall
12evidence their obligation to collect and remit the tax due with
13respect to such cigarettes by imprinting language to be
14prescribed by the Department on each original package of such
15cigarettes underneath the sealed transparent outside wrapper
16of such original package, in such place thereon and in such
17manner as the Department may prescribe; provided (as stated
18hereinbefore) that this requirement does not apply when such
19distributor is required or authorized by the Cigarette Tax Act
20to place the tax imprint provided for in the last paragraph of
21Section 3 of that Act underneath the sealed transparent wrapper
22of such original package of cigarettes. Such imprinted language
23shall acknowledge the manufacturer's collection and payment of
24or liability for the tax imposed by this Act with respect to
25such cigarettes.
26    The Department shall adopt the design or designs of the tax

 

 

HB4300- 586 -LRB099 14379 HLH 38474 b

1stamps and shall procure the printing of such stamps in such
2amounts and denominations as it deems necessary to provide for
3the affixation of the proper amount of tax stamps to each
4original package of cigarettes.
5    Where tax stamps are required, the Department may authorize
6distributors to affix revenue tax stamps by imprinting tax
7meter stamps upon original packages of cigarettes. The
8Department shall adopt rules and regulations relating to the
9imprinting of such tax meter stamps as will result in payment
10of the proper taxes as herein imposed. No distributor may affix
11revenue tax stamps to original packages of cigarettes by
12imprinting meter stamps thereon unless such distributor has
13first obtained permission from the Department to employ this
14method of affixation. The Department shall regulate the use of
15tax meters and may, to assure the proper collection of the
16taxes imposed by this Act, revoke or suspend the privilege,
17theretofore granted by the Department to any distributor, to
18imprint tax meter stamps upon original packages of cigarettes.
19    The tax hereby imposed and not paid pursuant to this
20Section shall be paid to the Department directly by any person
21using such cigarettes within this State, pursuant to Section 12
22hereof.
23    A distributor shall not affix, or cause to be affixed, any
24stamp or imprint to a package of cigarettes, as provided for in
25this Section, if the tobacco product manufacturer, as defined
26in Section 10 of the Tobacco Product Manufacturers' Escrow Act,

 

 

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1that made or sold the cigarettes has failed to become a
2participating manufacturer, as defined in subdivision (a)(1)
3of Section 15 of the Tobacco Product Manufacturers' Escrow Act,
4or has failed to create a qualified escrow fund for any
5cigarettes manufactured by the tobacco product manufacturer
6and sold in this State or otherwise failed to bring itself into
7compliance with subdivision (a)(2) of Section 15 of the Tobacco
8Product Manufacturers' Escrow Act.
9(Source: P.A. 96-782, eff. 1-1-10; 96-1027, eff. 7-12-10;
1097-1129, eff. 8-28-12.)
 
11    Section 50-35. The Hotel Operators' Occupation Tax Act is
12amended by changing Section 6 as follows:
 
13    (35 ILCS 145/6)  (from Ch. 120, par. 481b.36)
14    Sec. 6. Except as provided hereinafter in this Section, on
15or before the last day of each calendar month, every person
16engaged in the business of renting, leasing or letting rooms in
17a hotel in this State during the preceding calendar month shall
18file a return with the Department, stating:
19        1. The name of the operator;
20        2. His residence address and the address of his
21    principal place of business and the address of the
22    principal place of business (if that is a different
23    address) from which he engages in the business of renting,
24    leasing or letting rooms in a hotel in this State;

 

 

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1        3. Total amount of rental receipts received by him
2    during the preceding calendar month from renting, leasing
3    or letting rooms during such preceding calendar month;
4        4. Total amount of rental receipts received by him
5    during the preceding calendar month from renting, leasing
6    or letting rooms to permanent residents during such
7    preceding calendar month;
8        5. Total amount of other exclusions from gross rental
9    receipts allowed by this Act;
10        6. Gross rental receipts which were received by him
11    during the preceding calendar month and upon the basis of
12    which the tax is imposed;
13        7. The amount of tax due;
14        8. Such other reasonable information as the Department
15    may require.
16    If the operator's average monthly tax liability to the
17Department does not exceed $200, the Department may authorize
18his returns to be filed on a quarter annual basis, with the
19return for January, February and March of a given year being
20due by April 30 of such year; with the return for April, May
21and June of a given year being due by July 31 of such year; with
22the return for July, August and September of a given year being
23due by October 31 of such year, and with the return for
24October, November and December of a given year being due by
25January 31 of the following year.
26    If the operator's average monthly tax liability to the

 

 

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1Department does not exceed $50, the Department may authorize
2his returns to be filed on an annual basis, with the return for
3a given year being due by January 31 of the following year.
4    Such quarter annual and annual returns, as to form and
5substance, shall be subject to the same requirements as monthly
6returns.
7    Notwithstanding any other provision in this Act concerning
8the time within which an operator may file his return, in the
9case of any operator who ceases to engage in a kind of business
10which makes him responsible for filing returns under this Act,
11such operator shall file a final return under this Act with the
12Department not more than 1 month after discontinuing such
13business.
14    Where the same person has more than 1 business registered
15with the Department under separate registrations under this
16Act, such person shall not file each return that is due as a
17single return covering all such registered businesses, but
18shall file separate returns for each such registered business.
19    In his return, the operator shall determine the value of
20any consideration other than money received by him in
21connection with the renting, leasing or letting of rooms in the
22course of his business and he shall include such value in his
23return. Such determination shall be subject to review and
24revision by the Department in the manner hereinafter provided
25for the correction of returns.
26    Where the operator is a corporation, the return filed on

 

 

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1behalf of such corporation shall be signed by the president,
2vice-president, secretary or treasurer or by the properly
3accredited agent of such corporation.
4    The person filing the return herein provided for shall, at
5the time of filing such return, pay to the Department the
6amount of tax herein imposed. The operator filing the return
7under this Section shall, at the time of filing such return,
8pay to the Department the amount of tax imposed by this Act
9less, through June 30, 2016, a discount of 2.1% or $25 per
10calendar year, whichever is greater, which is allowed to
11reimburse the operator for the expenses incurred in keeping
12records, preparing and filing returns, remitting the tax and
13supplying data to the Department on request.
14    There shall be deposited in the Build Illinois Fund in the
15State Treasury for each State fiscal year 40% of the amount of
16total net proceeds from the tax imposed by subsection (a) of
17Section 3. Of the remaining 60%, $5,000,000 shall be deposited
18in the Illinois Sports Facilities Fund and credited to the
19Subsidy Account each fiscal year by making monthly deposits in
20the amount of 1/8 of $5,000,000 plus cumulative deficiencies in
21such deposits for prior months, and an additional $8,000,000
22shall be deposited in the Illinois Sports Facilities Fund and
23credited to the Advance Account each fiscal year by making
24monthly deposits in the amount of 1/8 of $8,000,000 plus any
25cumulative deficiencies in such deposits for prior months;
26provided, that for fiscal years ending after June 30, 2001, the

 

 

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1amount to be so deposited into the Illinois Sports Facilities
2Fund and credited to the Advance Account each fiscal year shall
3be increased from $8,000,000 to the then applicable Advance
4Amount and the required monthly deposits beginning with July
52001 shall be in the amount of 1/8 of the then applicable
6Advance Amount plus any cumulative deficiencies in those
7deposits for prior months. (The deposits of the additional
8$8,000,000 or the then applicable Advance Amount, as
9applicable, during each fiscal year shall be treated as
10advances of funds to the Illinois Sports Facilities Authority
11for its corporate purposes to the extent paid to the Authority
12or its trustee and shall be repaid into the General Revenue
13Fund in the State Treasury by the State Treasurer on behalf of
14the Authority pursuant to Section 19 of the Illinois Sports
15Facilities Authority Act, as amended. If in any fiscal year the
16full amount of the then applicable Advance Amount is not repaid
17into the General Revenue Fund, then the deficiency shall be
18paid from the amount in the Local Government Distributive Fund
19that would otherwise be allocated to the City of Chicago under
20the State Revenue Sharing Act.)
21    For purposes of the foregoing paragraph, the term "Advance
22Amount" means, for fiscal year 2002, $22,179,000, and for
23subsequent fiscal years through fiscal year 2032, 105.615% of
24the Advance Amount for the immediately preceding fiscal year,
25rounded up to the nearest $1,000.
26    Of the remaining 60% of the amount of total net proceeds

 

 

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1prior to August 1, 2011 from the tax imposed by subsection (a)
2of Section 3 after all required deposits in the Illinois Sports
3Facilities Fund, the amount equal to 8% of the net revenue
4realized from this Act plus an amount equal to 8% of the net
5revenue realized from any tax imposed under Section 4.05 of the
6Chicago World's Fair-1992 Authority Act during the preceding
7month shall be deposited in the Local Tourism Fund each month
8for purposes authorized by Section 605-705 of the Department of
9Commerce and Economic Opportunity Law (20 ILCS 605/605-705). Of
10the remaining 60% of the amount of total net proceeds beginning
11on August 1, 2011 from the tax imposed by subsection (a) of
12Section 3 after all required deposits in the Illinois Sports
13Facilities Fund, an amount equal to 8% of the net revenue
14realized from this Act plus an amount equal to 8% of the net
15revenue realized from any tax imposed under Section 4.05 of the
16Chicago World's Fair-1992 Authority Act during the preceding
17month shall be deposited as follows: 18% of such amount shall
18be deposited into the Chicago Travel Industry Promotion Fund
19for the purposes described in subsection (n) of Section 5 of
20the Metropolitan Pier and Exposition Authority Act and the
21remaining 82% of such amount shall be deposited into the Local
22Tourism Fund each month for purposes authorized by Section
23605-705 of the Department of Commerce and Economic Opportunity
24Law. Beginning on August 1, 1999 and ending on July 31, 2011,
25an amount equal to 4.5% of the net revenue realized from the
26Hotel Operators' Occupation Tax Act during the preceding month

 

 

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1shall be deposited into the International Tourism Fund for the
2purposes authorized in Section 605-707 of the Department of
3Commerce and Economic Opportunity Law. Beginning on August 1,
42011, an amount equal to 4.5% of the net revenue realized from
5this Act during the preceding month shall be deposited as
6follows: 55% of such amount shall be deposited into the Chicago
7Travel Industry Promotion Fund for the purposes described in
8subsection (n) of Section 5 of the Metropolitan Pier and
9Exposition Authority Act and the remaining 45% of such amount
10deposited into the International Tourism Fund for the purposes
11authorized in Section 605-707 of the Department of Commerce and
12Economic Opportunity Law. "Net revenue realized for a month"
13means the revenue collected by the State under that Act during
14the previous month less the amount paid out during that same
15month as refunds to taxpayers for overpayment of liability
16under that Act.
17    After making all these deposits, all other proceeds of the
18tax imposed under subsection (a) of Section 3 shall be
19deposited in the General Revenue Fund in the State Treasury.
20All moneys received by the Department from the additional tax
21imposed under subsection (b) of Section 3 shall be deposited
22into the Build Illinois Fund in the State Treasury.
23    The Department may, upon separate written notice to a
24taxpayer, require the taxpayer to prepare and file with the
25Department on a form prescribed by the Department within not
26less than 60 days after receipt of the notice an annual

 

 

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1information return for the tax year specified in the notice.
2Such annual return to the Department shall include a statement
3of gross receipts as shown by the operator's last State income
4tax return. If the total receipts of the business as reported
5in the State income tax return do not agree with the gross
6receipts reported to the Department for the same period, the
7operator shall attach to his annual information return a
8schedule showing a reconciliation of the 2 amounts and the
9reasons for the difference. The operator's annual information
10return to the Department shall also disclose pay roll
11information of the operator's business during the year covered
12by such return and any additional reasonable information which
13the Department deems would be helpful in determining the
14accuracy of the monthly, quarterly or annual tax returns by
15such operator as hereinbefore provided for in this Section.
16    If the annual information return required by this Section
17is not filed when and as required the taxpayer shall be liable
18for a penalty in an amount determined in accordance with
19Section 3-4 of the Uniform Penalty and Interest Act until such
20return is filed as required, the penalty to be assessed and
21collected in the same manner as any other penalty provided for
22in this Act.
23    The chief executive officer, proprietor, owner or highest
24ranking manager shall sign the annual return to certify the
25accuracy of the information contained therein. Any person who
26willfully signs the annual return containing false or

 

 

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1inaccurate information shall be guilty of perjury and punished
2accordingly. The annual return form prescribed by the
3Department shall include a warning that the person signing the
4return may be liable for perjury.
5    The foregoing portion of this Section concerning the filing
6of an annual information return shall not apply to an operator
7who is not required to file an income tax return with the
8United States Government.
9(Source: P.A. 97-617, eff. 10-26-11.)
 
10    Section 50-40. The Motor Fuel Tax Law is amended by
11changing Sections 2b, 6, and 6a as follows:
 
12    (35 ILCS 505/2b)  (from Ch. 120, par. 418b)
13    Sec. 2b. In addition to the tax collection and reporting
14responsibilities imposed elsewhere in this Act, a person who is
15required to pay the tax imposed by Section 2a of this Act shall
16pay the tax to the Department by return showing all fuel
17purchased, acquired or received and sold, distributed or used
18during the preceding calendar month including losses of fuel as
19the result of evaporation or shrinkage due to temperature
20variations, and such other reasonable information as the
21Department may require. Losses of fuel as the result of
22evaporation or shrinkage due to temperature variations may not
23exceed 1% of the total gallons in storage at the beginning of
24the month, plus the receipts of gallonage during the month,

 

 

HB4300- 596 -LRB099 14379 HLH 38474 b

1minus the gallonage remaining in storage at the end of the
2month. Any loss reported that is in excess of this amount shall
3be subject to the tax imposed by Section 2a of this Law. On and
4after July 1, 2001, for each 6-month period January through
5June, net losses of fuel (for each category of fuel that is
6required to be reported on a return) as the result of
7evaporation or shrinkage due to temperature variations may not
8exceed 1% of the total gallons in storage at the beginning of
9each January, plus the receipts of gallonage each January
10through June, minus the gallonage remaining in storage at the
11end of each June. On and after July 1, 2001, for each 6-month
12period July through December, net losses of fuel (for each
13category of fuel that is required to be reported on a return)
14as the result of evaporation or shrinkage due to temperature
15variations may not exceed 1% of the total gallons in storage at
16the beginning of each July, plus the receipts of gallonage each
17July through December, minus the gallonage remaining in storage
18at the end of each December. Any net loss reported that is in
19excess of this amount shall be subject to the tax imposed by
20Section 2a of this Law. For purposes of this Section, "net
21loss" means the number of gallons gained through temperature
22variations minus the number of gallons lost through temperature
23variations or evaporation for each of the respective 6-month
24periods.
25    The return shall be prescribed by the Department and shall
26be filed between the 1st and 20th days of each calendar month.

 

 

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1The Department may, in its discretion, combine the returns
2filed under this Section, Section 5, and Section 5a of this
3Act. The return must be accompanied by appropriate
4computer-generated magnetic media supporting schedule data in
5the format required by the Department, unless, as provided by
6rule, the Department grants an exception upon petition of a
7taxpayer. If the return is filed timely, the seller shall take
8a discount of 2% through June 30, 2003 and 1.75% through June
930, 2016, thereafter which is allowed to reimburse the seller
10for the expenses incurred in keeping records, preparing and
11filing returns, collecting and remitting the tax and supplying
12data to the Department on request. The discount, however, shall
13be applicable only to the amount of payment which accompanies a
14return that is filed timely in accordance with this Section.
15(Source: P.A. 92-30, eff. 7-1-01; 93-32, eff. 6-20-03.)
 
16    (35 ILCS 505/6)  (from Ch. 120, par. 422)
17    Sec. 6. Collection of tax; distributors. A distributor who
18sells or distributes any motor fuel, which he is required by
19Section 5 to report to the Department when filing a return,
20shall (except as hereinafter provided) collect at the time of
21such sale and distribution, the amount of tax imposed under
22this Act on all such motor fuel sold and distributed, and at
23the time of making a return, the distributor shall pay to the
24Department the amount so collected less a discount of 2%
25through June 30, 2003 and 1.75% through June 30, 2016

 

 

HB4300- 598 -LRB099 14379 HLH 38474 b

1thereafter which is allowed to reimburse the distributor for
2the expenses incurred in keeping records, preparing and filing
3returns, collecting and remitting the tax and supplying data to
4the Department on request, and shall also pay to the Department
5an amount equal to the amount that would be collectible as a
6tax in the event of a sale thereof on all such motor fuel used
7by said distributor during the period covered by the return.
8However, no payment shall be made based upon dyed diesel fuel
9used by the distributor for non-highway purposes. The discount
10shall only be applicable to the amount of tax payment which
11accompanies a return which is filed timely in accordance with
12Section 5 of this Act. In each subsequent sale of motor fuel on
13which the amount of tax imposed under this Act has been
14collected as provided in this Section, the amount so collected
15shall be added to the selling price, so that the amount of tax
16is paid ultimately by the user of the motor fuel. However, no
17collection or payment shall be made in the case of the sale or
18use of any motor fuel to the extent to which such sale or use of
19motor fuel may not, under the constitution and statutes of the
20United States, be made the subject of taxation by this State. A
21person whose license to act as a distributor of fuel has been
22revoked shall, at the time of making a return, also pay to the
23Department an amount equal to the amount that would be
24collectible as a tax in the event of a sale thereof on all
25motor fuel, which he is required by the second paragraph of
26Section 5 to report to the Department in making a return, and

 

 

HB4300- 599 -LRB099 14379 HLH 38474 b

1which he had on hand on the date on which the license was
2revoked, and with respect to which no tax had been previously
3paid under this Act.
4    A distributor may make tax free sales of motor fuel, with
5respect to which he is otherwise required to collect the tax,
6only as specified in the following items 1 through 7.
7        1. When the sale is made to a person holding a valid
8    unrevoked license as a distributor, by making a specific
9    notation thereof on invoices or sales slip covering each
10    sale.
11        2. When the sale is made with delivery to a purchaser
12    outside of this State.
13        3. When the sale is made to the Federal Government or
14    its instrumentalities.
15        4. When the sale is made to a municipal corporation
16    owning and operating a local transportation system for
17    public service in this State when an official certificate
18    of exemption is obtained in lieu of the tax.
19        5. When the sale is made to a privately owned public
20    utility owning and operating 2 axle vehicles designed and
21    used for transporting more than 7 passengers, which
22    vehicles are used as common carriers in general
23    transportation of passengers, are not devoted to any
24    specialized purpose and are operated entirely within the
25    territorial limits of a single municipality or of any group
26    of contiguous municipalities, or in a close radius thereof,

 

 

HB4300- 600 -LRB099 14379 HLH 38474 b

1    and the operations of which are subject to the regulations
2    of the Illinois Commerce Commission, when an official
3    certificate of exemption is obtained in lieu of the tax.
4        6. When a sale of special fuel is made to a person
5    holding a valid, unrevoked license as a supplier, by making
6    a specific notation thereof on the invoice or sales slip
7    covering each such sale.
8        7. When a sale of dyed diesel fuel is made to someone
9    other than a licensed distributor or a licensed supplier
10    for non-highway purposes and the fuel is (i) delivered from
11    a vehicle designed for the specific purpose of such sales
12    and delivered directly into a stationary bulk storage tank
13    that displays the notice required by Section 4f of this
14    Act, (ii) delivered from a vehicle designed for the
15    specific purpose of such sales and delivered directly into
16    the fuel supply tanks of non-highway vehicles that are not
17    required to be registered for highway use, or (iii)
18    dispensed from a dyed diesel fuel dispensing facility that
19    has withdrawal facilities that are not readily accessible
20    to and are not capable of dispensing dyed diesel fuel into
21    the fuel supply tank of a motor vehicle.
22        A specific notation is required on the invoice or sales
23    slip covering such sales, and any supporting documentation
24    that may be required by the Department must be obtained by
25    the distributor. The distributor shall obtain and keep the
26    supporting documentation in such form as the Department may

 

 

HB4300- 601 -LRB099 14379 HLH 38474 b

1    require by rule.
2        For purposes of this item 7, a dyed diesel fuel
3    dispensing facility is considered to have withdrawal
4    facilities that are "not readily accessible to and not
5    capable of dispensing dyed diesel fuel into the fuel supply
6    tank of a motor vehicle" only if the dyed diesel fuel is
7    delivered from: (i) a dispenser hose that is short enough
8    so that it will not reach the fuel supply tank of a motor
9    vehicle or (ii) a dispenser that is enclosed by a fence or
10    other physical barrier so that a vehicle cannot pull
11    alongside the dispenser to permit fueling.
12        8. (Blank).
13    All special fuel sold or used for non-highway purposes must
14have a dye added in accordance with Section 4d of this Law.
15    All suits or other proceedings brought for the purpose of
16recovering any taxes, interest or penalties due the State of
17Illinois under this Act may be maintained in the name of the
18Department.
19(Source: P.A. 96-1384, eff. 7-29-10.)
 
20    (35 ILCS 505/6a)  (from Ch. 120, par. 422a)
21    Sec. 6a. Collection of tax; suppliers. A supplier, other
22than a licensed distributor, who sells or distributes any
23special fuel, which he is required by Section 5a to report to
24the Department when filing a return, shall (except as
25hereinafter provided) collect at the time of such sale and

 

 

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1distribution, the amount of tax imposed under this Act on all
2such special fuel sold and distributed, and at the time of
3making a return, the supplier shall pay to the Department the
4amount so collected less a discount of 2% through June 30, 2003
5and 1.75% through June 30, 2016 thereafter which is allowed to
6reimburse the supplier for the expenses incurred in keeping
7records, preparing and filing returns, collecting and
8remitting the tax and supplying data to the Department on
9request, and shall also pay to the Department an amount equal
10to the amount that would be collectible as a tax in the event
11of a sale thereof on all such special fuel used by said
12supplier during the period covered by the return. However, no
13payment shall be made based upon dyed diesel fuel used by said
14supplier for non-highway purposes. The discount shall only be
15applicable to the amount of tax payment which accompanies a
16return which is filed timely in accordance with Section 5(a) of
17this Act. In each subsequent sale of special fuel on which the
18amount of tax imposed under this Act has been collected as
19provided in this Section, the amount so collected shall be
20added to the selling price, so that the amount of tax is paid
21ultimately by the user of the special fuel. However, no
22collection or payment shall be made in the case of the sale or
23use of any special fuel to the extent to which such sale or use
24of motor fuel may not, under the Constitution and statutes of
25the United States, be made the subject of taxation by this
26State.

 

 

HB4300- 603 -LRB099 14379 HLH 38474 b

1    A person whose license to act as supplier of special fuel
2has been revoked shall, at the time of making a return, also
3pay to the Department an amount equal to the amount that would
4be collectible as a tax in the event of a sale thereof on all
5special fuel, which he is required by the 1st paragraph of
6Section 5a to report to the Department in making a return.
7    A supplier may make tax-free sales of special fuel, with
8respect to which he is otherwise required to collect the tax,
9only as specified in the following items 1 through 7.
10        1. When the sale is made to the federal government or
11    its instrumentalities.
12        2. When the sale is made to a municipal corporation
13    owning and operating a local transportation system for
14    public service in this State when an official certificate
15    of exemption is obtained in lieu of the tax.
16        3. When the sale is made to a privately owned public
17    utility owning and operating 2 axle vehicles designed and
18    used for transporting more than 7 passengers, which
19    vehicles are used as common carriers in general
20    transportation of passengers, are not devoted to any
21    specialized purpose and are operated entirely within the
22    territorial limits of a single municipality or of any group
23    of contiguous municipalities, or in a close radius thereof,
24    and the operations of which are subject to the regulations
25    of the Illinois Commerce Commission, when an official
26    certificate of exemption is obtained in lieu of the tax.

 

 

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1        4. When a sale is made to a person holding a valid
2    unrevoked license as a supplier or a distributor by making
3    a specific notation thereof on invoice or sales slip
4    covering each such sale.
5        5. When a sale of dyed diesel fuel is made to someone
6    other than a licensed distributor or licensed supplier for
7    non-highway purposes and the fuel is (i) delivered from a
8    vehicle designed for the specific purpose of such sales and
9    delivered directly into a stationary bulk storage tank that
10    displays the notice required by Section 4f of this Act,
11    (ii) delivered from a vehicle designed for the specific
12    purpose of such sales and delivered directly into the fuel
13    supply tanks of non-highway vehicles that are not required
14    to be registered for highway use, or (iii) dispensed from a
15    dyed diesel fuel dispensing facility that has withdrawal
16    facilities that are not readily accessible to and are not
17    capable of dispensing dyed diesel fuel into the fuel supply
18    tank of a motor vehicle.
19        A specific notation is required on the invoice or sales
20    slip covering such sales, and any supporting documentation
21    that may be required by the Department must be obtained by
22    the supplier. The supplier shall obtain and keep the
23    supporting documentation in such form as the Department may
24    require by rule.
25        For purposes of this item 5, a dyed diesel fuel
26    dispensing facility is considered to have withdrawal

 

 

HB4300- 605 -LRB099 14379 HLH 38474 b

1    facilities that are "not readily accessible to and not
2    capable of dispensing dyed diesel fuel into the fuel supply
3    tank of a motor vehicle" only if the dyed diesel fuel is
4    delivered from: (i) a dispenser hose that is short enough
5    so that it will not reach the fuel supply tank of a motor
6    vehicle or (ii) a dispenser that is enclosed by a fence or
7    other physical barrier so that a vehicle cannot pull
8    alongside the dispenser to permit fueling.
9        6. (Blank).
10        7. When a sale of special fuel is made to a person
11    where delivery is made outside of this State.
12    All special fuel sold or used for non-highway purposes must
13have a dye added in accordance with Section 4d of this Law.
14    All suits or other proceedings brought for the purpose of
15recovering any taxes, interest or penalties due the State of
16Illinois under this Act may be maintained in the name of the
17Department.
18(Source: P.A. 96-1384, eff. 7-29-10.)
 
19    Section 50-45. The Telecommunications Excise Tax Act is
20amended by changing Section 6 as follows:
 
21    (35 ILCS 630/6)  (from Ch. 120, par. 2006)
22    Sec. 6. Except as provided hereinafter in this Section, on
23or before the last day of each month, each retailer maintaining
24a place of business in this State shall make a return to the

 

 

HB4300- 606 -LRB099 14379 HLH 38474 b

1Department for the preceding calendar month, stating:
2        1. His name;
3        2. The address of his principal place of business, or
4    the address of the principal place of business (if that is
5    a different address) from which he engages in the business
6    of transmitting telecommunications;
7        3. Total amount of gross charges billed by him during
8    the preceding calendar month for providing
9    telecommunications during such calendar month;
10        4. Total amount received by him during the preceding
11    calendar month on credit extended;
12        5. Deductions allowed by law;
13        6. Gross charges which were billed by him during the
14    preceding calendar month and upon the basis of which the
15    tax is imposed;
16        7. Amount of tax (computed upon Item 6);
17        8. Such other reasonable information as the Department
18    may require.
19    Any taxpayer required to make payments under this Section
20may make the payments by electronic funds transfer. The
21Department shall adopt rules necessary to effectuate a program
22of electronic funds transfer. Any taxpayer who has average
23monthly tax billings due to the Department under this Act and
24the Simplified Municipal Telecommunications Tax Act that
25exceed $1,000 shall make all payments by electronic funds
26transfer as required by rules of the Department and shall file

 

 

HB4300- 607 -LRB099 14379 HLH 38474 b

1the return required by this Section by electronic means as
2required by rules of the Department.
3    If the retailer's average monthly tax billings due to the
4Department under this Act and the Simplified Municipal
5Telecommunications Tax Act do not exceed $1,000, the Department
6may authorize his returns to be filed on a quarter annual
7basis, with the return for January, February and March of a
8given year being due by April 30 of such year; with the return
9for April, May and June of a given year being due by July 31st
10of such year; with the return for July, August and September of
11a given year being due by October 31st of such year; and with
12the return of October, November and December of a given year
13being due by January 31st of the following year.
14    If the retailer is otherwise required to file a monthly or
15quarterly return and if the retailer's average monthly tax
16billings due to the Department under this Act and the
17Simplified Municipal Telecommunications Tax Act do not exceed
18$400, the Department may authorize his or her return to be
19filed on an annual basis, with the return for a given year
20being due by January 31st of the following year.
21    Notwithstanding any other provision of this Article
22containing the time within which a retailer may file his
23return, in the case of any retailer who ceases to engage in a
24kind of business which makes him responsible for filing returns
25under this Article, such retailer shall file a final return
26under this Article with the Department not more than one month

 

 

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1after discontinuing such business.
2    In making such return, the retailer shall determine the
3value of any consideration other than money received by him and
4he shall include such value in his return. Such determination
5shall be subject to review and revision by the Department in
6the manner hereinafter provided for the correction of returns.
7    Each retailer whose average monthly liability to the
8Department under this Article and the Simplified Municipal
9Telecommunications Tax Act was $25,000 or more during the
10preceding calendar year, excluding the month of highest
11liability and the month of lowest liability in such calendar
12year, and who is not operated by a unit of local government,
13shall make estimated payments to the Department on or before
14the 7th, 15th, 22nd and last day of the month during which tax
15collection liability to the Department is incurred in an amount
16not less than the lower of either 22.5% of the retailer's
17actual tax collections for the month or 25% of the retailer's
18actual tax collections for the same calendar month of the
19preceding year. The amount of such quarter monthly payments
20shall be credited against the final liability of the retailer's
21return for that month. Any outstanding credit, approved by the
22Department, arising from the retailer's overpayment of its
23final liability for any month may be applied to reduce the
24amount of any subsequent quarter monthly payment or credited
25against the final liability of the retailer's return for any
26subsequent month. If any quarter monthly payment is not paid at

 

 

HB4300- 609 -LRB099 14379 HLH 38474 b

1the time or in the amount required by this Section, the
2retailer shall be liable for penalty and interest on the
3difference between the minimum amount due as a payment and the
4amount of such payment actually and timely paid, except insofar
5as the retailer has previously made payments for that month to
6the Department in excess of the minimum payments previously
7due.
8    The retailer making the return herein provided for shall,
9at the time of making such return, pay to the Department the
10amount of tax herein imposed, less, through June 30, 2016, a
11discount of 1% which is allowed to reimburse the retailer for
12the expenses incurred in keeping records, billing the customer,
13preparing and filing returns, remitting the tax, and supplying
14data to the Department upon request. No discount may be claimed
15by a retailer on returns not timely filed and for taxes not
16timely remitted.
17    On and after the effective date of this Article of 1985, of
18the moneys received by the Department of Revenue pursuant to
19this Article, other than moneys received pursuant to the
20additional taxes imposed by Public Act 90-548:
21        (1) $1,000,000 shall be paid each month into the Common
22    School Fund;
23        (2) beginning on the first day of the first calendar
24    month to occur on or after the effective date of this
25    amendatory Act of the 98th General Assembly, an amount
26    equal to 1/12 of 5% of the cash receipts collected during

 

 

HB4300- 610 -LRB099 14379 HLH 38474 b

1    the preceding fiscal year by the Audit Bureau of the
2    Department from the tax under this Act and the Simplified
3    Municipal Telecommunications Tax Act shall be paid each
4    month into the Tax Compliance and Administration Fund;
5    those moneys shall be used, subject to appropriation, to
6    fund additional auditors and compliance personnel at the
7    Department of Revenue; and
8        (3) the remainder shall be deposited into the General
9    Revenue Fund.
10    On and after February 1, 1998, however, of the moneys
11received by the Department of Revenue pursuant to the
12additional taxes imposed by Public Act 90-548, one-half shall
13be deposited into the School Infrastructure Fund and one-half
14shall be deposited into the Common School Fund. On and after
15the effective date of this amendatory Act of the 91st General
16Assembly, if in any fiscal year the total of the moneys
17deposited into the School Infrastructure Fund under this Act is
18less than the total of the moneys deposited into that Fund from
19the additional taxes imposed by Public Act 90-548 during fiscal
20year 1999, then, as soon as possible after the close of the
21fiscal year, the Comptroller shall order transferred and the
22Treasurer shall transfer from the General Revenue Fund to the
23School Infrastructure Fund an amount equal to the difference
24between the fiscal year total deposits and the total amount
25deposited into the Fund in fiscal year 1999.
26(Source: P.A. 98-1098, eff. 8-26-14.)
 

 

 

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1    Section 50-50. The Liquor Control Act of 1934 is amended by
2changing Section 8-2 as follows:
 
3    (235 ILCS 5/8-2)  (from Ch. 43, par. 159)
4    Sec. 8-2. It is the duty of each manufacturer with respect
5to alcoholic liquor produced or imported by such manufacturer,
6or purchased tax-free by such manufacturer from another
7manufacturer or importing distributor, and of each importing
8distributor as to alcoholic liquor purchased by such importing
9distributor from foreign importers or from anyone from any
10point in the United States outside of this State or purchased
11tax-free from another manufacturer or importing distributor,
12to pay the tax imposed by Section 8-1 to the Department of
13Revenue on or before the 15th day of the calendar month
14following the calendar month in which such alcoholic liquor is
15sold or used by such manufacturer or by such importing
16distributor other than in an authorized tax-free manner or to
17pay that tax electronically as provided in this Section.
18    Each manufacturer and each importing distributor shall
19make payment under one of the following methods: (1) on or
20before the 15th day of each calendar month, file in person or
21by United States first-class mail, postage pre-paid, with the
22Department of Revenue, on forms prescribed and furnished by the
23Department, a report in writing in such form as may be required
24by the Department in order to compute, and assure the accuracy

 

 

HB4300- 612 -LRB099 14379 HLH 38474 b

1of, the tax due on all taxable sales and uses of alcoholic
2liquor occurring during the preceding month. Payment of the tax
3in the amount disclosed by the report shall accompany the
4report or, (2) on or before the 15th day of each calendar
5month, electronically file with the Department of Revenue, on
6forms prescribed and furnished by the Department, an electronic
7report in such form as may be required by the Department in
8order to compute, and assure the accuracy of, the tax due on
9all taxable sales and uses of alcoholic liquor occurring during
10the preceding month. An electronic payment of the tax in the
11amount disclosed by the report shall accompany the report. A
12manufacturer or distributor who files an electronic report and
13electronically pays the tax imposed pursuant to Section 8-1 to
14the Department of Revenue on or before the 15th day of the
15calendar month following the calendar month in which such
16alcoholic liquor is sold or used by that manufacturer or
17importing distributor other than in an authorized tax-free
18manner shall pay to the Department the amount of the tax
19imposed pursuant to Section 8-1, less a discount which is
20allowed to reimburse the manufacturer or importing distributor
21for the expenses incurred in keeping and maintaining records,
22preparing and filing the electronic returns, remitting the tax,
23and supplying data to the Department upon request.
24    The discount shall be in an amount as follows:
25        (1) For original returns due on or after January 1,
26    2003 through September 30, 2003, the discount shall be

 

 

HB4300- 613 -LRB099 14379 HLH 38474 b

1    1.75% or $1,250 per return, whichever is less;
2        (2) For original returns due on or after October 1,
3    2003 through September 30, 2004, the discount shall be 2%
4    or $3,000 per return, whichever is less; and
5        (3) For original returns due on or after October 1,
6    2004 through June 30, 2016, the discount shall be 2% or
7    $2,000 per return, whichever is less; and .
8        (4) No discount shall be allowed on or after July 1,
9    2016.
10    The Department may, if it deems it necessary in order to
11insure the payment of the tax imposed by this Article, require
12returns to be made more frequently than and covering periods of
13less than a month. Such return shall contain such further
14information as the Department may reasonably require.
15    It shall be presumed that all alcoholic liquors acquired or
16made by any importing distributor or manufacturer have been
17sold or used by him in this State and are the basis for the tax
18imposed by this Article unless proven, to the satisfaction of
19the Department, that such alcoholic liquors are (1) still in
20the possession of such importing distributor or manufacturer,
21or (2) prior to the termination of possession have been lost by
22theft or through unintentional destruction, or (3) that such
23alcoholic liquors are otherwise exempt from taxation under this
24Act.
25    The Department may require any foreign importer to file
26monthly information returns, by the 15th day of the month

 

 

HB4300- 614 -LRB099 14379 HLH 38474 b

1following the month which any such return covers, if the
2Department determines this to be necessary to the proper
3performance of the Department's functions and duties under this
4Act. Such return shall contain such information as the
5Department may reasonably require.
6    Every manufacturer and importing distributor shall also
7file, with the Department, a bond in an amount not less than
8$1,000 and not to exceed $100,000 on a form to be approved by,
9and with a surety or sureties satisfactory to, the Department.
10Such bond shall be conditioned upon the manufacturer or
11importing distributor paying to the Department all monies
12becoming due from such manufacturer or importing distributor
13under this Article. The Department shall fix the penalty of
14such bond in each case, taking into consideration the amount of
15alcoholic liquor expected to be sold and used by such
16manufacturer or importing distributor, and the penalty fixed by
17the Department shall be sufficient, in the Department's
18opinion, to protect the State of Illinois against failure to
19pay any amount due under this Article, but the amount of the
20penalty fixed by the Department shall not exceed twice the
21amount of tax liability of a monthly return, nor shall the
22amount of such penalty be less than $1,000. The Department
23shall notify the Commission of the Department's approval or
24disapproval of any such manufacturer's or importing
25distributor's bond, or of the termination or cancellation of
26any such bond, or of the Department's direction to a

 

 

HB4300- 615 -LRB099 14379 HLH 38474 b

1manufacturer or importing distributor that he must file
2additional bond in order to comply with this Section. The
3Commission shall not issue a license to any applicant for a
4manufacturer's or importing distributor's license unless the
5Commission has received a notification from the Department
6showing that such applicant has filed a satisfactory bond with
7the Department hereunder and that such bond has been approved
8by the Department. Failure by any licensed manufacturer or
9importing distributor to keep a satisfactory bond in effect
10with the Department or to furnish additional bond to the
11Department, when required hereunder by the Department to do so,
12shall be grounds for the revocation or suspension of such
13manufacturer's or importing distributor's license by the
14Commission. If a manufacturer or importing distributor fails to
15pay any amount due under this Article, his bond with the
16Department shall be deemed forfeited, and the Department may
17institute a suit in its own name on such bond.
18    After notice and opportunity for a hearing the State
19Commission may revoke or suspend the license of any
20manufacturer or importing distributor who fails to comply with
21the provisions of this Section. Notice of such hearing and the
22time and place thereof shall be in writing and shall contain a
23statement of the charges against the licensee. Such notice may
24be given by United States registered or certified mail with
25return receipt requested, addressed to the person concerned at
26his last known address and shall be given not less than 7 days

 

 

HB4300- 616 -LRB099 14379 HLH 38474 b

1prior to the date fixed for the hearing. An order revoking or
2suspending a license under the provisions of this Section may
3be reviewed in the manner provided in Section 7-10 of this Act.
4No new license shall be granted to a person whose license has
5been revoked for a violation of this Section or, in case of
6suspension, shall such suspension be terminated until he has
7paid to the Department all taxes and penalties which he owes
8the State under the provisions of this Act.
9    Every manufacturer or importing distributor who has, as
10verified by the Department, continuously complied with the
11conditions of the bond under this Act for a period of 2 years
12shall be considered to be a prior continuous compliance
13taxpayer. In determining the consecutive period of time for
14qualification as a prior continuous compliance taxpayer, any
15consecutive period of time of qualifying compliance
16immediately prior to the effective date of this amendatory Act
17of 1987 shall be credited to any manufacturer or importing
18distributor.
19    A manufacturer or importing distributor that is a prior
20continuous compliance taxpayer under this Section and becomes a
21successor as the result of an acquisition, merger, or
22consolidation of a manufacturer or importing distributor shall
23be deemed to be a prior continuous compliance taxpayer with
24respect to the acquired, merged, or consolidated entity.
25    Every prior continuous compliance taxpayer shall be exempt
26from the bond requirements of this Act until the Department has

 

 

HB4300- 617 -LRB099 14379 HLH 38474 b

1determined the taxpayer to be delinquent in the filing of any
2return or deficient in the payment of any tax under this Act.
3Any taxpayer who fails to pay an admitted or established
4liability under this Act may also be required to post bond or
5other acceptable security with the Department guaranteeing the
6payment of such admitted or established liability.
7    The Department shall discharge any surety and shall release
8and return any bond or security deposit assigned, pledged or
9otherwise provided to it by a taxpayer under this Section
10within 30 days after: (1) such taxpayer becomes a prior
11continuous compliance taxpayer; or (2) such taxpayer has ceased
12to collect receipts on which he is required to remit tax to the
13Department, has filed a final tax return, and has paid to the
14Department an amount sufficient to discharge his remaining tax
15liability as determined by the Department under this Act.
16(Source: P.A. 95-769, eff. 7-29-08.)
 
17
ARTICLE 55. USE AND OCCUPATION TAX; NEWSPRINT

 
18    Section 55-5. The Use Tax Act is amended by changing
19Section 2 as follows:
 
20    (35 ILCS 105/2)  (from Ch. 120, par. 439.2)
21    Sec. 2. Definitions.
22    "Use" means the exercise by any person of any right or
23power over tangible personal property incident to the ownership

 

 

HB4300- 618 -LRB099 14379 HLH 38474 b

1of that property, except that it does not include the sale of
2such property in any form as tangible personal property in the
3regular course of business to the extent that such property is
4not first subjected to a use for which it was purchased, and
5does not include the use of such property by its owner for
6demonstration purposes: Provided that the property purchased
7is deemed to be purchased for the purpose of resale, despite
8first being used, to the extent to which it is resold as an
9ingredient of an intentionally produced product or by-product
10of manufacturing. "Use" does not mean the demonstration use or
11interim use of tangible personal property by a retailer before
12he sells that tangible personal property. For watercraft or
13aircraft, if the period of demonstration use or interim use by
14the retailer exceeds 18 months, the retailer shall pay on the
15retailers' original cost price the tax imposed by this Act, and
16no credit for that tax is permitted if the watercraft or
17aircraft is subsequently sold by the retailer. "Use" does not
18mean the physical incorporation of tangible personal property,
19to the extent not first subjected to a use for which it was
20purchased, as an ingredient or constituent, into other tangible
21personal property (a) which is sold in the regular course of
22business or (b) which the person incorporating such ingredient
23or constituent therein has undertaken at the time of such
24purchase to cause to be transported in interstate commerce to
25destinations outside the State of Illinois: Provided that the
26property purchased is deemed to be purchased for the purpose of

 

 

HB4300- 619 -LRB099 14379 HLH 38474 b

1resale, despite first being used, to the extent to which it is
2resold as an ingredient of an intentionally produced product or
3by-product of manufacturing.
4    "Watercraft" means a Class 2, Class 3, or Class 4
5watercraft as defined in Section 3-2 of the Boat Registration
6and Safety Act, a personal watercraft, or any boat equipped
7with an inboard motor.
8    "Purchase at retail" means the acquisition of the ownership
9of or title to tangible personal property through a sale at
10retail.
11    "Purchaser" means anyone who, through a sale at retail,
12acquires the ownership of tangible personal property for a
13valuable consideration.
14    "Sale at retail" means any transfer of the ownership of or
15title to tangible personal property to a purchaser, for the
16purpose of use, and not for the purpose of resale in any form
17as tangible personal property to the extent not first subjected
18to a use for which it was purchased, for a valuable
19consideration: Provided that the property purchased is deemed
20to be purchased for the purpose of resale, despite first being
21used, to the extent to which it is resold as an ingredient of
22an intentionally produced product or by-product of
23manufacturing. For this purpose, slag produced as an incident
24to manufacturing pig iron or steel and sold is considered to be
25an intentionally produced by-product of manufacturing. "Sale
26at retail" includes any such transfer made for resale unless

 

 

HB4300- 620 -LRB099 14379 HLH 38474 b

1made in compliance with Section 2c of the Retailers' Occupation
2Tax Act, as incorporated by reference into Section 12 of this
3Act. Transactions whereby the possession of the property is
4transferred but the seller retains the title as security for
5payment of the selling price are sales.
6    "Sale at retail" shall also be construed to include any
7Illinois florist's sales transaction in which the purchase
8order is received in Illinois by a florist and the sale is for
9use or consumption, but the Illinois florist has a florist in
10another state deliver the property to the purchaser or the
11purchaser's donee in such other state.
12    Nonreusable tangible personal property that is used by
13persons engaged in the business of operating a restaurant,
14cafeteria, or drive-in is a sale for resale when it is
15transferred to customers in the ordinary course of business as
16part of the sale of food or beverages and is used to deliver,
17package, or consume food or beverages, regardless of where
18consumption of the food or beverages occurs. Examples of those
19items include, but are not limited to nonreusable, paper and
20plastic cups, plates, baskets, boxes, sleeves, buckets or other
21containers, utensils, straws, placemats, napkins, doggie bags,
22and wrapping or packaging materials that are transferred to
23customers as part of the sale of food or beverages in the
24ordinary course of business.
25    Until July 1, 2016, the The purchase, employment and
26transfer of such tangible personal property as newsprint and

 

 

HB4300- 621 -LRB099 14379 HLH 38474 b

1ink for the primary purpose of conveying news (with or without
2other information) is not a purchase, use or sale of tangible
3personal property.
4    "Selling price" means the consideration for a sale valued
5in money whether received in money or otherwise, including
6cash, credits, property other than as hereinafter provided, and
7services, but not including the value of or credit given for
8traded-in tangible personal property where the item that is
9traded-in is of like kind and character as that which is being
10sold, and shall be determined without any deduction on account
11of the cost of the property sold, the cost of materials used,
12labor or service cost or any other expense whatsoever, but does
13not include interest or finance charges which appear as
14separate items on the bill of sale or sales contract nor
15charges that are added to prices by sellers on account of the
16seller's tax liability under the "Retailers' Occupation Tax
17Act", or on account of the seller's duty to collect, from the
18purchaser, the tax that is imposed by this Act, or, except as
19otherwise provided with respect to any cigarette tax imposed by
20a home rule unit, on account of the seller's tax liability
21under any local occupation tax administered by the Department,
22or, except as otherwise provided with respect to any cigarette
23tax imposed by a home rule unit on account of the seller's duty
24to collect, from the purchasers, the tax that is imposed under
25any local use tax administered by the Department. Effective
26December 1, 1985, "selling price" shall include charges that

 

 

HB4300- 622 -LRB099 14379 HLH 38474 b

1are added to prices by sellers on account of the seller's tax
2liability under the Cigarette Tax Act, on account of the
3seller's duty to collect, from the purchaser, the tax imposed
4under the Cigarette Use Tax Act, and on account of the seller's
5duty to collect, from the purchaser, any cigarette tax imposed
6by a home rule unit.
7    Notwithstanding any law to the contrary, for any motor
8vehicle, as defined in Section 1-146 of the Vehicle Code, that
9is sold on or after January 1, 2015 for the purpose of leasing
10the vehicle for a defined period that is longer than one year
11and (1) is a motor vehicle of the second division that: (A) is
12a self-contained motor vehicle designed or permanently
13converted to provide living quarters for recreational,
14camping, or travel use, with direct walk through access to the
15living quarters from the driver's seat; (B) is of the van
16configuration designed for the transportation of not less than
177 nor more than 16 passengers; or (C) has a gross vehicle
18weight rating of 8,000 pounds or less or (2) is a motor vehicle
19of the first division, "selling price" or "amount of sale"
20means the consideration received by the lessor pursuant to the
21lease contract, including amounts due at lease signing and all
22monthly or other regular payments charged over the term of the
23lease. Also included in the selling price is any amount
24received by the lessor from the lessee for the leased vehicle
25that is not calculated at the time the lease is executed,
26including, but not limited to, excess mileage charges and

 

 

HB4300- 623 -LRB099 14379 HLH 38474 b

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

 

 

HB4300- 624 -LRB099 14379 HLH 38474 b

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

 

 

HB4300- 625 -LRB099 14379 HLH 38474 b

1means in the manner and form as required by the Department.
2This paragraph does not apply to leases of motor vehicles for
3which, at the time the lease is entered into, the term of the
4lease is not a defined period, including leases with a defined
5initial period with the option to continue the lease on a
6month-to-month or other basis beyond the initial defined
7period.
8    The phrase "like kind and character" shall be liberally
9construed (including but not limited to any form of motor
10vehicle for any form of motor vehicle, or any kind of farm or
11agricultural implement for any other kind of farm or
12agricultural implement), while not including a kind of item
13which, if sold at retail by that retailer, would be exempt from
14retailers' occupation tax and use tax as an isolated or
15occasional sale.
16    "Department" means the Department of Revenue.
17    "Person" means any natural individual, firm, partnership,
18association, joint stock company, joint adventure, public or
19private corporation, limited liability company, or a receiver,
20executor, trustee, guardian or other representative appointed
21by order of any court.
22    "Retailer" means and includes every person engaged in the
23business of making sales at retail as defined in this Section.
24    A person who holds himself or herself out as being engaged
25(or who habitually engages) in selling tangible personal
26property at retail is a retailer hereunder with respect to such

 

 

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1sales (and not primarily in a service occupation)
2notwithstanding the fact that such person designs and produces
3such tangible personal property on special order for the
4purchaser and in such a way as to render the property of value
5only to such purchaser, if such tangible personal property so
6produced on special order serves substantially the same
7function as stock or standard items of tangible personal
8property that are sold at retail.
9    A person whose activities are organized and conducted
10primarily as a not-for-profit service enterprise, and who
11engages in selling tangible personal property at retail
12(whether to the public or merely to members and their guests)
13is a retailer with respect to such transactions, excepting only
14a person organized and operated exclusively for charitable,
15religious or educational purposes either (1), to the extent of
16sales by such person to its members, students, patients or
17inmates of tangible personal property to be used primarily for
18the purposes of such person, or (2), to the extent of sales by
19such person of tangible personal property which is not sold or
20offered for sale by persons organized for profit. The selling
21of school books and school supplies by schools at retail to
22students is not "primarily for the purposes of" the school
23which does such selling. This paragraph does not apply to nor
24subject to taxation occasional dinners, social or similar
25activities of a person organized and operated exclusively for
26charitable, religious or educational purposes, whether or not

 

 

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1such activities are open to the public.
2    A person who is the recipient of a grant or contract under
3Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
4serves meals to participants in the federal Nutrition Program
5for the Elderly in return for contributions established in
6amount by the individual participant pursuant to a schedule of
7suggested fees as provided for in the federal Act is not a
8retailer under this Act with respect to such transactions.
9    Persons who engage in the business of transferring tangible
10personal property upon the redemption of trading stamps are
11retailers hereunder when engaged in such business.
12    The isolated or occasional sale of tangible personal
13property at retail by a person who does not hold himself out as
14being engaged (or who does not habitually engage) in selling
15such tangible personal property at retail or a sale through a
16bulk vending machine does not make such person a retailer
17hereunder. However, any person who is engaged in a business
18which is not subject to the tax imposed by the "Retailers'
19Occupation Tax Act" because of involving the sale of or a
20contract to sell real estate or a construction contract to
21improve real estate, but who, in the course of conducting such
22business, transfers tangible personal property to users or
23consumers in the finished form in which it was purchased, and
24which does not become real estate, under any provision of a
25construction contract or real estate sale or real estate sales
26agreement entered into with some other person arising out of or

 

 

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1because of such nontaxable business, is a retailer to the
2extent of the value of the tangible personal property so
3transferred. If, in such transaction, a separate charge is made
4for the tangible personal property so transferred, the value of
5such property, for the purposes of this Act, is the amount so
6separately charged, but not less than the cost of such property
7to the transferor; if no separate charge is made, the value of
8such property, for the purposes of this Act, is the cost to the
9transferor of such tangible personal property.
10    "Retailer maintaining a place of business in this State",
11or any like term, means and includes any of the following
12retailers:
13        1. A retailer having or maintaining within this State,
14    directly or by a subsidiary, an office, distribution house,
15    sales house, warehouse or other place of business, or any
16    agent or other representative operating within this State
17    under the authority of the retailer or its subsidiary,
18    irrespective of whether such place of business or agent or
19    other representative is located here permanently or
20    temporarily, or whether such retailer or subsidiary is
21    licensed to do business in this State. However, the
22    ownership of property that is located at the premises of a
23    printer with which the retailer has contracted for printing
24    and that consists of the final printed product, property
25    that becomes a part of the final printed product, or copy
26    from which the printed product is produced shall not result

 

 

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1    in the retailer being deemed to have or maintain an office,
2    distribution house, sales house, warehouse, or other place
3    of business within this State.
4        1.1. A retailer having a contract with a person located
5    in this State under which the person, for a commission or
6    other consideration based upon the sale of tangible
7    personal property by the retailer, directly or indirectly
8    refers potential customers to the retailer by providing to
9    the potential customers a promotional code or other
10    mechanism that allows the retailer to track purchases
11    referred by such persons. Examples of mechanisms that allow
12    the retailer to track purchases referred by such persons
13    include but are not limited to the use of a link on the
14    person's Internet website, promotional codes distributed
15    through the person's hand-delivered or mailed material,
16    and promotional codes distributed by the person through
17    radio or other broadcast media. The provisions of this
18    paragraph 1.1 shall apply only if the cumulative gross
19    receipts from sales of tangible personal property by the
20    retailer to customers who are referred to the retailer by
21    all persons in this State under such contracts exceed
22    $10,000 during the preceding 4 quarterly periods ending on
23    the last day of March, June, September, and December. A
24    retailer meeting the requirements of this paragraph 1.1
25    shall be presumed to be maintaining a place of business in
26    this State but may rebut this presumption by submitting

 

 

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1    proof that the referrals or other activities pursued within
2    this State by such persons were not sufficient to meet the
3    nexus standards of the United States Constitution during
4    the preceding 4 quarterly periods.
5        1.2. Beginning July 1, 2011, a retailer having a
6    contract with a person located in this State under which:
7            A. the retailer sells the same or substantially
8        similar line of products as the person located in this
9        State and does so using an identical or substantially
10        similar name, trade name, or trademark as the person
11        located in this State; and
12            B. the retailer provides a commission or other
13        consideration to the person located in this State based
14        upon the sale of tangible personal property by the
15        retailer.
16    The provisions of this paragraph 1.2 shall apply only if
17    the cumulative gross receipts from sales of tangible
18    personal property by the retailer to customers in this
19    State under all such contracts exceed $10,000 during the
20    preceding 4 quarterly periods ending on the last day of
21    March, June, September, and December.
22        2. A retailer soliciting orders for tangible personal
23    property by means of a telecommunication or television
24    shopping system (which utilizes toll free numbers) which is
25    intended by the retailer to be broadcast by cable
26    television or other means of broadcasting, to consumers

 

 

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1    located in this State.
2        3. A retailer, pursuant to a contract with a
3    broadcaster or publisher located in this State, soliciting
4    orders for tangible personal property by means of
5    advertising which is disseminated primarily to consumers
6    located in this State and only secondarily to bordering
7    jurisdictions.
8        4. A retailer soliciting orders for tangible personal
9    property by mail if the solicitations are substantial and
10    recurring and if the retailer benefits from any banking,
11    financing, debt collection, telecommunication, or
12    marketing activities occurring in this State or benefits
13    from the location in this State of authorized installation,
14    servicing, or repair facilities.
15        5. A retailer that is owned or controlled by the same
16    interests that own or control any retailer engaging in
17    business in the same or similar line of business in this
18    State.
19        6. A retailer having a franchisee or licensee operating
20    under its trade name if the franchisee or licensee is
21    required to collect the tax under this Section.
22        7. A retailer, pursuant to a contract with a cable
23    television operator located in this State, soliciting
24    orders for tangible personal property by means of
25    advertising which is transmitted or distributed over a
26    cable television system in this State.

 

 

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1        8. A retailer engaging in activities in Illinois, which
2    activities in the state in which the retail business
3    engaging in such activities is located would constitute
4    maintaining a place of business in that state.
5    "Bulk vending machine" means a vending machine, containing
6unsorted confections, nuts, toys, or other items designed
7primarily to be used or played with by children which, when a
8coin or coins of a denomination not larger than $0.50 are
9inserted, are dispensed in equal portions, at random and
10without selection by the customer.
11(Source: P.A. 98-628, eff. 1-1-15; 98-1080, eff. 8-26-14;
1298-1089, eff. 1-1-15; 99-78, eff. 7-20-15.)
 
13    Section 55-10. The Service Use Tax Act is amended by
14changing Section 2 as follows:
 
15    (35 ILCS 110/2)  (from Ch. 120, par. 439.32)
16    Sec. 2. Definitions.
17    "Use" means the exercise by any person of any right or
18power over tangible personal property incident to the ownership
19of that property, but does not include the sale or use for
20demonstration by him of that property in any form as tangible
21personal property in the regular course of business. "Use" does
22not mean the interim use of tangible personal property nor the
23physical incorporation of tangible personal property, as an
24ingredient or constituent, into other tangible personal

 

 

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1property, (a) which is sold in the regular course of business
2or (b) which the person incorporating such ingredient or
3constituent therein has undertaken at the time of such purchase
4to cause to be transported in interstate commerce to
5destinations outside the State of Illinois.
6    "Purchased from a serviceman" means the acquisition of the
7ownership of, or title to, tangible personal property through a
8sale of service.
9    "Purchaser" means any person who, through a sale of
10service, acquires the ownership of, or title to, any tangible
11personal property.
12    "Cost price" means the consideration paid by the serviceman
13for a purchase valued in money, whether paid in money or
14otherwise, including cash, credits and services, and shall be
15determined without any deduction on account of the supplier's
16cost of the property sold or on account of any other expense
17incurred by the supplier. When a serviceman contracts out part
18or all of the services required in his sale of service, it
19shall be presumed that the cost price to the serviceman of the
20property transferred to him or her by his or her subcontractor
21is equal to 50% of the subcontractor's charges to the
22serviceman in the absence of proof of the consideration paid by
23the subcontractor for the purchase of such property.
24    "Selling price" means the consideration for a sale valued
25in money whether received in money or otherwise, including
26cash, credits and service, and shall be determined without any

 

 

HB4300- 634 -LRB099 14379 HLH 38474 b

1deduction on account of the serviceman's cost of the property
2sold, the cost of materials used, labor or service cost or any
3other expense whatsoever, but does not include interest or
4finance charges which appear as separate items on the bill of
5sale or sales contract nor charges that are added to prices by
6sellers on account of the seller's duty to collect, from the
7purchaser, the tax that is imposed by this Act.
8    "Department" means the Department of Revenue.
9    "Person" means any natural individual, firm, partnership,
10association, joint stock company, joint venture, public or
11private corporation, limited liability company, and any
12receiver, executor, trustee, guardian or other representative
13appointed by order of any court.
14    "Sale of service" means any transaction except:
15        (1) a retail sale of tangible personal property taxable
16    under the Retailers' Occupation Tax Act or under the Use
17    Tax Act.
18        (2) a sale of tangible personal property for the
19    purpose of resale made in compliance with Section 2c of the
20    Retailers' Occupation Tax Act.
21        (3) except as hereinafter provided, a sale or transfer
22    of tangible personal property as an incident to the
23    rendering of service for or by any governmental body, or
24    for or by any corporation, society, association,
25    foundation or institution organized and operated
26    exclusively for charitable, religious or educational

 

 

HB4300- 635 -LRB099 14379 HLH 38474 b

1    purposes or any not-for-profit corporation, society,
2    association, foundation, institution or organization which
3    has no compensated officers or employees and which is
4    organized and operated primarily for the recreation of
5    persons 55 years of age or older. A limited liability
6    company may qualify for the exemption under this paragraph
7    only if the limited liability company is organized and
8    operated exclusively for educational purposes.
9        (4) a sale or transfer of tangible personal property as
10    an incident to the rendering of service for interstate
11    carriers for hire for use as rolling stock moving in
12    interstate commerce or by lessors under a lease of one year
13    or longer, executed or in effect at the time of purchase of
14    personal property, to interstate carriers for hire for use
15    as rolling stock moving in interstate commerce so long as
16    so used by such interstate carriers for hire, and equipment
17    operated by a telecommunications provider, licensed as a
18    common carrier by the Federal Communications Commission,
19    which is permanently installed in or affixed to aircraft
20    moving in interstate commerce.
21        (4a) a sale or transfer of tangible personal property
22    as an incident to the rendering of service for owners,
23    lessors, or shippers of tangible personal property which is
24    utilized by interstate carriers for hire for use as rolling
25    stock moving in interstate commerce so long as so used by
26    interstate carriers for hire, and equipment operated by a

 

 

HB4300- 636 -LRB099 14379 HLH 38474 b

1    telecommunications provider, licensed as a common carrier
2    by the Federal Communications Commission, which is
3    permanently installed in or affixed to aircraft moving in
4    interstate commerce.
5        (4a-5) on and after July 1, 2003 and through June 30,
6    2004, a sale or transfer of a motor vehicle of the second
7    division with a gross vehicle weight in excess of 8,000
8    pounds as an incident to the rendering of service if that
9    motor vehicle is subject to the commercial distribution fee
10    imposed under Section 3-815.1 of the Illinois Vehicle Code.
11    Beginning on July 1, 2004 and through June 30, 2005, the
12    use in this State of motor vehicles of the second division:
13    (i) with a gross vehicle weight rating in excess of 8,000
14    pounds; (ii) that are subject to the commercial
15    distribution fee imposed under Section 3-815.1 of the
16    Illinois Vehicle Code; and (iii) that are primarily used
17    for commercial purposes. Through June 30, 2005, this
18    exemption applies to repair and replacement parts added
19    after the initial purchase of such a motor vehicle if that
20    motor vehicle is used in a manner that would qualify for
21    the rolling stock exemption otherwise provided for in this
22    Act. For purposes of this paragraph, "used for commercial
23    purposes" means the transportation of persons or property
24    in furtherance of any commercial or industrial enterprise
25    whether for-hire or not.
26        (5) a sale or transfer of machinery and equipment used

 

 

HB4300- 637 -LRB099 14379 HLH 38474 b

1    primarily in the process of the manufacturing or
2    assembling, either in an existing, an expanded or a new
3    manufacturing facility, of tangible personal property for
4    wholesale or retail sale or lease, whether such sale or
5    lease is made directly by the manufacturer or by some other
6    person, whether the materials used in the process are owned
7    by the manufacturer or some other person, or whether such
8    sale or lease is made apart from or as an incident to the
9    seller's engaging in a service occupation and the
10    applicable tax is a Service Use Tax or Service Occupation
11    Tax, rather than Use Tax or Retailers' Occupation Tax. The
12    exemption provided by this paragraph (5) does not include
13    machinery and equipment used in (i) the generation of
14    electricity for wholesale or retail sale; (ii) the
15    generation or treatment of natural or artificial gas for
16    wholesale or retail sale that is delivered to customers
17    through pipes, pipelines, or mains; or (iii) the treatment
18    of water for wholesale or retail sale that is delivered to
19    customers through pipes, pipelines, or mains. The
20    provisions of this amendatory Act of the 98th General
21    Assembly are declaratory of existing law as to the meaning
22    and scope of this exemption.
23        (5a) the repairing, reconditioning or remodeling, for
24    a common carrier by rail, of tangible personal property
25    which belongs to such carrier for hire, and as to which
26    such carrier receives the physical possession of the

 

 

HB4300- 638 -LRB099 14379 HLH 38474 b

1    repaired, reconditioned or remodeled item of tangible
2    personal property in Illinois, and which such carrier
3    transports, or shares with another common carrier in the
4    transportation of such property, out of Illinois on a
5    standard uniform bill of lading showing the person who
6    repaired, reconditioned or remodeled the property to a
7    destination outside Illinois, for use outside Illinois.
8        (5b) a sale or transfer of tangible personal property
9    which is produced by the seller thereof on special order in
10    such a way as to have made the applicable tax the Service
11    Occupation Tax or the Service Use Tax, rather than the
12    Retailers' Occupation Tax or the Use Tax, for an interstate
13    carrier by rail which receives the physical possession of
14    such property in Illinois, and which transports such
15    property, or shares with another common carrier in the
16    transportation of such property, out of Illinois on a
17    standard uniform bill of lading showing the seller of the
18    property as the shipper or consignor of such property to a
19    destination outside Illinois, for use outside Illinois.
20        (6) until July 1, 2003, a sale or transfer of
21    distillation machinery and equipment, sold as a unit or kit
22    and assembled or installed by the retailer, which machinery
23    and equipment is certified by the user to be used only for
24    the production of ethyl alcohol that will be used for
25    consumption as motor fuel or as a component of motor fuel
26    for the personal use of such user and not subject to sale

 

 

HB4300- 639 -LRB099 14379 HLH 38474 b

1    or resale.
2        (7) at the election of any serviceman not required to
3    be otherwise registered as a retailer under Section 2a of
4    the Retailers' Occupation Tax Act, made for each fiscal
5    year sales of service in which the aggregate annual cost
6    price of tangible personal property transferred as an
7    incident to the sales of service is less than 35%, or 75%
8    in the case of servicemen transferring prescription drugs
9    or servicemen engaged in graphic arts production, of the
10    aggregate annual total gross receipts from all sales of
11    service. The purchase of such tangible personal property by
12    the serviceman shall be subject to tax under the Retailers'
13    Occupation Tax Act and the Use Tax Act. However, if a
14    primary serviceman who has made the election described in
15    this paragraph subcontracts service work to a secondary
16    serviceman who has also made the election described in this
17    paragraph, the primary serviceman does not incur a Use Tax
18    liability if the secondary serviceman (i) has paid or will
19    pay Use Tax on his or her cost price of any tangible
20    personal property transferred to the primary serviceman
21    and (ii) certifies that fact in writing to the primary
22    serviceman.
23    Tangible personal property transferred incident to the
24completion of a maintenance agreement is exempt from the tax
25imposed pursuant to this Act.
26    Exemption (5) also includes machinery and equipment used in

 

 

HB4300- 640 -LRB099 14379 HLH 38474 b

1the general maintenance or repair of such exempt machinery and
2equipment or for in-house manufacture of exempt machinery and
3equipment. The machinery and equipment exemption does not
4include machinery and equipment used in (i) the generation of
5electricity for wholesale or retail sale; (ii) the generation
6or treatment of natural or artificial gas for wholesale or
7retail sale that is delivered to customers through pipes,
8pipelines, or mains; or (iii) the treatment of water for
9wholesale or retail sale that is delivered to customers through
10pipes, pipelines, or mains. The provisions of this amendatory
11Act of the 98th General Assembly are declaratory of existing
12law as to the meaning and scope of this exemption. For the
13purposes of exemption (5), each of these terms shall have the
14following meanings: (1) "manufacturing process" shall mean the
15production of any article of tangible personal property,
16whether such article is a finished product or an article for
17use in the process of manufacturing or assembling a different
18article of tangible personal property, by procedures commonly
19regarded as manufacturing, processing, fabricating, or
20refining which changes some existing material or materials into
21a material with a different form, use or name. In relation to a
22recognized integrated business composed of a series of
23operations which collectively constitute manufacturing, or
24individually constitute manufacturing operations, the
25manufacturing process shall be deemed to commence with the
26first operation or stage of production in the series, and shall

 

 

HB4300- 641 -LRB099 14379 HLH 38474 b

1not be deemed to end until the completion of the final product
2in the last operation or stage of production in the series; and
3further, for purposes of exemption (5), photoprocessing is
4deemed to be a manufacturing process of tangible personal
5property for wholesale or retail sale; (2) "assembling process"
6shall mean the production of any article of tangible personal
7property, whether such article is a finished product or an
8article for use in the process of manufacturing or assembling a
9different article of tangible personal property, by the
10combination of existing materials in a manner commonly regarded
11as assembling which results in a material of a different form,
12use or name; (3) "machinery" shall mean major mechanical
13machines or major components of such machines contributing to a
14manufacturing or assembling process; and (4) "equipment" shall
15include any independent device or tool separate from any
16machinery but essential to an integrated manufacturing or
17assembly process; including computers used primarily in a
18manufacturer's computer assisted design, computer assisted
19manufacturing (CAD/CAM) system; or any subunit or assembly
20comprising a component of any machinery or auxiliary, adjunct
21or attachment parts of machinery, such as tools, dies, jigs,
22fixtures, patterns and molds; or any parts which require
23periodic replacement in the course of normal operation; but
24shall not include hand tools. Equipment includes chemicals or
25chemicals acting as catalysts but only if the chemicals or
26chemicals acting as catalysts effect a direct and immediate

 

 

HB4300- 642 -LRB099 14379 HLH 38474 b

1change upon a product being manufactured or assembled for
2wholesale or retail sale or lease. The purchaser of such
3machinery and equipment who has an active resale registration
4number shall furnish such number to the seller at the time of
5purchase. The user of such machinery and equipment and tools
6without an active resale registration number shall prepare a
7certificate of exemption for each transaction stating facts
8establishing the exemption for that transaction, which
9certificate shall be available to the Department for inspection
10or audit. The Department shall prescribe the form of the
11certificate.
12    Any informal rulings, opinions or letters issued by the
13Department in response to an inquiry or request for any opinion
14from any person regarding the coverage and applicability of
15exemption (5) to specific devices shall be published,
16maintained as a public record, and made available for public
17inspection and copying. If the informal ruling, opinion or
18letter contains trade secrets or other confidential
19information, where possible the Department shall delete such
20information prior to publication. Whenever such informal
21rulings, opinions, or letters contain any policy of general
22applicability, the Department shall formulate and adopt such
23policy as a rule in accordance with the provisions of the
24Illinois Administrative Procedure Act.
25    On and after July 1, 1987, no entity otherwise eligible
26under exemption (3) of this Section shall make tax free

 

 

HB4300- 643 -LRB099 14379 HLH 38474 b

1purchases unless it has an active exemption identification
2number issued by the Department.
3    Until July 1, 2016, the The purchase, employment and
4transfer of such tangible personal property as newsprint and
5ink for the primary purpose of conveying news (with or without
6other information) is not a purchase, use or sale of service or
7of tangible personal property within the meaning of this Act.
8    "Serviceman" means any person who is engaged in the
9occupation of making sales of service.
10    "Sale at retail" means "sale at retail" as defined in the
11Retailers' Occupation Tax Act.
12    "Supplier" means any person who makes sales of tangible
13personal property to servicemen for the purpose of resale as an
14incident to a sale of service.
15    "Serviceman maintaining a place of business in this State",
16or any like term, means and includes any serviceman:
17        1. having or maintaining within this State, directly or
18    by a subsidiary, an office, distribution house, sales
19    house, warehouse or other place of business, or any agent
20    or other representative operating within this State under
21    the authority of the serviceman or its subsidiary,
22    irrespective of whether such place of business or agent or
23    other representative is located here permanently or
24    temporarily, or whether such serviceman or subsidiary is
25    licensed to do business in this State;
26        1.1. having a contract with a person located in this

 

 

HB4300- 644 -LRB099 14379 HLH 38474 b

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

 

 

HB4300- 645 -LRB099 14379 HLH 38474 b

1        1.2. beginning July 1, 2011, having a contract with a
2    person located in this State under which:
3            A. the serviceman sells the same or substantially
4        similar line of services as the person located in this
5        State and does so using an identical or substantially
6        similar name, trade name, or trademark as the person
7        located in this State; and
8            B. the serviceman provides a commission or other
9        consideration to the person located in this State based
10        upon the sale of services by the serviceman.
11    The provisions of this paragraph 1.2 shall apply only if
12    the cumulative gross receipts from sales of service by the
13    serviceman to customers in this State under all such
14    contracts exceed $10,000 during the preceding 4 quarterly
15    periods ending on the last day of March, June, September,
16    and December;
17        2. soliciting orders for tangible personal property by
18    means of a telecommunication or television shopping system
19    (which utilizes toll free numbers) which is intended by the
20    retailer to be broadcast by cable television or other means
21    of broadcasting, to consumers located in this State;
22        3. pursuant to a contract with a broadcaster or
23    publisher located in this State, soliciting orders for
24    tangible personal property by means of advertising which is
25    disseminated primarily to consumers located in this State
26    and only secondarily to bordering jurisdictions;

 

 

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1        4. soliciting orders for tangible personal property by
2    mail if the solicitations are substantial and recurring and
3    if the retailer benefits from any banking, financing, debt
4    collection, telecommunication, or marketing activities
5    occurring in this State or benefits from the location in
6    this State of authorized installation, servicing, or
7    repair facilities;
8        5. being owned or controlled by the same interests
9    which own or control any retailer engaging in business in
10    the same or similar line of business in this State;
11        6. having a franchisee or licensee operating under its
12    trade name if the franchisee or licensee is required to
13    collect the tax under this Section;
14        7. pursuant to a contract with a cable television
15    operator located in this State, soliciting orders for
16    tangible personal property by means of advertising which is
17    transmitted or distributed over a cable television system
18    in this State; or
19        8. engaging in activities in Illinois, which
20    activities in the state in which the supply business
21    engaging in such activities is located would constitute
22    maintaining a place of business in that state.
23(Source: P.A. 98-583, eff. 1-1-14; 98-1089, eff. 1-1-15.)
 
24    Section 55-15. The Retailers' Occupation Tax Act is amended
25by changing Section 1 as follows:
 

 

 

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

 

 

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

 

 

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1customers as part of the sale of food or beverages in the
2ordinary course of business.
3    Until July 1, 2016, the The purchase, employment and
4transfer of such tangible personal property as newsprint and
5ink for the primary purpose of conveying news (with or without
6other information) is not a purchase, use or sale of tangible
7personal 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

 

 

HB4300- 650 -LRB099 14379 HLH 38474 b

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 not including
24the value of or credit given for traded-in tangible personal
25property where the item that is traded-in is of like kind and
26character as that which is being sold, and shall be determined

 

 

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1without any deduction on account of the cost of the property
2sold, the cost of materials used, labor or service cost or any
3other expense whatsoever, but does not include charges that are
4added to prices by sellers on account of the seller's tax
5liability under this Act, or on account of the seller's duty to
6collect, from the purchaser, the tax that is imposed by the Use
7Tax Act, or, except as otherwise provided with respect to any
8cigarette tax imposed by a home rule unit, on account of the
9seller's tax liability under any local occupation tax
10administered by the Department, or, except as otherwise
11provided with respect to any cigarette tax imposed by a home
12rule unit on account of the seller's duty to collect, from the
13purchasers, the tax that is imposed under any local use tax
14administered by the Department. Effective December 1, 1985,
15"selling price" shall include charges that are added to prices
16by sellers on account of the seller's tax liability under the
17Cigarette Tax Act, on account of the sellers' duty to collect,
18from the purchaser, the tax imposed under the Cigarette Use Tax
19Act, and on account of the seller's duty to collect, from the
20purchaser, any cigarette tax imposed by a home rule unit.
21    Notwithstanding any law to the contrary, for any motor
22vehicle, as defined in Section 1-146 of the Vehicle Code, that
23is sold on or after January 1, 2015 for the purpose of leasing
24the vehicle for a defined period that is longer than one year
25and (1) is a motor vehicle of the second division that: (A) is
26a self-contained motor vehicle designed or permanently

 

 

HB4300- 652 -LRB099 14379 HLH 38474 b

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

 

 

HB4300- 653 -LRB099 14379 HLH 38474 b

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

 

 

HB4300- 654 -LRB099 14379 HLH 38474 b

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

 

 

HB4300- 655 -LRB099 14379 HLH 38474 b

1retailers' occupation tax and use tax as an isolated or
2occasional sale.
3    "Gross receipts" from the sales of tangible personal
4property at retail means the total selling price or the amount
5of such sales, as hereinbefore defined. In the case of charge
6and time sales, the amount thereof shall be included only as
7and when payments are received by the seller. Receipts or other
8consideration derived by a seller from the sale, transfer or
9assignment of accounts receivable to a wholly owned subsidiary
10will not be deemed payments prior to the time the purchaser
11makes payment on such accounts.
12    "Department" means the Department of Revenue.
13    "Person" means any natural individual, firm, partnership,
14association, joint stock company, joint adventure, public or
15private corporation, limited liability company, or a receiver,
16executor, trustee, guardian or other representative appointed
17by order of any court.
18    The isolated or occasional sale of tangible personal
19property at retail by a person who does not hold himself out as
20being engaged (or who does not habitually engage) in selling
21such tangible personal property at retail, or a sale through a
22bulk vending machine, does not constitute engaging in a
23business of selling such tangible personal property at retail
24within the meaning of this Act; provided that any person who is
25engaged in a business which is not subject to the tax imposed
26by this Act because of involving the sale of or a contract to

 

 

HB4300- 656 -LRB099 14379 HLH 38474 b

1sell real estate or a construction contract to improve real
2estate or a construction contract to engineer, install, and
3maintain an integrated system of products, but who, in the
4course of conducting such business, transfers tangible
5personal property to users or consumers in the finished form in
6which it was purchased, and which does not become real estate
7or was not engineered and installed, under any provision of a
8construction contract or real estate sale or real estate sales
9agreement entered into with some other person arising out of or
10because of such nontaxable business, is engaged in the business
11of selling tangible personal property at retail to the extent
12of the value of the tangible personal property so transferred.
13If, in such a transaction, a separate charge is made for the
14tangible personal property so transferred, the value of such
15property, for the purpose of this Act, shall be the amount so
16separately charged, but not less than the cost of such property
17to the transferor; if no separate charge is made, the value of
18such property, for the purposes of this Act, is the cost to the
19transferor of such tangible personal property. Construction
20contracts for the improvement of real estate consisting of
21engineering, installation, and maintenance of voice, data,
22video, security, and all telecommunication systems do not
23constitute engaging in a business of selling tangible personal
24property at retail within the meaning of this Act if they are
25sold at one specified contract price.
26    A person who holds himself or herself out as being engaged

 

 

HB4300- 657 -LRB099 14379 HLH 38474 b

1(or who habitually engages) in selling tangible personal
2property at retail is a person engaged in the business of
3selling tangible personal property at retail hereunder with
4respect to such sales (and not primarily in a service
5occupation) notwithstanding the fact that such person designs
6and produces such tangible personal property on special order
7for the purchaser and in such a way as to render the property
8of value only to such purchaser, if such tangible personal
9property so produced on special order serves substantially the
10same function as stock or standard items of tangible personal
11property that are sold at retail.
12    Persons who engage in the business of transferring tangible
13personal property upon the redemption of trading stamps are
14engaged in the business of selling such property at retail and
15shall be liable for and shall pay the tax imposed by this Act
16on the basis of the retail value of the property transferred
17upon redemption of such stamps.
18    "Bulk vending machine" means a vending machine, containing
19unsorted confections, nuts, toys, or other items designed
20primarily to be used or played with by children which, when a
21coin or coins of a denomination not larger than $0.50 are
22inserted, are dispensed in equal portions, at random and
23without selection by the customer.
24(Source: P.A. 98-628, eff. 1-1-15; 98-1080, eff. 8-26-14.)
 
25
ARTICLE 60. HOTEL OPERATORS' OCCUPATION TAX

 

 

 

HB4300- 658 -LRB099 14379 HLH 38474 b

1    Section 60-5. The Hotel Operators' Occupation Tax Act is
2amended by changing Section 2 as follows:
 
3    (35 ILCS 145/2)  (from Ch. 120, par. 481b.32)
4    Sec. 2. As used in this Act, unless the context otherwise
5requires:
6        (1) "Hotel" means any building or buildings in which
7    the public may, for a consideration, obtain living
8    quarters, sleeping or housekeeping accommodations. The
9    term includes inns, motels, tourist homes or courts,
10    lodging houses, rooming houses and apartment houses.
11        (2) "Operator" means any person operating a hotel,
12    including, but not limited to, an online travel company
13    that sells hotel rooms to the general public.
14        (3) "Occupancy" means the use or possession, or the
15    right to the use or possession, of any room or rooms in a
16    hotel for any purpose, or the right to the use or
17    possession of the furnishings or to the services and
18    accommodations accompanying the use and possession of the
19    room or rooms.
20        "Online travel company" means a retailer that
21    purchases hotel rooms in the State at a wholesale price and
22    resells those rooms to the general public via an Internet
23    website.
24        (4) "Room" or "rooms" means any living quarters,

 

 

HB4300- 659 -LRB099 14379 HLH 38474 b

1    sleeping or housekeeping accommodations.
2        (5) "Permanent resident" means any person who occupied
3    or has the right to occupy any room or rooms, regardless of
4    whether or not it is the same room or rooms, in a hotel for
5    at least 30 consecutive days.
6        (6) "Rent" or "rental" means the consideration
7    received for occupancy, valued in money, whether received
8    in money or otherwise, including all receipts, cash,
9    credits and property or services of any kind or nature.
10        (7) "Department" means the Department of Revenue.
11        (8) "Person" means any natural individual, firm,
12    partnership, association, joint stock company, joint
13    adventure, public or private corporation, limited
14    liability company, or a receiver, executor, trustee,
15    guardian or other representative appointed by order of any
16    court.
17(Source: P.A. 87-951; 88-480.)
 
18
ARTICLE 65. HOTEL OPERATORS' OCCUPATION TAX

 
19    Section 65-5. The State Finance Act is amended by changing
20Section 12-2 as follows:
 
21    (30 ILCS 105/12-2)  (from Ch. 127, par. 148-2)
22    Sec. 12-2. (a) The chairmen of the travel control boards
23established by Section 12-1, or their designees, shall together

 

 

HB4300- 660 -LRB099 14379 HLH 38474 b

1comprise the Travel Regulation Council. The Travel Regulation
2Council shall be chaired by the Director of Central Management
3Services, who shall be a nonvoting member of the Council,
4unless he is otherwise qualified to vote by virtue of being the
5designee of a voting member. No later than March 1, 1986, and
6at least biennially thereafter, the Council shall adopt State
7Travel Regulations and Reimbursement Rates which shall be
8applicable to all personnel subject to the jurisdiction of the
9travel control boards established by Section 12-1. An
10affirmative vote of a majority of the members of the Council
11shall be required to adopt regulations and reimbursement rates.
12If the Council fails to adopt regulations by March 1 of any
13odd-numbered year, the Director of Central Management Services
14shall adopt emergency regulations and reimbursement rates
15pursuant to the Illinois Administrative Procedure Act.
16    (b) Mileage for automobile travel shall be reimbursed at
17the allowance rate in effect under regulations promulgated
18pursuant to 5 U.S.C. 5707(b)(2). In the event the rate set
19under federal regulations increases or decreases during the
20course of the State's fiscal year, the effective date of the
21new rate shall be the effective date of the change in the
22federal rate.
23    (c) Rates for reimbursement of expenses other than mileage
24shall not exceed the actual cost of travel as determined by the
25United States Internal Revenue Service.
26    (d) Reimbursements to travelers shall be made pursuant to

 

 

HB4300- 661 -LRB099 14379 HLH 38474 b

1the rates and regulations applicable to the respective State
2agency as of the effective date of this amendatory Act, until
3the State Travel Regulations and Reimbursement Rates
4established by this Section are adopted and effective.
5    (e) Lodging in Cook County, Illinois and the District of
6Columbia shall be reimbursed at the maximum lodging rate in
7effect under regulations promulgated pursuant to 5 U.S.C.
85701-5709. For purposes of this subsection (e), the District of
9Columbia shall include the cities and counties included in the
10per diem locality of the District of Columbia, as defined by
11the regulations in effect promulgated pursuant to 5 U.S.C.
125701-5709. Individual travel control boards may set a lodging
13reimbursement rate more restrictive than the rate set forth in
14the federal regulations.
15    (f) Notwithstanding any provisions of law to the contrary,
16all State employees shall receive mileage reimbursement, when
17applicable, at a rate of $0.39 per mile.
18(Source: P.A. 96-240, eff. 1-1-10.)
 
19
ARTICLE 70. FILM PRODUCTION CREDIT

 
20    Section 70-5. The Film Production Services Tax Credit Act
21of 2008 is amended by changing Section 40 as follows:
 
22    (35 ILCS 16/40)
23    Sec. 40. Amount and duration of the credit. The amount of

 

 

HB4300- 662 -LRB099 14379 HLH 38474 b

1the credit awarded under this Act is based on the amount of the
2Illinois labor expenditure and Illinois production spending
3approved by the Department for the production as set forth
4under Section 10. The duration of the credit may not exceed one
5taxable year. Beginning on July 1, 2016, the maximum aggregate
6amount of credits that may be awarded under this Act for all
7taxpayers in any State fiscal year may not exceed $20,000,000.
8(Source: P.A. 95-720, eff. 5-27-08.)
 
9
ARTICLE 75. LOTTERY

 
10    Section 75-5. The Illinois Lottery Law is amended by adding
11Section 7.9 as follows:
 
12    (20 ILCS 1605/7.9 new)
13    Sec. 7.9. Report; increasing revenues. The Department
14shall submit a report to the Governor and the General Assembly
15on or before June 1st of every year on the Department's
16progress towards achieving the following goals:
17        (i) a $1,000,000,000 increase in revenue from the
18    revenue gained in Fiscal Year 2014;
19        (ii) an increase of retailers who sell lottery tickets
20    and other related items to the general public;
21        (iii) more innovating games for a younger audience;
22        (iv) more effective marketing to unreached
23    demographics; and

 

 

HB4300- 663 -LRB099 14379 HLH 38474 b

1        (v) more inventive technology in the redeeming,
2    selling, and purchasing of products sold by the Lottery.
3    The report shall also include any other items determined by
4the Department to be relevant to the increase of lottery
5revenues.
 
6
ARTICLE 80. RESEARCH AND DEVELOPMENT CREDIT

 
7    Section 80-5. The Illinois Income Tax Act is amended by
8changing Section 201 as follows:
 
9    (35 ILCS 5/201)  (from Ch. 120, par. 2-201)
10    Sec. 201. Tax Imposed.
11    (a) In general. A tax measured by net income is hereby
12imposed on every individual, corporation, trust and estate for
13each taxable year ending after July 31, 1969 on the privilege
14of earning or receiving income in or as a resident of this
15State. Such tax shall be in addition to all other occupation or
16privilege taxes imposed by this State or by any municipal
17corporation or political subdivision thereof.
18    (b) Rates. The tax imposed by subsection (a) of this
19Section shall be determined as follows, except as adjusted by
20subsection (d-1):
21        (1) In the case of an individual, trust or estate, for
22    taxable years ending prior to July 1, 1989, an amount equal
23    to 2 1/2% of the taxpayer's net income for the taxable

 

 

HB4300- 664 -LRB099 14379 HLH 38474 b

1    year.
2        (2) In the case of an individual, trust or estate, for
3    taxable years beginning prior to July 1, 1989 and ending
4    after June 30, 1989, an amount equal to the sum of (i) 2
5    1/2% of the taxpayer's net income for the period prior to
6    July 1, 1989, as calculated under Section 202.3, and (ii)
7    3% of the taxpayer's net income for the period after June
8    30, 1989, as calculated under Section 202.3.
9        (3) In the case of an individual, trust or estate, for
10    taxable years beginning after June 30, 1989, and ending
11    prior to January 1, 2011, an amount equal to 3% of the
12    taxpayer's net income for the taxable year.
13        (4) In the case of an individual, trust, or estate, for
14    taxable years beginning prior to January 1, 2011, and
15    ending after December 31, 2010, an amount equal to the sum
16    of (i) 3% of the taxpayer's net income for the period prior
17    to January 1, 2011, as calculated under Section 202.5, and
18    (ii) 5% of the taxpayer's net income for the period after
19    December 31, 2010, as calculated under Section 202.5.
20        (5) In the case of an individual, trust, or estate, for
21    taxable years beginning on or after January 1, 2011, and
22    ending prior to January 1, 2015, an amount equal to 5% of
23    the taxpayer's net income for the taxable year.
24        (5.1) In the case of an individual, trust, or estate,
25    for taxable years beginning prior to January 1, 2015, and
26    ending after December 31, 2014, an amount equal to the sum

 

 

HB4300- 665 -LRB099 14379 HLH 38474 b

1    of (i) 5% of the taxpayer's net income for the period prior
2    to January 1, 2015, as calculated under Section 202.5, and
3    (ii) 3.75% of the taxpayer's net income for the period
4    after December 31, 2014, as calculated under Section 202.5.
5        (5.2) In the case of an individual, trust, or estate,
6    for taxable years beginning on or after January 1, 2015,
7    and ending prior to January 1, 2025, an amount equal to
8    3.75% of the taxpayer's net income for the taxable year.
9        (5.3) In the case of an individual, trust, or estate,
10    for taxable years beginning prior to January 1, 2025, and
11    ending after December 31, 2024, an amount equal to the sum
12    of (i) 3.75% of the taxpayer's net income for the period
13    prior to January 1, 2025, as calculated under Section
14    202.5, and (ii) 3.25% of the taxpayer's net income for the
15    period after December 31, 2024, as calculated under Section
16    202.5.
17        (5.4) In the case of an individual, trust, or estate,
18    for taxable years beginning on or after January 1, 2025, an
19    amount equal to 3.25% of the taxpayer's net income for the
20    taxable year.
21        (6) In the case of a corporation, for taxable years
22    ending prior to July 1, 1989, an amount equal to 4% of the
23    taxpayer's net income for the taxable year.
24        (7) In the case of a corporation, for taxable years
25    beginning prior to July 1, 1989 and ending after June 30,
26    1989, an amount equal to the sum of (i) 4% of the

 

 

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1    taxpayer's net income for the period prior to July 1, 1989,
2    as calculated under Section 202.3, and (ii) 4.8% of the
3    taxpayer's net income for the period after June 30, 1989,
4    as calculated under Section 202.3.
5        (8) In the case of a corporation, for taxable years
6    beginning after June 30, 1989, and ending prior to January
7    1, 2011, an amount equal to 4.8% of the taxpayer's net
8    income for the taxable year.
9        (9) In the case of a corporation, for taxable years
10    beginning prior to January 1, 2011, and ending after
11    December 31, 2010, an amount equal to the sum of (i) 4.8%
12    of the taxpayer's net income for the period prior to
13    January 1, 2011, as calculated under Section 202.5, and
14    (ii) 7% of the taxpayer's net income for the period after
15    December 31, 2010, as calculated under Section 202.5.
16        (10) In the case of a corporation, for taxable years
17    beginning on or after January 1, 2011, and ending prior to
18    January 1, 2015, an amount equal to 7% of the taxpayer's
19    net income for the taxable year.
20        (11) In the case of a corporation, for taxable years
21    beginning prior to January 1, 2015, and ending after
22    December 31, 2014, an amount equal to the sum of (i) 7% of
23    the taxpayer's net income for the period prior to January
24    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
25    of the taxpayer's net income for the period after December
26    31, 2014, as calculated under Section 202.5.

 

 

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1        (12) In the case of a corporation, for taxable years
2    beginning on or after January 1, 2015, and ending prior to
3    January 1, 2025, an amount equal to 5.25% of the taxpayer's
4    net income for the taxable year.
5        (13) In the case of a corporation, for taxable years
6    beginning prior to January 1, 2025, and ending after
7    December 31, 2024, an amount equal to the sum of (i) 5.25%
8    of the taxpayer's net income for the period prior to
9    January 1, 2025, as calculated under Section 202.5, and
10    (ii) 4.8% of the taxpayer's net income for the period after
11    December 31, 2024, as calculated under Section 202.5.
12        (14) In the case of a corporation, for taxable years
13    beginning on or after January 1, 2025, an amount equal to
14    4.8% of the taxpayer's net income for the taxable year.
15    The rates under this subsection (b) are subject to the
16provisions of Section 201.5.
17    (c) Personal Property Tax Replacement Income Tax.
18Beginning on July 1, 1979 and thereafter, in addition to such
19income tax, there is also hereby imposed the Personal Property
20Tax Replacement Income Tax measured by net income on every
21corporation (including Subchapter S corporations), partnership
22and trust, for each taxable year ending after June 30, 1979.
23Such taxes are imposed on the privilege of earning or receiving
24income in or as a resident of this State. The Personal Property
25Tax Replacement Income Tax shall be in addition to the income
26tax imposed by subsections (a) and (b) of this Section and in

 

 

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1addition to all other occupation or privilege taxes imposed by
2this State or by any municipal corporation or political
3subdivision thereof.
4    (d) Additional Personal Property Tax Replacement Income
5Tax Rates. The personal property tax replacement income tax
6imposed by this subsection and subsection (c) of this Section
7in the case of a corporation, other than a Subchapter S
8corporation and except as adjusted by subsection (d-1), shall
9be an additional amount equal to 2.85% of such taxpayer's net
10income for the taxable year, except that beginning on January
111, 1981, and thereafter, the rate of 2.85% specified in this
12subsection shall be reduced to 2.5%, and in the case of a
13partnership, trust or a Subchapter S corporation shall be an
14additional amount equal to 1.5% of such taxpayer's net income
15for the taxable year.
16    (d-1) Rate reduction for certain foreign insurers. In the
17case of a foreign insurer, as defined by Section 35A-5 of the
18Illinois Insurance Code, whose state or country of domicile
19imposes on insurers domiciled in Illinois a retaliatory tax
20(excluding any insurer whose premiums from reinsurance assumed
21are 50% or more of its total insurance premiums as determined
22under paragraph (2) of subsection (b) of Section 304, except
23that for purposes of this determination premiums from
24reinsurance do not include premiums from inter-affiliate
25reinsurance arrangements), beginning with taxable years ending
26on or after December 31, 1999, the sum of the rates of tax

 

 

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1imposed by subsections (b) and (d) shall be reduced (but not
2increased) to the rate at which the total amount of tax imposed
3under this Act, net of all credits allowed under this Act,
4shall equal (i) the total amount of tax that would be imposed
5on the foreign insurer's net income allocable to Illinois for
6the taxable year by such foreign insurer's state or country of
7domicile if that net income were subject to all income taxes
8and taxes measured by net income imposed by such foreign
9insurer's state or country of domicile, net of all credits
10allowed or (ii) a rate of zero if no such tax is imposed on such
11income by the foreign insurer's state of domicile. For the
12purposes of this subsection (d-1), an inter-affiliate includes
13a mutual insurer under common management.
14        (1) For the purposes of subsection (d-1), in no event
15    shall the sum of the rates of tax imposed by subsections
16    (b) and (d) be reduced below the rate at which the sum of:
17            (A) the total amount of tax imposed on such foreign
18        insurer under this Act for a taxable year, net of all
19        credits allowed under this Act, plus
20            (B) the privilege tax imposed by Section 409 of the
21        Illinois Insurance Code, the fire insurance company
22        tax imposed by Section 12 of the Fire Investigation
23        Act, and the fire department taxes imposed under
24        Section 11-10-1 of the Illinois Municipal Code,
25    equals 1.25% for taxable years ending prior to December 31,
26    2003, or 1.75% for taxable years ending on or after

 

 

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1    December 31, 2003, of the net taxable premiums written for
2    the taxable year, as described by subsection (1) of Section
3    409 of the Illinois Insurance Code. This paragraph will in
4    no event increase the rates imposed under subsections (b)
5    and (d).
6        (2) Any reduction in the rates of tax imposed by this
7    subsection shall be applied first against the rates imposed
8    by subsection (b) and only after the tax imposed by
9    subsection (a) net of all credits allowed under this
10    Section other than the credit allowed under subsection (i)
11    has been reduced to zero, against the rates imposed by
12    subsection (d).
13    This subsection (d-1) is exempt from the provisions of
14Section 250.
15    (e) Investment credit. A taxpayer shall be allowed a credit
16against the Personal Property Tax Replacement Income Tax for
17investment in qualified property.
18        (1) A taxpayer shall be allowed a credit equal to .5%
19    of the basis of qualified property placed in service during
20    the taxable year, provided such property is placed in
21    service on or after July 1, 1984. There shall be allowed an
22    additional credit equal to .5% of the basis of qualified
23    property placed in service during the taxable year,
24    provided such property is placed in service on or after
25    July 1, 1986, and the taxpayer's base employment within
26    Illinois has increased by 1% or more over the preceding

 

 

HB4300- 671 -LRB099 14379 HLH 38474 b

1    year as determined by the taxpayer's employment records
2    filed with the Illinois Department of Employment Security.
3    Taxpayers who are new to Illinois shall be deemed to have
4    met the 1% growth in base employment for the first year in
5    which they file employment records with the Illinois
6    Department of Employment Security. The provisions added to
7    this Section by Public Act 85-1200 (and restored by Public
8    Act 87-895) shall be construed as declaratory of existing
9    law and not as a new enactment. If, in any year, the
10    increase in base employment within Illinois over the
11    preceding year is less than 1%, the additional credit shall
12    be limited to that percentage times a fraction, the
13    numerator of which is .5% and the denominator of which is
14    1%, but shall not exceed .5%. The investment credit shall
15    not be allowed to the extent that it would reduce a
16    taxpayer's liability in any tax year below zero, nor may
17    any credit for qualified property be allowed for any year
18    other than the year in which the property was placed in
19    service in Illinois. For tax years ending on or after
20    December 31, 1987, and on or before December 31, 1988, the
21    credit shall be allowed for the tax year in which the
22    property is placed in service, or, if the amount of the
23    credit exceeds the tax liability for that year, whether it
24    exceeds the original liability or the liability as later
25    amended, such excess may be carried forward and applied to
26    the tax liability of the 5 taxable years following the

 

 

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1    excess credit years if the taxpayer (i) makes investments
2    which cause the creation of a minimum of 2,000 full-time
3    equivalent jobs in Illinois, (ii) is located in an
4    enterprise zone established pursuant to the Illinois
5    Enterprise Zone Act and (iii) is certified by the
6    Department of Commerce and Community Affairs (now
7    Department of Commerce and Economic Opportunity) as
8    complying with the requirements specified in clause (i) and
9    (ii) by July 1, 1986. The Department of Commerce and
10    Community Affairs (now Department of Commerce and Economic
11    Opportunity) shall notify the Department of Revenue of all
12    such certifications immediately. For tax years ending
13    after December 31, 1988, the credit shall be allowed for
14    the tax year in which the property is placed in service,
15    or, if the amount of the credit exceeds the tax liability
16    for that year, whether it exceeds the original liability or
17    the liability as later amended, such excess may be carried
18    forward and applied to the tax liability of the 5 taxable
19    years following the excess credit years. The credit shall
20    be applied to the earliest year for which there is a
21    liability. If there is credit from more than one tax year
22    that is available to offset a liability, earlier credit
23    shall be applied first.
24        (2) The term "qualified property" means property
25    which:
26            (A) is tangible, whether new or used, including

 

 

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1        buildings and structural components of buildings and
2        signs that are real property, but not including land or
3        improvements to real property that are not a structural
4        component of a building such as landscaping, sewer
5        lines, local access roads, fencing, parking lots, and
6        other appurtenances;
7            (B) is depreciable pursuant to Section 167 of the
8        Internal Revenue Code, except that "3-year property"
9        as defined in Section 168(c)(2)(A) of that Code is not
10        eligible for the credit provided by this subsection
11        (e);
12            (C) is acquired by purchase as defined in Section
13        179(d) of the Internal Revenue Code;
14            (D) is used in Illinois by a taxpayer who is
15        primarily engaged in manufacturing, or in mining coal
16        or fluorite, or in retailing, or was placed in service
17        on or after July 1, 2006 in a River Edge Redevelopment
18        Zone established pursuant to the River Edge
19        Redevelopment Zone Act; and
20            (E) has not previously been used in Illinois in
21        such a manner and by such a person as would qualify for
22        the credit provided by this subsection (e) or
23        subsection (f).
24        (3) For purposes of this subsection (e),
25    "manufacturing" means the material staging and production
26    of tangible personal property by procedures commonly

 

 

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1    regarded as manufacturing, processing, fabrication, or
2    assembling which changes some existing material into new
3    shapes, new qualities, or new combinations. For purposes of
4    this subsection (e) the term "mining" shall have the same
5    meaning as the term "mining" in Section 613(c) of the
6    Internal Revenue Code. For purposes of this subsection (e),
7    the term "retailing" means the sale of tangible personal
8    property for use or consumption and not for resale, or
9    services rendered in conjunction with the sale of tangible
10    personal property for use or consumption and not for
11    resale. For purposes of this subsection (e), "tangible
12    personal property" has the same meaning as when that term
13    is used in the Retailers' Occupation Tax Act, and, for
14    taxable years ending after December 31, 2008, does not
15    include the generation, transmission, or distribution of
16    electricity.
17        (4) The basis of qualified property shall be the basis
18    used to compute the depreciation deduction for federal
19    income tax purposes.
20        (5) If the basis of the property for federal income tax
21    depreciation purposes is increased after it has been placed
22    in service in Illinois by the taxpayer, the amount of such
23    increase shall be deemed property placed in service on the
24    date of such increase in basis.
25        (6) The term "placed in service" shall have the same
26    meaning as under Section 46 of the Internal Revenue Code.

 

 

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1        (7) If during any taxable year, any property ceases to
2    be qualified property in the hands of the taxpayer within
3    48 months after being placed in service, or the situs of
4    any qualified property is moved outside Illinois within 48
5    months after being placed in service, the Personal Property
6    Tax Replacement Income Tax for such taxable year shall be
7    increased. Such increase shall be determined by (i)
8    recomputing the investment credit which would have been
9    allowed for the year in which credit for such property was
10    originally allowed by eliminating such property from such
11    computation and, (ii) subtracting such recomputed credit
12    from the amount of credit previously allowed. For the
13    purposes of this paragraph (7), a reduction of the basis of
14    qualified property resulting from a redetermination of the
15    purchase price shall be deemed a disposition of qualified
16    property to the extent of such reduction.
17        (8) Unless the investment credit is extended by law,
18    the basis of qualified property shall not include costs
19    incurred after December 31, 2018, except for costs incurred
20    pursuant to a binding contract entered into on or before
21    December 31, 2018.
22        (9) Each taxable year ending before December 31, 2000,
23    a partnership may elect to pass through to its partners the
24    credits to which the partnership is entitled under this
25    subsection (e) for the taxable year. A partner may use the
26    credit allocated to him or her under this paragraph only

 

 

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1    against the tax imposed in subsections (c) and (d) of this
2    Section. If the partnership makes that election, those
3    credits shall be allocated among the partners in the
4    partnership in accordance with the rules set forth in
5    Section 704(b) of the Internal Revenue Code, and the rules
6    promulgated under that Section, and the allocated amount of
7    the credits shall be allowed to the partners for that
8    taxable year. The partnership shall make this election on
9    its Personal Property Tax Replacement Income Tax return for
10    that taxable year. The election to pass through the credits
11    shall be irrevocable.
12        For taxable years ending on or after December 31, 2000,
13    a partner that qualifies its partnership for a subtraction
14    under subparagraph (I) of paragraph (2) of subsection (d)
15    of Section 203 or a shareholder that qualifies a Subchapter
16    S corporation for a subtraction under subparagraph (S) of
17    paragraph (2) of subsection (b) of Section 203 shall be
18    allowed a credit under this subsection (e) equal to its
19    share of the credit earned under this subsection (e) during
20    the taxable year by the partnership or Subchapter S
21    corporation, determined in accordance with the
22    determination of income and distributive share of income
23    under Sections 702 and 704 and Subchapter S of the Internal
24    Revenue Code. This paragraph is exempt from the provisions
25    of Section 250.
26    (f) Investment credit; Enterprise Zone; River Edge

 

 

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1Redevelopment Zone.
2        (1) A taxpayer shall be allowed a credit against the
3    tax imposed by subsections (a) and (b) of this Section for
4    investment in qualified property which is placed in service
5    in an Enterprise Zone created pursuant to the Illinois
6    Enterprise Zone Act or, for property placed in service on
7    or after July 1, 2006, a River Edge Redevelopment Zone
8    established pursuant to the River Edge Redevelopment Zone
9    Act. For partners, shareholders of Subchapter S
10    corporations, and owners of limited liability companies,
11    if the liability company is treated as a partnership for
12    purposes of federal and State income taxation, there shall
13    be allowed a credit under this subsection (f) to be
14    determined in accordance with the determination of income
15    and distributive share of income under Sections 702 and 704
16    and Subchapter S of the Internal Revenue Code. The credit
17    shall be .5% of the basis for such property. The credit
18    shall be available only in the taxable year in which the
19    property is placed in service in the Enterprise Zone or
20    River Edge Redevelopment Zone and shall not be allowed to
21    the extent that it would reduce a taxpayer's liability for
22    the tax imposed by subsections (a) and (b) of this Section
23    to below zero. For tax years ending on or after December
24    31, 1985, the credit shall be allowed for the tax year in
25    which the property is placed in service, or, if the amount
26    of the credit exceeds the tax liability for that year,

 

 

HB4300- 678 -LRB099 14379 HLH 38474 b

1    whether it exceeds the original liability or the liability
2    as later amended, such excess may be carried forward and
3    applied to the tax liability of the 5 taxable years
4    following the excess credit year. The credit shall be
5    applied to the earliest year for which there is a
6    liability. If there is credit from more than one tax year
7    that is available to offset a liability, the credit
8    accruing first in time shall be applied first.
9        (2) The term qualified property means property which:
10            (A) is tangible, whether new or used, including
11        buildings and structural components of buildings;
12            (B) is depreciable pursuant to Section 167 of the
13        Internal Revenue Code, except that "3-year property"
14        as defined in Section 168(c)(2)(A) of that Code is not
15        eligible for the credit provided by this subsection
16        (f);
17            (C) is acquired by purchase as defined in Section
18        179(d) of the Internal Revenue Code;
19            (D) is used in the Enterprise Zone or River Edge
20        Redevelopment Zone by the taxpayer; and
21            (E) has not been previously used in Illinois in
22        such a manner and by such a person as would qualify for
23        the credit provided by this subsection (f) or
24        subsection (e).
25        (3) The basis of qualified property shall be the basis
26    used to compute the depreciation deduction for federal

 

 

HB4300- 679 -LRB099 14379 HLH 38474 b

1    income tax purposes.
2        (4) If the basis of the property for federal income tax
3    depreciation purposes is increased after it has been placed
4    in service in the Enterprise Zone or River Edge
5    Redevelopment Zone by the taxpayer, the amount of such
6    increase shall be deemed property placed in service on the
7    date of such increase in basis.
8        (5) The term "placed in service" shall have the same
9    meaning as under Section 46 of the Internal Revenue Code.
10        (6) If during any taxable year, any property ceases to
11    be qualified property in the hands of the taxpayer within
12    48 months after being placed in service, or the situs of
13    any qualified property is moved outside the Enterprise Zone
14    or River Edge Redevelopment Zone within 48 months after
15    being placed in service, the tax imposed under subsections
16    (a) and (b) of this Section for such taxable year shall be
17    increased. Such increase shall be determined by (i)
18    recomputing the investment credit which would have been
19    allowed for the year in which credit for such property was
20    originally allowed by eliminating such property from such
21    computation, and (ii) subtracting such recomputed credit
22    from the amount of credit previously allowed. For the
23    purposes of this paragraph (6), a reduction of the basis of
24    qualified property resulting from a redetermination of the
25    purchase price shall be deemed a disposition of qualified
26    property to the extent of such reduction.

 

 

HB4300- 680 -LRB099 14379 HLH 38474 b

1        (7) There shall be allowed an additional credit equal
2    to 0.5% of the basis of qualified property placed in
3    service during the taxable year in a River Edge
4    Redevelopment Zone, provided such property is placed in
5    service on or after July 1, 2006, and the taxpayer's base
6    employment within Illinois has increased by 1% or more over
7    the preceding year as determined by the taxpayer's
8    employment records filed with the Illinois Department of
9    Employment Security. Taxpayers who are new to Illinois
10    shall be deemed to have met the 1% growth in base
11    employment for the first year in which they file employment
12    records with the Illinois Department of Employment
13    Security. If, in any year, the increase in base employment
14    within Illinois over the preceding year is less than 1%,
15    the additional credit shall be limited to that percentage
16    times a fraction, the numerator of which is 0.5% and the
17    denominator of which is 1%, but shall not exceed 0.5%.
18    (g) (Blank).
19    (h) Investment credit; High Impact Business.
20        (1) Subject to subsections (b) and (b-5) of Section 5.5
21    of the Illinois Enterprise Zone Act, a taxpayer shall be
22    allowed a credit against the tax imposed by subsections (a)
23    and (b) of this Section for investment in qualified
24    property which is placed in service by a Department of
25    Commerce and Economic Opportunity designated High Impact
26    Business. The credit shall be .5% of the basis for such

 

 

HB4300- 681 -LRB099 14379 HLH 38474 b

1    property. The credit shall not be available (i) until the
2    minimum investments in qualified property set forth in
3    subdivision (a)(3)(A) of Section 5.5 of the Illinois
4    Enterprise Zone Act have been satisfied or (ii) until the
5    time authorized in subsection (b-5) of the Illinois
6    Enterprise Zone Act for entities designated as High Impact
7    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
8    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
9    Act, and shall not be allowed to the extent that it would
10    reduce a taxpayer's liability for the tax imposed by
11    subsections (a) and (b) of this Section to below zero. The
12    credit applicable to such investments shall be taken in the
13    taxable year in which such investments have been completed.
14    The credit for additional investments beyond the minimum
15    investment by a designated high impact business authorized
16    under subdivision (a)(3)(A) of Section 5.5 of the Illinois
17    Enterprise Zone Act shall be available only in the taxable
18    year in which the property is placed in service and shall
19    not be allowed to the extent that it would reduce a
20    taxpayer's liability for the tax imposed by subsections (a)
21    and (b) of this Section to below zero. For tax years ending
22    on or after December 31, 1987, the credit shall be allowed
23    for the tax year in which the property is placed in
24    service, or, if the amount of the credit exceeds the tax
25    liability for that year, whether it exceeds the original
26    liability or the liability as later amended, such excess

 

 

HB4300- 682 -LRB099 14379 HLH 38474 b

1    may be carried forward and applied to the tax liability of
2    the 5 taxable years following the excess credit year. The
3    credit shall be applied to the earliest year for which
4    there is a liability. If there is credit from more than one
5    tax year that is available to offset a liability, the
6    credit accruing first in time shall be applied first.
7        Changes made in this subdivision (h)(1) by Public Act
8    88-670 restore changes made by Public Act 85-1182 and
9    reflect existing law.
10        (2) The term qualified property means property which:
11            (A) is tangible, whether new or used, including
12        buildings and structural components of buildings;
13            (B) is depreciable pursuant to Section 167 of the
14        Internal Revenue Code, except that "3-year property"
15        as defined in Section 168(c)(2)(A) of that Code is not
16        eligible for the credit provided by this subsection
17        (h);
18            (C) is acquired by purchase as defined in Section
19        179(d) of the Internal Revenue Code; and
20            (D) is not eligible for the Enterprise Zone
21        Investment Credit provided by subsection (f) of this
22        Section.
23        (3) The basis of qualified property shall be the basis
24    used to compute the depreciation deduction for federal
25    income tax purposes.
26        (4) If the basis of the property for federal income tax

 

 

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1    depreciation purposes is increased after it has been placed
2    in service in a federally designated Foreign Trade Zone or
3    Sub-Zone located in Illinois by the taxpayer, the amount of
4    such increase shall be deemed property placed in service on
5    the date of such increase in basis.
6        (5) The term "placed in service" shall have the same
7    meaning as under Section 46 of the Internal Revenue Code.
8        (6) If during any taxable year ending on or before
9    December 31, 1996, any property ceases to be qualified
10    property in the hands of the taxpayer within 48 months
11    after being placed in service, or the situs of any
12    qualified property is moved outside Illinois within 48
13    months after being placed in service, the tax imposed under
14    subsections (a) and (b) of this Section for such taxable
15    year shall be increased. Such increase shall be determined
16    by (i) recomputing the investment credit which would have
17    been allowed for the year in which credit for such property
18    was originally allowed by eliminating such property from
19    such computation, and (ii) subtracting such recomputed
20    credit from the amount of credit previously allowed. For
21    the purposes of this paragraph (6), a reduction of the
22    basis of qualified property resulting from a
23    redetermination of the purchase price shall be deemed a
24    disposition of qualified property to the extent of such
25    reduction.
26        (7) Beginning with tax years ending after December 31,

 

 

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1    1996, if a taxpayer qualifies for the credit under this
2    subsection (h) and thereby is granted a tax abatement and
3    the taxpayer relocates its entire facility in violation of
4    the explicit terms and length of the contract under Section
5    18-183 of the Property Tax Code, the tax imposed under
6    subsections (a) and (b) of this Section shall be increased
7    for the taxable year in which the taxpayer relocated its
8    facility by an amount equal to the amount of credit
9    received by the taxpayer under this subsection (h).
10    (i) Credit for Personal Property Tax Replacement Income
11Tax. For tax years ending prior to December 31, 2003, a credit
12shall be allowed against the tax imposed by subsections (a) and
13(b) of this Section for the tax imposed by subsections (c) and
14(d) of this Section. This credit shall be computed by
15multiplying the tax imposed by subsections (c) and (d) of this
16Section by a fraction, the numerator of which is base income
17allocable to Illinois and the denominator of which is Illinois
18base income, and further multiplying the product by the tax
19rate imposed by subsections (a) and (b) of this Section.
20    Any credit earned on or after December 31, 1986 under this
21subsection which is unused in the year the credit is computed
22because it exceeds the tax liability imposed by subsections (a)
23and (b) for that year (whether it exceeds the original
24liability or the liability as later amended) may be carried
25forward and applied to the tax liability imposed by subsections
26(a) and (b) of the 5 taxable years following the excess credit

 

 

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1year, provided that no credit may be carried forward to any
2year ending on or after December 31, 2003. This credit shall be
3applied first to the earliest year for which there is a
4liability. If there is a credit under this subsection from more
5than one tax year that is available to offset a liability the
6earliest credit arising under this subsection shall be applied
7first.
8    If, during any taxable year ending on or after December 31,
91986, the tax imposed by subsections (c) and (d) of this
10Section for which a taxpayer has claimed a credit under this
11subsection (i) is reduced, the amount of credit for such tax
12shall also be reduced. Such reduction shall be determined by
13recomputing the credit to take into account the reduced tax
14imposed by subsections (c) and (d). If any portion of the
15reduced amount of credit has been carried to a different
16taxable year, an amended return shall be filed for such taxable
17year to reduce the amount of credit claimed.
18    (j) Training expense credit. Beginning with tax years
19ending on or after December 31, 1986 and prior to December 31,
202003, a taxpayer shall be allowed a credit against the tax
21imposed by subsections (a) and (b) under this Section for all
22amounts paid or accrued, on behalf of all persons employed by
23the taxpayer in Illinois or Illinois residents employed outside
24of Illinois by a taxpayer, for educational or vocational
25training in semi-technical or technical fields or semi-skilled
26or skilled fields, which were deducted from gross income in the

 

 

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1computation of taxable income. The credit against the tax
2imposed by subsections (a) and (b) shall be 1.6% of such
3training expenses. For partners, shareholders of subchapter S
4corporations, and owners of limited liability companies, if the
5liability company is treated as a partnership for purposes of
6federal and State income taxation, there shall be allowed a
7credit under this subsection (j) to be determined in accordance
8with the determination of income and distributive share of
9income under Sections 702 and 704 and subchapter S of the
10Internal Revenue Code.
11    Any credit allowed under this subsection which is unused in
12the year the credit is earned may be carried forward to each of
13the 5 taxable years following the year for which the credit is
14first computed until it is used. This credit shall be applied
15first to the earliest year for which there is a liability. If
16there is a credit under this subsection from more than one tax
17year that is available to offset a liability the earliest
18credit arising under this subsection shall be applied first. No
19carryforward credit may be claimed in any tax year ending on or
20after December 31, 2003.
21    (k) Research and development credit. For tax years ending
22after July 1, 1990 and prior to December 31, 2003, and
23beginning again for tax years ending on or after December 31,
242004, and ending prior to January 1, 2016, a taxpayer shall be
25allowed a credit against the tax imposed by subsections (a) and
26(b) of this Section for increasing research activities in this

 

 

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1State. The credit allowed against the tax imposed by
2subsections (a) and (b) shall be equal to 6 1/2% of the
3qualifying expenditures for increasing research activities in
4this State. For partners, shareholders of subchapter S
5corporations, and owners of limited liability companies, if the
6liability company is treated as a partnership for purposes of
7federal and State income taxation, there shall be allowed a
8credit under this subsection to be determined in accordance
9with the determination of income and distributive share of
10income under Sections 702 and 704 and subchapter S of the
11Internal Revenue Code.
12    For purposes of this subsection, "qualifying expenditures"
13means the qualifying expenditures as defined for the federal
14credit for increasing research activities which would be
15allowable under Section 41 of the Internal Revenue Code and
16which are conducted in this State, "qualifying expenditures for
17increasing research activities in this State" means the excess
18of qualifying expenditures for the taxable year in which
19incurred over qualifying expenditures for the base period,
20"qualifying expenditures for the base period" means: (1) for
21tax years ending prior to December 31, 2015, the average of the
22qualifying expenditures for each year in the base period; and
23(2) for for tax years ending on or after December 31, 2015, 50%
24of the average of the qualifying expenditures for each year in
25the base period, and "base period" means the 3 taxable years
26immediately preceding the taxable year for which the

 

 

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1determination is being made.
2    Any credit in excess of the tax liability for the taxable
3year may be carried forward. A taxpayer may elect to have the
4unused credit shown on its final completed return carried over
5as a credit against the tax liability for the following 20 5
6taxable years or until it has been fully used, whichever occurs
7first; provided that no credit earned in a tax year ending
8prior to December 31, 2003 may be carried forward to any year
9ending on or after December 31, 2003.
10    If an unused credit is carried forward to a given year from
112 or more earlier years, that credit arising in the earliest
12year will be applied first against the tax liability for the
13given year. If a tax liability for the given year still
14remains, the credit from the next earliest year will then be
15applied, and so on, until all credits have been used or no tax
16liability for the given year remains. Any remaining unused
17credit or credits then will be carried forward to the next
18following year in which a tax liability is incurred, except
19that no credit can be carried forward to a year which is more
20than 5 years after the year in which the expense for which the
21credit is given was incurred.
22    No inference shall be drawn from this amendatory Act of the
2391st General Assembly in construing this Section for taxable
24years beginning before January 1, 1999.
25    This subsection (k) is exempt from the provisions of
26Section 250.

 

 

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1    (l) Environmental Remediation Tax Credit.
2        (i) For tax years ending after December 31, 1997 and on
3    or before December 31, 2001, a taxpayer shall be allowed a
4    credit against the tax imposed by subsections (a) and (b)
5    of this Section for certain amounts paid for unreimbursed
6    eligible remediation costs, as specified in this
7    subsection. For purposes of this Section, "unreimbursed
8    eligible remediation costs" means costs approved by the
9    Illinois Environmental Protection Agency ("Agency") under
10    Section 58.14 of the Environmental Protection Act that were
11    paid in performing environmental remediation at a site for
12    which a No Further Remediation Letter was issued by the
13    Agency and recorded under Section 58.10 of the
14    Environmental Protection Act. The credit must be claimed
15    for the taxable year in which Agency approval of the
16    eligible remediation costs is granted. The credit is not
17    available to any taxpayer if the taxpayer or any related
18    party caused or contributed to, in any material respect, a
19    release of regulated substances on, in, or under the site
20    that was identified and addressed by the remedial action
21    pursuant to the Site Remediation Program of the
22    Environmental Protection Act. After the Pollution Control
23    Board rules are adopted pursuant to the Illinois
24    Administrative Procedure Act for the administration and
25    enforcement of Section 58.9 of the Environmental
26    Protection Act, determinations as to credit availability

 

 

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1    for purposes of this Section shall be made consistent with
2    those rules. For purposes of this Section, "taxpayer"
3    includes a person whose tax attributes the taxpayer has
4    succeeded to under Section 381 of the Internal Revenue Code
5    and "related party" includes the persons disallowed a
6    deduction for losses by paragraphs (b), (c), and (f)(1) of
7    Section 267 of the Internal Revenue Code by virtue of being
8    a related taxpayer, as well as any of its partners. The
9    credit allowed against the tax imposed by subsections (a)
10    and (b) shall be equal to 25% of the unreimbursed eligible
11    remediation costs in excess of $100,000 per site, except
12    that the $100,000 threshold shall not apply to any site
13    contained in an enterprise zone as determined by the
14    Department of Commerce and Community Affairs (now
15    Department of Commerce and Economic Opportunity). The
16    total credit allowed shall not exceed $40,000 per year with
17    a maximum total of $150,000 per site. For partners and
18    shareholders of subchapter S corporations, there shall be
19    allowed a credit under this subsection to be determined in
20    accordance with the determination of income and
21    distributive share of income under Sections 702 and 704 and
22    subchapter S of the Internal Revenue Code.
23        (ii) A credit allowed under this subsection that is
24    unused in the year the credit is earned may be carried
25    forward to each of the 5 taxable years following the year
26    for which the credit is first earned until it is used. The

 

 

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1    term "unused credit" does not include any amounts of
2    unreimbursed eligible remediation costs in excess of the
3    maximum credit per site authorized under paragraph (i).
4    This credit shall be applied first to the earliest year for
5    which there is a liability. If there is a credit under this
6    subsection from more than one tax year that is available to
7    offset a liability, the earliest credit arising under this
8    subsection shall be applied first. A credit allowed under
9    this subsection may be sold to a buyer as part of a sale of
10    all or part of the remediation site for which the credit
11    was granted. The purchaser of a remediation site and the
12    tax credit shall succeed to the unused credit and remaining
13    carry-forward period of the seller. To perfect the
14    transfer, the assignor shall record the transfer in the
15    chain of title for the site and provide written notice to
16    the Director of the Illinois Department of Revenue of the
17    assignor's intent to sell the remediation site and the
18    amount of the tax credit to be transferred as a portion of
19    the sale. In no event may a credit be transferred to any
20    taxpayer if the taxpayer or a related party would not be
21    eligible under the provisions of subsection (i).
22        (iii) For purposes of this Section, the term "site"
23    shall have the same meaning as under Section 58.2 of the
24    Environmental Protection Act.
25    (m) Education expense credit. Beginning with tax years
26ending after December 31, 1999, a taxpayer who is the custodian

 

 

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1of one or more qualifying pupils shall be allowed a credit
2against the tax imposed by subsections (a) and (b) of this
3Section for qualified education expenses incurred on behalf of
4the qualifying pupils. The credit shall be equal to 25% of
5qualified education expenses, but in no event may the total
6credit under this subsection claimed by a family that is the
7custodian of qualifying pupils exceed $500. In no event shall a
8credit under this subsection reduce the taxpayer's liability
9under this Act to less than zero. This subsection is exempt
10from the provisions of Section 250 of this Act.
11    For purposes of this subsection:
12    "Qualifying pupils" means individuals who (i) are
13residents of the State of Illinois, (ii) are under the age of
1421 at the close of the school year for which a credit is
15sought, and (iii) during the school year for which a credit is
16sought were full-time pupils enrolled in a kindergarten through
17twelfth grade education program at any school, as defined in
18this subsection.
19    "Qualified education expense" means the amount incurred on
20behalf of a qualifying pupil in excess of $250 for tuition,
21book fees, and lab fees at the school in which the pupil is
22enrolled during the regular school year.
23    "School" means any public or nonpublic elementary or
24secondary school in Illinois that is in compliance with Title
25VI of the Civil Rights Act of 1964 and attendance at which
26satisfies the requirements of Section 26-1 of the School Code,

 

 

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1except that nothing shall be construed to require a child to
2attend any particular public or nonpublic school to qualify for
3the credit under this Section.
4    "Custodian" means, with respect to qualifying pupils, an
5Illinois resident who is a parent, the parents, a legal
6guardian, or the legal guardians of the qualifying pupils.
7    (n) River Edge Redevelopment Zone site remediation tax
8credit.
9        (i) For tax years ending on or after December 31, 2006,
10    a taxpayer shall be allowed a credit against the tax
11    imposed by subsections (a) and (b) of this Section for
12    certain amounts paid for unreimbursed eligible remediation
13    costs, as specified in this subsection. For purposes of
14    this Section, "unreimbursed eligible remediation costs"
15    means costs approved by the Illinois Environmental
16    Protection Agency ("Agency") under Section 58.14a of the
17    Environmental Protection Act that were paid in performing
18    environmental remediation at a site within a River Edge
19    Redevelopment Zone for which a No Further Remediation
20    Letter was issued by the Agency and recorded under Section
21    58.10 of the Environmental Protection Act. The credit must
22    be claimed for the taxable year in which Agency approval of
23    the eligible remediation costs is granted. The credit is
24    not available to any taxpayer if the taxpayer or any
25    related party caused or contributed to, in any material
26    respect, a release of regulated substances on, in, or under

 

 

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1    the site that was identified and addressed by the remedial
2    action pursuant to the Site Remediation Program of the
3    Environmental Protection Act. Determinations as to credit
4    availability for purposes of this Section shall be made
5    consistent with rules adopted by the Pollution Control
6    Board pursuant to the Illinois Administrative Procedure
7    Act for the administration and enforcement of Section 58.9
8    of the Environmental Protection Act. For purposes of this
9    Section, "taxpayer" includes a person whose tax attributes
10    the taxpayer has succeeded to under Section 381 of the
11    Internal Revenue Code and "related party" includes the
12    persons disallowed a deduction for losses by paragraphs
13    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
14    Code by virtue of being a related taxpayer, as well as any
15    of its partners. The credit allowed against the tax imposed
16    by subsections (a) and (b) shall be equal to 25% of the
17    unreimbursed eligible remediation costs in excess of
18    $100,000 per site.
19        (ii) A credit allowed under this subsection that is
20    unused in the year the credit is earned may be carried
21    forward to each of the 5 taxable years following the year
22    for which the credit is first earned until it is used. This
23    credit shall be applied first to the earliest year for
24    which there is a liability. If there is a credit under this
25    subsection from more than one tax year that is available to
26    offset a liability, the earliest credit arising under this

 

 

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1    subsection shall be applied first. A credit allowed under
2    this subsection may be sold to a buyer as part of a sale of
3    all or part of the remediation site for which the credit
4    was granted. The purchaser of a remediation site and the
5    tax credit shall succeed to the unused credit and remaining
6    carry-forward period of the seller. To perfect the
7    transfer, the assignor shall record the transfer in the
8    chain of title for the site and provide written notice to
9    the Director of the Illinois Department of Revenue of the
10    assignor's intent to sell the remediation site and the
11    amount of the tax credit to be transferred as a portion of
12    the sale. In no event may a credit be transferred to any
13    taxpayer if the taxpayer or a related party would not be
14    eligible under the provisions of subsection (i).
15        (iii) For purposes of this Section, the term "site"
16    shall have the same meaning as under Section 58.2 of the
17    Environmental Protection Act.
18    (o) For each of taxable years during the Compassionate Use
19of Medical Cannabis Pilot Program, a surcharge is imposed on
20all taxpayers on income arising from the sale or exchange of
21capital assets, depreciable business property, real property
22used in the trade or business, and Section 197 intangibles of
23an organization registrant under the Compassionate Use of
24Medical Cannabis Pilot Program Act. The amount of the surcharge
25is equal to the amount of federal income tax liability for the
26taxable year attributable to those sales and exchanges. The

 

 

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1surcharge imposed does not apply if:
2        (1) the medical cannabis cultivation center
3    registration, medical cannabis dispensary registration, or
4    the property of a registration is transferred as a result
5    of any of the following:
6            (A) bankruptcy, a receivership, or a debt
7        adjustment initiated by or against the initial
8        registration or the substantial owners of the initial
9        registration;
10            (B) cancellation, revocation, or termination of
11        any registration by the Illinois Department of Public
12        Health;
13            (C) a determination by the Illinois Department of
14        Public Health that transfer of the registration is in
15        the best interests of Illinois qualifying patients as
16        defined by the Compassionate Use of Medical Cannabis
17        Pilot Program Act;
18            (D) the death of an owner of the equity interest in
19        a registrant;
20            (E) the acquisition of a controlling interest in
21        the stock or substantially all of the assets of a
22        publicly traded company;
23            (F) a transfer by a parent company to a wholly
24        owned subsidiary; or
25            (G) the transfer or sale to or by one person to
26        another person where both persons were initial owners

 

 

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1        of the registration when the registration was issued;
2        or
3        (2) the cannabis cultivation center registration,
4    medical cannabis dispensary registration, or the
5    controlling interest in a registrant's property is
6    transferred in a transaction to lineal descendants in which
7    no gain or loss is recognized or as a result of a
8    transaction in accordance with Section 351 of the Internal
9    Revenue Code in which no gain or loss is recognized.
10(Source: P.A. 97-2, eff. 5-6-11; 97-636, eff. 6-1-12; 97-905,
11eff. 8-7-12; 98-109, eff. 7-25-13; 98-122, eff. 1-1-14; 98-756,
12eff. 7-16-14.)
 
13
ARTICLE 85. MANUFACTURING CREDITS

 
14    Section 85-5. The Use Tax Act is amended by changing
15Sections 3-5 and 3-50 as follows:
 
16    (35 ILCS 105/3-5)
17    Sec. 3-5. Exemptions. Use of the following tangible
18personal property is exempt from the tax imposed by this Act:
19    (1) Personal property purchased from a corporation,
20society, association, foundation, institution, or
21organization, other than a limited liability company, that is
22organized and operated as a not-for-profit service enterprise
23for the benefit of persons 65 years of age or older if the

 

 

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1personal property was not purchased by the enterprise for the
2purpose of resale by the enterprise.
3    (2) Personal property purchased by a not-for-profit
4Illinois county fair association for use in conducting,
5operating, or promoting the county fair.
6    (3) Personal property purchased by a not-for-profit arts or
7cultural organization that establishes, by proof required by
8the Department by rule, that it has received an exemption under
9Section 501(c)(3) of the Internal Revenue Code and that is
10organized and operated primarily for the presentation or
11support of arts or cultural programming, activities, or
12services. These organizations include, but are not limited to,
13music and dramatic arts organizations such as symphony
14orchestras and theatrical groups, arts and cultural service
15organizations, local arts councils, visual arts organizations,
16and media arts organizations. On and after the effective date
17of this amendatory Act of the 92nd General Assembly, however,
18an entity otherwise eligible for this exemption shall not make
19tax-free purchases unless it has an active identification
20number issued by the Department.
21    (4) Personal property purchased by a governmental body, by
22a corporation, society, association, foundation, or
23institution organized and operated exclusively for charitable,
24religious, or educational purposes, or by a not-for-profit
25corporation, society, association, foundation, institution, or
26organization that has no compensated officers or employees and

 

 

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1that is organized and operated primarily for the recreation of
2persons 55 years of age or older. A limited liability company
3may qualify for the exemption under this paragraph only if the
4limited liability company is organized and operated
5exclusively for educational purposes. On and after July 1,
61987, however, no entity otherwise eligible for this exemption
7shall make tax-free purchases unless it has an active exemption
8identification number issued by the Department.
9    (5) Until July 1, 2003, a passenger car that is a
10replacement vehicle to the extent that the purchase price of
11the car is subject to the Replacement Vehicle Tax.
12    (6) Until July 1, 2003 and beginning again on September 1,
132004 through August 30, 2014, graphic arts machinery and
14equipment, including repair and replacement parts, both new and
15used, and including that manufactured on special order,
16certified by the purchaser to be used primarily for graphic
17arts production, and including machinery and equipment
18purchased for lease. Equipment includes chemicals or chemicals
19acting as catalysts but only if the chemicals or chemicals
20acting as catalysts effect a direct and immediate change upon a
21graphic arts product.
22    (7) Farm chemicals.
23    (8) Legal tender, currency, medallions, or gold or silver
24coinage issued by the State of Illinois, the government of the
25United States of America, or the government of any foreign
26country, and bullion.

 

 

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1    (9) Personal property purchased from a teacher-sponsored
2student organization affiliated with an elementary or
3secondary school located in Illinois.
4    (10) A motor vehicle that is used for automobile renting,
5as defined in the Automobile Renting Occupation and Use Tax
6Act.
7    (11) Farm machinery and equipment, both new and used,
8including that manufactured on special order, certified by the
9purchaser to be used primarily for production agriculture or
10State or federal agricultural programs, including individual
11replacement parts for the machinery and equipment, including
12machinery and equipment purchased for lease, and including
13implements of husbandry defined in Section 1-130 of the
14Illinois Vehicle Code, farm machinery and agricultural
15chemical and fertilizer spreaders, and nurse wagons required to
16be registered under Section 3-809 of the Illinois Vehicle Code,
17but excluding other motor vehicles required to be registered
18under the Illinois Vehicle Code. Horticultural polyhouses or
19hoop houses used for propagating, growing, or overwintering
20plants shall be considered farm machinery and equipment under
21this item (11). Agricultural chemical tender tanks and dry
22boxes shall include units sold separately from a motor vehicle
23required to be licensed and units sold mounted on a motor
24vehicle required to be licensed if the selling price of the
25tender is separately stated.
26    Farm machinery and equipment shall include precision

 

 

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1farming equipment that is installed or purchased to be
2installed on farm machinery and equipment including, but not
3limited to, tractors, harvesters, sprayers, planters, seeders,
4or spreaders. Precision farming equipment includes, but is not
5limited to, soil testing sensors, computers, monitors,
6software, global positioning and mapping systems, and other
7such equipment.
8    Farm machinery and equipment also includes computers,
9sensors, software, and related equipment used primarily in the
10computer-assisted operation of production agriculture
11facilities, equipment, and activities such as, but not limited
12to, the collection, monitoring, and correlation of animal and
13crop data for the purpose of formulating animal diets and
14agricultural chemicals. This item (11) is exempt from the
15provisions of Section 3-90.
16    (12) Until June 30, 2013, fuel and petroleum products sold
17to or used by an air common carrier, certified by the carrier
18to be used for consumption, shipment, or storage in the conduct
19of its business as an air common carrier, for a flight destined
20for or returning from a location or locations outside the
21United States without regard to previous or subsequent domestic
22stopovers.
23    Beginning July 1, 2013, fuel and petroleum products sold to
24or used by an air carrier, certified by the carrier to be used
25for consumption, shipment, or storage in the conduct of its
26business as an air common carrier, for a flight that (i) is

 

 

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1engaged in foreign trade or is engaged in trade between the
2United States and any of its possessions and (ii) transports at
3least one individual or package for hire from the city of
4origination to the city of final destination on the same
5aircraft, without regard to a change in the flight number of
6that aircraft.
7    (13) Proceeds of mandatory service charges separately
8stated on customers' bills for the purchase and consumption of
9food and beverages purchased at retail from a retailer, to the
10extent that the proceeds of the service charge are in fact
11turned over as tips or as a substitute for tips to the
12employees who participate directly in preparing, serving,
13hosting or cleaning up the food or beverage function with
14respect to which the service charge is imposed.
15    (14) Until July 1, 2003, oil field exploration, drilling,
16and production equipment, including (i) rigs and parts of rigs,
17rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
18tubular goods, including casing and drill strings, (iii) pumps
19and pump-jack units, (iv) storage tanks and flow lines, (v) any
20individual replacement part for oil field exploration,
21drilling, and production equipment, and (vi) machinery and
22equipment purchased for lease; but excluding motor vehicles
23required to be registered under the Illinois Vehicle Code.
24    (15) Photoprocessing machinery and equipment, including
25repair and replacement parts, both new and used, including that
26manufactured on special order, certified by the purchaser to be

 

 

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1used primarily for photoprocessing, and including
2photoprocessing machinery and equipment purchased for lease.
3    (16) Coal and aggregate exploration, mining, off-highway
4hauling, processing, maintenance, and reclamation equipment,
5including replacement parts and equipment, and including
6equipment purchased for lease, but excluding motor vehicles
7required to be registered under the Illinois Vehicle Code. The
8changes made to this Section by Public Act 97-767 apply on and
9after July 1, 2003, but no claim for credit or refund is
10allowed on or after August 16, 2013 (the effective date of
11Public Act 98-456) for such taxes paid during the period
12beginning July 1, 2003 and ending on August 16, 2013 (the
13effective date of Public Act 98-456).
14    (17) Until July 1, 2003, distillation machinery and
15equipment, sold as a unit or kit, assembled or installed by the
16retailer, certified by the user to be used only for the
17production of ethyl alcohol that will be used for consumption
18as motor fuel or as a component of motor fuel for the personal
19use of the user, and not subject to sale or resale.
20    (18) Manufacturing and assembling machinery and equipment
21used primarily in the process of manufacturing or assembling
22tangible personal property for wholesale or retail sale or
23lease, whether that sale or lease is made directly by the
24manufacturer or by some other person, whether the materials
25used in the process are owned by the manufacturer or some other
26person, or whether that sale or lease is made apart from or as

 

 

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1an incident to the seller's engaging in the service occupation
2of producing machines, tools, dies, jigs, patterns, gauges, or
3other similar items of no commercial value on special order for
4a particular purchaser. The exemption provided by this
5paragraph (18) includes production related tangible personal
6property, as defined in Section 3-50, purchased on or after
7July 1, 2016. The exemption provided by this paragraph (18)
8does not include machinery and equipment used in (i) the
9generation of electricity for wholesale or retail sale; (ii)
10the generation or treatment of natural or artificial gas for
11wholesale or retail sale that is delivered to customers through
12pipes, pipelines, or mains; or (iii) the treatment of water for
13wholesale or retail sale that is delivered to customers through
14pipes, pipelines, or mains. The provisions of Public Act 98-583
15are declaratory of existing law as to the meaning and scope of
16this exemption.
17    (19) Personal property delivered to a purchaser or
18purchaser's donee inside Illinois when the purchase order for
19that personal property was received by a florist located
20outside Illinois who has a florist located inside Illinois
21deliver the personal property.
22    (20) Semen used for artificial insemination of livestock
23for direct agricultural production.
24    (21) Horses, or interests in horses, registered with and
25meeting the requirements of any of the Arabian Horse Club
26Registry of America, Appaloosa Horse Club, American Quarter

 

 

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1Horse Association, United States Trotting Association, or
2Jockey Club, as appropriate, used for purposes of breeding or
3racing for prizes. This item (21) is exempt from the provisions
4of Section 3-90, and the exemption provided for under this item
5(21) applies for all periods beginning May 30, 1995, but no
6claim for credit or refund is allowed on or after January 1,
72008 for such taxes paid during the period beginning May 30,
82000 and ending on January 1, 2008.
9    (22) Computers and communications equipment utilized for
10any hospital purpose and equipment used in the diagnosis,
11analysis, or treatment of hospital patients purchased by a
12lessor who leases the equipment, under a lease of one year or
13longer executed or in effect at the time the lessor would
14otherwise be subject to the tax imposed by this Act, to a
15hospital that has been issued an active tax exemption
16identification number by the Department under Section 1g of the
17Retailers' Occupation Tax Act. If the equipment is leased in a
18manner that does not qualify for this exemption or is used in
19any other non-exempt manner, the lessor shall be liable for the
20tax imposed under this Act or the Service Use Tax Act, as the
21case may be, based on the fair market value of the property at
22the time the non-qualifying use occurs. No lessor shall collect
23or attempt to collect an amount (however designated) that
24purports to reimburse that lessor for the tax imposed by this
25Act or the Service Use Tax Act, as the case may be, if the tax
26has not been paid by the lessor. If a lessor improperly

 

 

HB4300- 706 -LRB099 14379 HLH 38474 b

1collects any such amount from the lessee, the lessee shall have
2a legal right to claim a refund of that amount from the lessor.
3If, however, that amount is not refunded to the lessee for any
4reason, the lessor is liable to pay that amount to the
5Department.
6    (23) Personal property purchased by a lessor who leases the
7property, under a lease of one year or longer executed or in
8effect at the time the lessor would otherwise be subject to the
9tax imposed by this Act, to a governmental body that has been
10issued an active sales tax exemption identification number by
11the Department under Section 1g of the Retailers' Occupation
12Tax Act. If the property is leased in a manner that does not
13qualify for this exemption or used in any other non-exempt
14manner, the lessor shall be liable for the tax imposed under
15this Act or the Service Use Tax Act, as the case may be, based
16on the fair market value of the property at the time the
17non-qualifying use occurs. No lessor shall collect or attempt
18to collect an amount (however designated) that purports to
19reimburse that lessor for the tax imposed by this Act or the
20Service Use Tax Act, as the case may be, if the tax has not been
21paid by the lessor. If a lessor improperly collects any such
22amount from the lessee, the lessee shall have a legal right to
23claim a refund of that amount from the lessor. If, however,
24that amount is not refunded to the lessee for any reason, the
25lessor is liable to pay that amount to the Department.
26    (24) Beginning with taxable years ending on or after

 

 

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1December 31, 1995 and ending with taxable years ending on or
2before December 31, 2004, personal property that is donated for
3disaster relief to be used in a State or federally declared
4disaster area in Illinois or bordering Illinois by a
5manufacturer or retailer that is registered in this State to a
6corporation, society, association, foundation, or institution
7that has been issued a sales tax exemption identification
8number by the Department that assists victims of the disaster
9who reside within the declared disaster area.
10    (25) Beginning with taxable years ending on or after
11December 31, 1995 and ending with taxable years ending on or
12before December 31, 2004, personal property that is used in the
13performance of infrastructure repairs in this State, including
14but not limited to municipal roads and streets, access roads,
15bridges, sidewalks, waste disposal systems, water and sewer
16line extensions, water distribution and purification
17facilities, storm water drainage and retention facilities, and
18sewage treatment facilities, resulting from a State or
19federally declared disaster in Illinois or bordering Illinois
20when such repairs are initiated on facilities located in the
21declared disaster area within 6 months after the disaster.
22    (26) Beginning July 1, 1999, game or game birds purchased
23at a "game breeding and hunting preserve area" as that term is
24used in the Wildlife Code. This paragraph is exempt from the
25provisions of Section 3-90.
26    (27) A motor vehicle, as that term is defined in Section

 

 

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11-146 of the Illinois Vehicle Code, that is donated to a
2corporation, limited liability company, society, association,
3foundation, or institution that is determined by the Department
4to be organized and operated exclusively for educational
5purposes. For purposes of this exemption, "a corporation,
6limited liability company, society, association, foundation,
7or institution organized and operated exclusively for
8educational purposes" means all tax-supported public schools,
9private schools that offer systematic instruction in useful
10branches of learning by methods common to public schools and
11that compare favorably in their scope and intensity with the
12course of study presented in tax-supported schools, and
13vocational or technical schools or institutes organized and
14operated exclusively to provide a course of study of not less
15than 6 weeks duration and designed to prepare individuals to
16follow a trade or to pursue a manual, technical, mechanical,
17industrial, business, or commercial occupation.
18    (28) Beginning January 1, 2000, personal property,
19including food, purchased through fundraising events for the
20benefit of a public or private elementary or secondary school,
21a group of those schools, or one or more school districts if
22the events are sponsored by an entity recognized by the school
23district that consists primarily of volunteers and includes
24parents and teachers of the school children. This paragraph
25does not apply to fundraising events (i) for the benefit of
26private home instruction or (ii) for which the fundraising

 

 

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1entity purchases the personal property sold at the events from
2another individual or entity that sold the property for the
3purpose of resale by the fundraising entity and that profits
4from the sale to the fundraising entity. This paragraph is
5exempt from the provisions of Section 3-90.
6    (29) Beginning January 1, 2000 and through December 31,
72001, new or used automatic vending machines that prepare and
8serve hot food and beverages, including coffee, soup, and other
9items, and replacement parts for these machines. Beginning
10January 1, 2002 and through June 30, 2003, machines and parts
11for machines used in commercial, coin-operated amusement and
12vending business if a use or occupation tax is paid on the
13gross receipts derived from the use of the commercial,
14coin-operated amusement and vending machines. This paragraph
15is exempt from the provisions of Section 3-90.
16    (30) Beginning January 1, 2001 and through June 30, 2016,
17food for human consumption that is to be consumed off the
18premises where it is sold (other than alcoholic beverages, soft
19drinks, and food that has been prepared for immediate
20consumption) and prescription and nonprescription medicines,
21drugs, medical appliances, and insulin, urine testing
22materials, syringes, and needles used by diabetics, for human
23use, when purchased for use by a person receiving medical
24assistance under Article V of the Illinois Public Aid Code who
25resides in a licensed long-term care facility, as defined in
26the Nursing Home Care Act, or in a licensed facility as defined

 

 

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1in the ID/DD Community Care Act, the MC/DD Act, or the
2Specialized Mental Health Rehabilitation Act of 2013.
3    (31) Beginning on the effective date of this amendatory Act
4of the 92nd General Assembly, computers and communications
5equipment utilized for any hospital purpose and equipment used
6in the diagnosis, analysis, or treatment of hospital patients
7purchased by a lessor who leases the equipment, under a lease
8of one year or longer executed or in effect at the time the
9lessor would otherwise be subject to the tax imposed by this
10Act, to a hospital that has been issued an active tax exemption
11identification number by the Department under Section 1g of the
12Retailers' Occupation Tax Act. If the equipment is leased in a
13manner that does not qualify for this exemption or is used in
14any other nonexempt manner, the lessor shall be liable for the
15tax imposed under this Act or the Service Use Tax Act, as the
16case may be, based on the fair market value of the property at
17the time the nonqualifying use occurs. No lessor shall collect
18or attempt to collect an amount (however designated) that
19purports to reimburse that lessor for the tax imposed by this
20Act or the Service Use Tax Act, as the case may be, if the tax
21has not been paid by the lessor. If a lessor improperly
22collects any such amount from the lessee, the lessee shall have
23a legal right to claim a refund of that amount from the lessor.
24If, however, that amount is not refunded to the lessee for any
25reason, the lessor is liable to pay that amount to the
26Department. This paragraph is exempt from the provisions of

 

 

HB4300- 711 -LRB099 14379 HLH 38474 b

1Section 3-90.
2    (32) Beginning on the effective date of this amendatory Act
3of the 92nd General Assembly, personal property purchased by a
4lessor who leases the property, under a lease of one year or
5longer executed or in effect at the time the lessor would
6otherwise be subject to the tax imposed by this Act, to a
7governmental body that has been issued an active sales tax
8exemption identification number by the Department under
9Section 1g of the Retailers' Occupation Tax Act. If the
10property is leased in a manner that does not qualify for this
11exemption or used in any other nonexempt manner, the lessor
12shall be liable for the tax imposed under this Act or the
13Service Use Tax Act, as the case may be, based on the fair
14market value of the property at the time the nonqualifying use
15occurs. No lessor shall collect or attempt to collect an amount
16(however designated) that purports to reimburse that lessor for
17the tax imposed by this Act or the Service Use Tax Act, as the
18case may be, if the tax has not been paid by the lessor. If a
19lessor improperly collects any such amount from the lessee, the
20lessee shall have a legal right to claim a refund of that
21amount from the lessor. If, however, that amount is not
22refunded to the lessee for any reason, the lessor is liable to
23pay that amount to the Department. This paragraph is exempt
24from the provisions of Section 3-90.
25    (33) On and after July 1, 2003 and through June 30, 2004,
26the use in this State of motor vehicles of the second division

 

 

HB4300- 712 -LRB099 14379 HLH 38474 b

1with a gross vehicle weight in excess of 8,000 pounds and that
2are subject to the commercial distribution fee imposed under
3Section 3-815.1 of the Illinois Vehicle Code. Beginning on July
41, 2004 and through June 30, 2005, the use in this State of
5motor vehicles of the second division: (i) with a gross vehicle
6weight rating in excess of 8,000 pounds; (ii) that are subject
7to the commercial distribution fee imposed under Section
83-815.1 of the Illinois Vehicle Code; and (iii) that are
9primarily used for commercial purposes. Through June 30, 2005,
10this exemption applies to repair and replacement parts added
11after the initial purchase of such a motor vehicle if that
12motor vehicle is used in a manner that would qualify for the
13rolling stock exemption otherwise provided for in this Act. For
14purposes of this paragraph, the term "used for commercial
15purposes" means the transportation of persons or property in
16furtherance of any commercial or industrial enterprise,
17whether for-hire or not.
18    (34) Beginning January 1, 2008, tangible personal property
19used in the construction or maintenance of a community water
20supply, as defined under Section 3.145 of the Environmental
21Protection Act, that is operated by a not-for-profit
22corporation that holds a valid water supply permit issued under
23Title IV of the Environmental Protection Act. This paragraph is
24exempt from the provisions of Section 3-90.
25    (35) Beginning January 1, 2010, materials, parts,
26equipment, components, and furnishings incorporated into or

 

 

HB4300- 713 -LRB099 14379 HLH 38474 b

1upon an aircraft as part of the modification, refurbishment,
2completion, replacement, repair, or maintenance of the
3aircraft. This exemption includes consumable supplies used in
4the modification, refurbishment, completion, replacement,
5repair, and maintenance of aircraft, but excludes any
6materials, parts, equipment, components, and consumable
7supplies used in the modification, replacement, repair, and
8maintenance of aircraft engines or power plants, whether such
9engines or power plants are installed or uninstalled upon any
10such aircraft. "Consumable supplies" include, but are not
11limited to, adhesive, tape, sandpaper, general purpose
12lubricants, cleaning solution, latex gloves, and protective
13films. This exemption applies only to the use of qualifying
14tangible personal property by persons who modify, refurbish,
15complete, repair, replace, or maintain aircraft and who (i)
16hold an Air Agency Certificate and are empowered to operate an
17approved repair station by the Federal Aviation
18Administration, (ii) have a Class IV Rating, and (iii) conduct
19operations in accordance with Part 145 of the Federal Aviation
20Regulations. The exemption does not include aircraft operated
21by a commercial air carrier providing scheduled passenger air
22service pursuant to authority issued under Part 121 or Part 129
23of the Federal Aviation Regulations. The changes made to this
24paragraph (35) by Public Act 98-534 are declarative of existing
25law.
26    (36) Tangible personal property purchased by a

 

 

HB4300- 714 -LRB099 14379 HLH 38474 b

1public-facilities corporation, as described in Section
211-65-10 of the Illinois Municipal Code, for purposes of
3constructing or furnishing a municipal convention hall, but
4only if the legal title to the municipal convention hall is
5transferred to the municipality without any further
6consideration by or on behalf of the municipality at the time
7of the completion of the municipal convention hall or upon the
8retirement or redemption of any bonds or other debt instruments
9issued by the public-facilities corporation in connection with
10the development of the municipal convention hall. This
11exemption includes existing public-facilities corporations as
12provided in Section 11-65-25 of the Illinois Municipal Code.
13This paragraph is exempt from the provisions of Section 3-90.
14(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
1598-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.
161-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.
177-29-15.)
 
18    (35 ILCS 105/3-50)  (from Ch. 120, par. 439.3-50)
19    Sec. 3-50. Manufacturing and assembly exemption. The
20manufacturing and assembling machinery and equipment exemption
21includes machinery and equipment that replaces machinery and
22equipment in an existing manufacturing facility as well as
23machinery and equipment that are for use in an expanded or new
24manufacturing facility. The machinery and equipment exemption
25also includes machinery and equipment used in the general

 

 

HB4300- 715 -LRB099 14379 HLH 38474 b

1maintenance or repair of exempt machinery and equipment or for
2in-house manufacture of exempt machinery and equipment. The
3machinery and equipment exemption does not include machinery
4and equipment used in (i) the generation of electricity for
5wholesale or retail sale; (ii) the generation or treatment of
6natural or artificial gas for wholesale or retail sale that is
7delivered to customers through pipes, pipelines, or mains; or
8(iii) the treatment of water for wholesale or retail sale that
9is delivered to customers through pipes, pipelines, or mains.
10The provisions of this amendatory Act of the 98th General
11Assembly are declaratory of existing law as to the meaning and
12scope of this exemption. For the purposes of this exemption,
13terms have the following meanings:
14        (1) "Manufacturing process" means the production of an
15    article of tangible personal property, whether the article
16    is a finished product or an article for use in the process
17    of manufacturing or assembling a different article of
18    tangible personal property, by a procedure commonly
19    regarded as manufacturing, processing, fabricating, or
20    refining that changes some existing material into a
21    material with a different form, use, or name. In relation
22    to a recognized integrated business composed of a series of
23    operations that collectively constitute manufacturing, or
24    individually constitute manufacturing operations, the
25    manufacturing process commences with the first operation
26    or stage of production in the series and does not end until

 

 

HB4300- 716 -LRB099 14379 HLH 38474 b

1    the completion of the final product in the last operation
2    or stage of production in the series. For purposes of this
3    exemption, photoprocessing is a manufacturing process of
4    tangible personal property for wholesale or retail sale.
5        (2) "Assembling process" means the production of an
6    article of tangible personal property, whether the article
7    is a finished product or an article for use in the process
8    of manufacturing or assembling a different article of
9    tangible personal property, by the combination of existing
10    materials in a manner commonly regarded as assembling that
11    results in an article or material of a different form, use,
12    or name.
13        (3) "Machinery" means major mechanical machines or
14    major components of those machines contributing to a
15    manufacturing or assembling process.
16        (4) "Equipment" includes an independent device or tool
17    separate from machinery but essential to an integrated
18    manufacturing or assembly process; including computers
19    used primarily in a manufacturer's computer assisted
20    design, computer assisted manufacturing (CAD/CAM) system;
21    any subunit or assembly comprising a component of any
22    machinery or auxiliary, adjunct, or attachment parts of
23    machinery, such as tools, dies, jigs, fixtures, patterns,
24    and molds; and any parts that require periodic replacement
25    in the course of normal operation; but does not include
26    hand tools. Equipment includes chemicals or chemicals

 

 

HB4300- 717 -LRB099 14379 HLH 38474 b

1    acting as catalysts but only if the chemicals or chemicals
2    acting as catalysts effect a direct and immediate change
3    upon a product being manufactured or assembled for
4    wholesale or retail sale or lease.
5        (5) "Production related tangible personal property"
6    means all tangible personal property that is used or
7    consumed by the purchaser in a manufacturing facility in
8    which a manufacturing process takes place and includes,
9    without limitation, tangible personal property that is
10    purchased for incorporation into real estate within a
11    manufacturing facility, supplies and consumables used in a
12    manufacturing facility including fuels, coolants,
13    solvents, oils, lubricants, and adhesives, hand tools,
14    protective apparel, and fire and safety equipment used or
15    consumed within a manufacturing facility, and tangible
16    personal property that is used or consumed in activities
17    such as research and development, preproduction material
18    handling, receiving, quality control, inventory control,
19    storage, staging, and packaging for shipping and
20    transportation purposes. "Production related tangible
21    personal property" does not include (i) tangible personal
22    property that is used, within or without a manufacturing
23    facility, in sales, purchasing, accounting, fiscal
24    management, marketing, personnel recruitment or selection,
25    or landscaping or (ii) tangible personal property that is
26    required to be titled or registered with a department,

 

 

HB4300- 718 -LRB099 14379 HLH 38474 b

1    agency, or unit of federal, State, or local government.
2    The manufacturing and assembling machinery and equipment
3exemption includes production related tangible personal
4property that is purchased on or after July 1, 2007 and on or
5before June 30, 2008 and on or after July 1, 2016. The
6exemption for production related tangible personal property
7purchased on or after July 1, 2007 and on or before June 30,
82008 is subject to both of the following limitations:
9        (1) The maximum amount of the exemption for any one
10    taxpayer may not exceed 5% of the purchase price of
11    production related tangible personal property that is
12    purchased on or after July 1, 2007 and on or before June
13    30, 2008. A credit under Section 3-85 of this Act may not
14    be earned by the purchase of production related tangible
15    personal property for which an exemption is received under
16    this Section.
17        (2) The maximum aggregate amount of the exemptions for
18    production related tangible personal property awarded
19    under this Act and the Retailers' Occupation Tax Act to all
20    taxpayers purchased on or after July 1, 2007 and before
21    June 30, 2008 may not exceed $10,000,000. If the claims for
22    the exemption exceed $10,000,000, then the Department
23    shall reduce the amount of the exemption to each taxpayer
24    on a pro rata basis.
25The Department shall may adopt rules to implement and
26administer the exemption for production related tangible

 

 

HB4300- 719 -LRB099 14379 HLH 38474 b

1personal property.
2    The manufacturing and assembling machinery and equipment
3exemption includes the sale of materials to a purchaser who
4produces exempted types of machinery, equipment, or tools and
5who rents or leases that machinery, equipment, or tools to a
6manufacturer of tangible personal property. This exemption
7also includes the sale of materials to a purchaser who
8manufactures those materials into an exempted type of
9machinery, equipment, or tools that the purchaser uses himself
10or herself in the manufacturing of tangible personal property.
11This exemption includes the sale of exempted types of machinery
12or equipment to a purchaser who is not the manufacturer, but
13who rents or leases the use of the property to a manufacturer.
14The purchaser of the machinery and equipment who has an active
15resale registration number shall furnish that number to the
16seller at the time of purchase. A user of the machinery,
17equipment, or tools without an active resale registration
18number shall prepare a certificate of exemption for each
19transaction stating facts establishing the exemption for that
20transaction, and that certificate shall be available to the
21Department for inspection or audit. The Department shall
22prescribe the form of the certificate. Informal rulings,
23opinions, or letters issued by the Department in response to an
24inquiry or request for an opinion from any person regarding the
25coverage and applicability of this exemption to specific
26devices shall be published, maintained as a public record, and

 

 

HB4300- 720 -LRB099 14379 HLH 38474 b

1made available for public inspection and copying. If the
2informal ruling, opinion, or letter contains trade secrets or
3other confidential information, where possible, the Department
4shall delete that information before publication. Whenever
5informal rulings, opinions, or letters contain a policy of
6general applicability, the Department shall formulate and
7adopt that policy as a rule in accordance with the Illinois
8Administrative Procedure Act.
9(Source: P.A. 98-583, eff. 1-1-14.)
 
10    Section 85-10. The Service Use Tax Act is amended by
11changing Section 2 as follows:
 
12    (35 ILCS 110/2)  (from Ch. 120, par. 439.32)
13    Sec. 2. Definitions.
14    "Use" means the exercise by any person of any right or
15power over tangible personal property incident to the ownership
16of that property, but does not include the sale or use for
17demonstration by him of that property in any form as tangible
18personal property in the regular course of business. "Use" does
19not mean the interim use of tangible personal property nor the
20physical incorporation of tangible personal property, as an
21ingredient or constituent, into other tangible personal
22property, (a) which is sold in the regular course of business
23or (b) which the person incorporating such ingredient or
24constituent therein has undertaken at the time of such purchase

 

 

HB4300- 721 -LRB099 14379 HLH 38474 b

1to cause to be transported in interstate commerce to
2destinations outside the State of Illinois.
3    "Purchased from a serviceman" means the acquisition of the
4ownership of, or title to, tangible personal property through a
5sale of service.
6    "Purchaser" means any person who, through a sale of
7service, acquires the ownership of, or title to, any tangible
8personal property.
9    "Cost price" means the consideration paid by the serviceman
10for a purchase valued in money, whether paid in money or
11otherwise, including cash, credits and services, and shall be
12determined without any deduction on account of the supplier's
13cost of the property sold or on account of any other expense
14incurred by the supplier. When a serviceman contracts out part
15or all of the services required in his sale of service, it
16shall be presumed that the cost price to the serviceman of the
17property transferred to him or her by his or her subcontractor
18is equal to 50% of the subcontractor's charges to the
19serviceman in the absence of proof of the consideration paid by
20the subcontractor for the purchase of such property.
21    "Selling price" means the consideration for a sale valued
22in money whether received in money or otherwise, including
23cash, credits and service, and shall be determined without any
24deduction on account of the serviceman's cost of the property
25sold, the cost of materials used, labor or service cost or any
26other expense whatsoever, but does not include interest or

 

 

HB4300- 722 -LRB099 14379 HLH 38474 b

1finance charges which appear as separate items on the bill of
2sale or sales contract nor charges that are added to prices by
3sellers on account of the seller's duty to collect, from the
4purchaser, the tax that is imposed by this Act.
5    "Department" means the Department of Revenue.
6    "Person" means any natural individual, firm, partnership,
7association, joint stock company, joint venture, public or
8private corporation, limited liability company, and any
9receiver, executor, trustee, guardian or other representative
10appointed by order of any court.
11    "Sale of service" means any transaction except:
12        (1) a retail sale of tangible personal property taxable
13    under the Retailers' Occupation Tax Act or under the Use
14    Tax Act.
15        (2) a sale of tangible personal property for the
16    purpose of resale made in compliance with Section 2c of the
17    Retailers' Occupation Tax Act.
18        (3) except as hereinafter provided, a sale or transfer
19    of tangible personal property as an incident to the
20    rendering of service for or by any governmental body, or
21    for or by any corporation, society, association,
22    foundation or institution organized and operated
23    exclusively for charitable, religious or educational
24    purposes or any not-for-profit corporation, society,
25    association, foundation, institution or organization which
26    has no compensated officers or employees and which is

 

 

HB4300- 723 -LRB099 14379 HLH 38474 b

1    organized and operated primarily for the recreation of
2    persons 55 years of age or older. A limited liability
3    company may qualify for the exemption under this paragraph
4    only if the limited liability company is organized and
5    operated exclusively for educational purposes.
6        (4) a sale or transfer of tangible personal property as
7    an incident to the rendering of service for interstate
8    carriers for hire for use as rolling stock moving in
9    interstate commerce or by lessors under a lease of one year
10    or longer, executed or in effect at the time of purchase of
11    personal property, to interstate carriers for hire for use
12    as rolling stock moving in interstate commerce so long as
13    so used by such interstate carriers for hire, and equipment
14    operated by a telecommunications provider, licensed as a
15    common carrier by the Federal Communications Commission,
16    which is permanently installed in or affixed to aircraft
17    moving in interstate commerce.
18        (4a) a sale or transfer of tangible personal property
19    as an incident to the rendering of service for owners,
20    lessors, or shippers of tangible personal property which is
21    utilized by interstate carriers for hire for use as rolling
22    stock moving in interstate commerce so long as so used by
23    interstate carriers for hire, and equipment operated by a
24    telecommunications provider, licensed as a common carrier
25    by the Federal Communications Commission, which is
26    permanently installed in or affixed to aircraft moving in

 

 

HB4300- 724 -LRB099 14379 HLH 38474 b

1    interstate commerce.
2        (4a-5) on and after July 1, 2003 and through June 30,
3    2004, a sale or transfer of a motor vehicle of the second
4    division with a gross vehicle weight in excess of 8,000
5    pounds as an incident to the rendering of service if that
6    motor vehicle is subject to the commercial distribution fee
7    imposed under Section 3-815.1 of the Illinois Vehicle Code.
8    Beginning on July 1, 2004 and through June 30, 2005, the
9    use in this State of motor vehicles of the second division:
10    (i) with a gross vehicle weight rating in excess of 8,000
11    pounds; (ii) that are subject to the commercial
12    distribution fee imposed under Section 3-815.1 of the
13    Illinois Vehicle Code; and (iii) that are primarily used
14    for commercial purposes. Through June 30, 2005, this
15    exemption applies to repair and replacement parts added
16    after the initial purchase of such a motor vehicle if that
17    motor vehicle is used in a manner that would qualify for
18    the rolling stock exemption otherwise provided for in this
19    Act. For purposes of this paragraph, "used for commercial
20    purposes" means the transportation of persons or property
21    in furtherance of any commercial or industrial enterprise
22    whether for-hire or not.
23        (5) a sale or transfer of machinery and equipment used
24    primarily in the process of the manufacturing or
25    assembling, either in an existing, an expanded or a new
26    manufacturing facility, of tangible personal property for

 

 

HB4300- 725 -LRB099 14379 HLH 38474 b

1    wholesale or retail sale or lease, whether such sale or
2    lease is made directly by the manufacturer or by some other
3    person, whether the materials used in the process are owned
4    by the manufacturer or some other person, or whether such
5    sale or lease is made apart from or as an incident to the
6    seller's engaging in a service occupation and the
7    applicable tax is a Service Use Tax or Service Occupation
8    Tax, rather than Use Tax or Retailers' Occupation Tax. The
9    exemption provided by this paragraph (5) includes
10    production related tangible personal property, as defined
11    in Section 3-50 of the Use Tax Act, purchased on or after
12    July 1, 2016. The exemption provided by this paragraph (5)
13    does not include machinery and equipment used in (i) the
14    generation of electricity for wholesale or retail sale;
15    (ii) the generation or treatment of natural or artificial
16    gas for wholesale or retail sale that is delivered to
17    customers through pipes, pipelines, or mains; or (iii) the
18    treatment of water for wholesale or retail sale that is
19    delivered to customers through pipes, pipelines, or mains.
20    The provisions of this amendatory Act of the 98th General
21    Assembly are declaratory of existing law as to the meaning
22    and scope of this exemption.
23        (5a) the repairing, reconditioning or remodeling, for
24    a common carrier by rail, of tangible personal property
25    which belongs to such carrier for hire, and as to which
26    such carrier receives the physical possession of the

 

 

HB4300- 726 -LRB099 14379 HLH 38474 b

1    repaired, reconditioned or remodeled item of tangible
2    personal property in Illinois, and which such carrier
3    transports, or shares with another common carrier in the
4    transportation of such property, out of Illinois on a
5    standard uniform bill of lading showing the person who
6    repaired, reconditioned or remodeled the property to a
7    destination outside Illinois, for use outside Illinois.
8        (5b) a sale or transfer of tangible personal property
9    which is produced by the seller thereof on special order in
10    such a way as to have made the applicable tax the Service
11    Occupation Tax or the Service Use Tax, rather than the
12    Retailers' Occupation Tax or the Use Tax, for an interstate
13    carrier by rail which receives the physical possession of
14    such property in Illinois, and which transports such
15    property, or shares with another common carrier in the
16    transportation of such property, out of Illinois on a
17    standard uniform bill of lading showing the seller of the
18    property as the shipper or consignor of such property to a
19    destination outside Illinois, for use outside Illinois.
20        (6) until July 1, 2003, a sale or transfer of
21    distillation machinery and equipment, sold as a unit or kit
22    and assembled or installed by the retailer, which machinery
23    and equipment is certified by the user to be used only for
24    the production of ethyl alcohol that will be used for
25    consumption as motor fuel or as a component of motor fuel
26    for the personal use of such user and not subject to sale

 

 

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1    or resale.
2        (7) at the election of any serviceman not required to
3    be otherwise registered as a retailer under Section 2a of
4    the Retailers' Occupation Tax Act, made for each fiscal
5    year sales of service in which the aggregate annual cost
6    price of tangible personal property transferred as an
7    incident to the sales of service is less than 35%, or 75%
8    in the case of servicemen transferring prescription drugs
9    or servicemen engaged in graphic arts production, of the
10    aggregate annual total gross receipts from all sales of
11    service. The purchase of such tangible personal property by
12    the serviceman shall be subject to tax under the Retailers'
13    Occupation Tax Act and the Use Tax Act. However, if a
14    primary serviceman who has made the election described in
15    this paragraph subcontracts service work to a secondary
16    serviceman who has also made the election described in this
17    paragraph, the primary serviceman does not incur a Use Tax
18    liability if the secondary serviceman (i) has paid or will
19    pay Use Tax on his or her cost price of any tangible
20    personal property transferred to the primary serviceman
21    and (ii) certifies that fact in writing to the primary
22    serviceman.
23    Tangible personal property transferred incident to the
24completion of a maintenance agreement is exempt from the tax
25imposed pursuant to this Act.
26    Exemption (5) also includes machinery and equipment used in

 

 

HB4300- 728 -LRB099 14379 HLH 38474 b

1the general maintenance or repair of such exempt machinery and
2equipment or for in-house manufacture of exempt machinery and
3equipment. The machinery and equipment exemption does not
4include machinery and equipment used in (i) the generation of
5electricity for wholesale or retail sale; (ii) the generation
6or treatment of natural or artificial gas for wholesale or
7retail sale that is delivered to customers through pipes,
8pipelines, or mains; or (iii) the treatment of water for
9wholesale or retail sale that is delivered to customers through
10pipes, pipelines, or mains. The provisions of this amendatory
11Act of the 98th General Assembly are declaratory of existing
12law as to the meaning and scope of this exemption. For the
13purposes of exemption (5), each of these terms shall have the
14following meanings: (1) "manufacturing process" shall mean the
15production of any article of tangible personal property,
16whether such article is a finished product or an article for
17use in the process of manufacturing or assembling a different
18article of tangible personal property, by procedures commonly
19regarded as manufacturing, processing, fabricating, or
20refining which changes some existing material or materials into
21a material with a different form, use or name. In relation to a
22recognized integrated business composed of a series of
23operations which collectively constitute manufacturing, or
24individually constitute manufacturing operations, the
25manufacturing process shall be deemed to commence with the
26first operation or stage of production in the series, and shall

 

 

HB4300- 729 -LRB099 14379 HLH 38474 b

1not be deemed to end until the completion of the final product
2in the last operation or stage of production in the series; and
3further, for purposes of exemption (5), photoprocessing is
4deemed to be a manufacturing process of tangible personal
5property for wholesale or retail sale; (2) "assembling process"
6shall mean the production of any article of tangible personal
7property, whether such article is a finished product or an
8article for use in the process of manufacturing or assembling a
9different article of tangible personal property, by the
10combination of existing materials in a manner commonly regarded
11as assembling which results in a material of a different form,
12use or name; (3) "machinery" shall mean major mechanical
13machines or major components of such machines contributing to a
14manufacturing or assembling process; and (4) "equipment" shall
15include any independent device or tool separate from any
16machinery but essential to an integrated manufacturing or
17assembly process; including computers used primarily in a
18manufacturer's computer assisted design, computer assisted
19manufacturing (CAD/CAM) system; or any subunit or assembly
20comprising a component of any machinery or auxiliary, adjunct
21or attachment parts of machinery, such as tools, dies, jigs,
22fixtures, patterns and molds; or any parts which require
23periodic replacement in the course of normal operation; but
24shall not include hand tools. Equipment includes chemicals or
25chemicals acting as catalysts but only if the chemicals or
26chemicals acting as catalysts effect a direct and immediate

 

 

HB4300- 730 -LRB099 14379 HLH 38474 b

1change upon a product being manufactured or assembled for
2wholesale or retail sale or lease. The purchaser of such
3machinery and equipment who has an active resale registration
4number shall furnish such number to the seller at the time of
5purchase. The user of such machinery and equipment and tools
6without an active resale registration number shall prepare a
7certificate of exemption for each transaction stating facts
8establishing the exemption for that transaction, which
9certificate shall be available to the Department for inspection
10or audit. The Department shall prescribe the form of the
11certificate.
12    Any informal rulings, opinions or letters issued by the
13Department in response to an inquiry or request for any opinion
14from any person regarding the coverage and applicability of
15exemption (5) to specific devices shall be published,
16maintained as a public record, and made available for public
17inspection and copying. If the informal ruling, opinion or
18letter contains trade secrets or other confidential
19information, where possible the Department shall delete such
20information prior to publication. Whenever such informal
21rulings, opinions, or letters contain any policy of general
22applicability, the Department shall formulate and adopt such
23policy as a rule in accordance with the provisions of the
24Illinois Administrative Procedure Act.
25    On and after July 1, 1987, no entity otherwise eligible
26under exemption (3) of this Section shall make tax free

 

 

HB4300- 731 -LRB099 14379 HLH 38474 b

1purchases unless it has an active exemption identification
2number issued by the Department.
3    The purchase, employment and transfer of such tangible
4personal property as newsprint and ink for the primary purpose
5of conveying news (with or without other information) is not a
6purchase, use or sale of service or of tangible personal
7property within the meaning of this Act.
8    "Serviceman" means any person who is engaged in the
9occupation of making sales of service.
10    "Sale at retail" means "sale at retail" as defined in the
11Retailers' Occupation Tax Act.
12    "Supplier" means any person who makes sales of tangible
13personal property to servicemen for the purpose of resale as an
14incident to a sale of service.
15    "Serviceman maintaining a place of business in this State",
16or any like term, means and includes any serviceman:
17        1. having or maintaining within this State, directly or
18    by a subsidiary, an office, distribution house, sales
19    house, warehouse or other place of business, or any agent
20    or other representative operating within this State under
21    the authority of the serviceman or its subsidiary,
22    irrespective of whether such place of business or agent or
23    other representative is located here permanently or
24    temporarily, or whether such serviceman or subsidiary is
25    licensed to do business in this State;
26        1.1. having a contract with a person located in this

 

 

HB4300- 732 -LRB099 14379 HLH 38474 b

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

 

 

HB4300- 733 -LRB099 14379 HLH 38474 b

1        1.2. beginning July 1, 2011, having a contract with a
2    person located in this State under which:
3            A. the serviceman sells the same or substantially
4        similar line of services as the person located in this
5        State and does so using an identical or substantially
6        similar name, trade name, or trademark as the person
7        located in this State; and
8            B. the serviceman provides a commission or other
9        consideration to the person located in this State based
10        upon the sale of services by the serviceman.
11    The provisions of this paragraph 1.2 shall apply only if
12    the cumulative gross receipts from sales of service by the
13    serviceman to customers in this State under all such
14    contracts exceed $10,000 during the preceding 4 quarterly
15    periods ending on the last day of March, June, September,
16    and December;
17        2. soliciting orders for tangible personal property by
18    means of a telecommunication or television shopping system
19    (which utilizes toll free numbers) which is intended by the
20    retailer to be broadcast by cable television or other means
21    of broadcasting, to consumers located in this State;
22        3. pursuant to a contract with a broadcaster or
23    publisher located in this State, soliciting orders for
24    tangible personal property by means of advertising which is
25    disseminated primarily to consumers located in this State
26    and only secondarily to bordering jurisdictions;

 

 

HB4300- 734 -LRB099 14379 HLH 38474 b

1        4. soliciting orders for tangible personal property by
2    mail if the solicitations are substantial and recurring and
3    if the retailer benefits from any banking, financing, debt
4    collection, telecommunication, or marketing activities
5    occurring in this State or benefits from the location in
6    this State of authorized installation, servicing, or
7    repair facilities;
8        5. being owned or controlled by the same interests
9    which own or control any retailer engaging in business in
10    the same or similar line of business in this State;
11        6. having a franchisee or licensee operating under its
12    trade name if the franchisee or licensee is required to
13    collect the tax under this Section;
14        7. pursuant to a contract with a cable television
15    operator located in this State, soliciting orders for
16    tangible personal property by means of advertising which is
17    transmitted or distributed over a cable television system
18    in this State; or
19        8. engaging in activities in Illinois, which
20    activities in the state in which the supply business
21    engaging in such activities is located would constitute
22    maintaining a place of business in that state.
23(Source: P.A. 98-583, eff. 1-1-14; 98-1089, eff. 1-1-15.)
 
24    Section 85-15. The Service Occupation Tax Act is amended by
25changing Section 2 as follows:
 

 

 

HB4300- 735 -LRB099 14379 HLH 38474 b

1    (35 ILCS 115/2)  (from Ch. 120, par. 439.102)
2    Sec. 2. "Transfer" means any transfer of the title to
3property or of the ownership of property whether or not the
4transferor retains title as security for the payment of amounts
5due him from the transferee.
6    "Cost Price" means the consideration paid by the serviceman
7for a purchase valued in money, whether paid in money or
8otherwise, including cash, credits and services, and shall be
9determined without any deduction on account of the supplier's
10cost of the property sold or on account of any other expense
11incurred by the supplier. When a serviceman contracts out part
12or all of the services required in his sale of service, it
13shall be presumed that the cost price to the serviceman of the
14property transferred to him by his or her subcontractor is
15equal to 50% of the subcontractor's charges to the serviceman
16in the absence of proof of the consideration paid by the
17subcontractor for the purchase of such property.
18    "Department" means the Department of Revenue.
19    "Person" means any natural individual, firm, partnership,
20association, joint stock company, joint venture, public or
21private corporation, limited liability company, and any
22receiver, executor, trustee, guardian or other representative
23appointed by order of any court.
24    "Sale of Service" means any transaction except:
25    (a) A retail sale of tangible personal property taxable

 

 

HB4300- 736 -LRB099 14379 HLH 38474 b

1under the Retailers' Occupation Tax Act or under the Use Tax
2Act.
3    (b) A sale of tangible personal property for the purpose of
4resale made in compliance with Section 2c of the Retailers'
5Occupation Tax Act.
6    (c) Except as hereinafter provided, a sale or transfer of
7tangible personal property as an incident to the rendering of
8service for or by any governmental body or for or by any
9corporation, society, association, foundation or institution
10organized and operated exclusively for charitable, religious
11or educational purposes or any not-for-profit corporation,
12society, association, foundation, institution or organization
13which has no compensated officers or employees and which is
14organized and operated primarily for the recreation of persons
1555 years of age or older. A limited liability company may
16qualify for the exemption under this paragraph only if the
17limited liability company is organized and operated
18exclusively for educational purposes.
19    (d) A sale or transfer of tangible personal property as an
20incident to the rendering of service for interstate carriers
21for hire for use as rolling stock moving in interstate commerce
22or lessors under leases of one year or longer, executed or in
23effect at the time of purchase, to interstate carriers for hire
24for use as rolling stock moving in interstate commerce, and
25equipment operated by a telecommunications provider, licensed
26as a common carrier by the Federal Communications Commission,

 

 

HB4300- 737 -LRB099 14379 HLH 38474 b

1which is permanently installed in or affixed to aircraft moving
2in interstate commerce.
3    (d-1) A sale or transfer of tangible personal property as
4an incident to the rendering of service for owners, lessors or
5shippers of tangible personal property which is utilized by
6interstate carriers for hire for use as rolling stock moving in
7interstate commerce, and equipment operated by a
8telecommunications provider, licensed as a common carrier by
9the Federal Communications Commission, which is permanently
10installed in or affixed to aircraft moving in interstate
11commerce.
12    (d-1.1) On and after July 1, 2003 and through June 30,
132004, a sale or transfer of a motor vehicle of the second
14division with a gross vehicle weight in excess of 8,000 pounds
15as an incident to the rendering of service if that motor
16vehicle is subject to the commercial distribution fee imposed
17under Section 3-815.1 of the Illinois Vehicle Code. Beginning
18on July 1, 2004 and through June 30, 2005, the use in this
19State of motor vehicles of the second division: (i) with a
20gross vehicle weight rating in excess of 8,000 pounds; (ii)
21that are subject to the commercial distribution fee imposed
22under Section 3-815.1 of the Illinois Vehicle Code; and (iii)
23that are primarily used for commercial purposes. Through June
2430, 2005, this exemption applies to repair and replacement
25parts added after the initial purchase of such a motor vehicle
26if that motor vehicle is used in a manner that would qualify

 

 

HB4300- 738 -LRB099 14379 HLH 38474 b

1for the rolling stock exemption otherwise provided for in this
2Act. For purposes of this paragraph, "used for commercial
3purposes" means the transportation of persons or property in
4furtherance of any commercial or industrial enterprise whether
5for-hire or not.
6    (d-2) The repairing, reconditioning or remodeling, for a
7common carrier by rail, of tangible personal property which
8belongs to such carrier for hire, and as to which such carrier
9receives the physical possession of the repaired,
10reconditioned or remodeled item of tangible personal property
11in Illinois, and which such carrier transports, or shares with
12another common carrier in the transportation of such property,
13out of Illinois on a standard uniform bill of lading showing
14the person who repaired, reconditioned or remodeled the
15property as the shipper or consignor of such property to a
16destination outside Illinois, for use outside Illinois.
17    (d-3) A sale or transfer of tangible personal property
18which is produced by the seller thereof on special order in
19such a way as to have made the applicable tax the Service
20Occupation Tax or the Service Use Tax, rather than the
21Retailers' Occupation Tax or the Use Tax, for an interstate
22carrier by rail which receives the physical possession of such
23property in Illinois, and which transports such property, or
24shares with another common carrier in the transportation of
25such property, out of Illinois on a standard uniform bill of
26lading showing the seller of the property as the shipper or

 

 

HB4300- 739 -LRB099 14379 HLH 38474 b

1consignor of such property to a destination outside Illinois,
2for use outside Illinois.
3    (d-4) Until January 1, 1997, a sale, by a registered
4serviceman paying tax under this Act to the Department, of
5special order printed materials delivered outside Illinois and
6which are not returned to this State, if delivery is made by
7the seller or agent of the seller, including an agent who
8causes the product to be delivered outside Illinois by a common
9carrier or the U.S. postal service.
10    (e) A sale or transfer of machinery and equipment used
11primarily in the process of the manufacturing or assembling,
12either in an existing, an expanded or a new manufacturing
13facility, of tangible personal property for wholesale or retail
14sale or lease, whether such sale or lease is made directly by
15the manufacturer or by some other person, whether the materials
16used in the process are owned by the manufacturer or some other
17person, or whether such sale or lease is made apart from or as
18an incident to the seller's engaging in a service occupation
19and the applicable tax is a Service Occupation Tax or Service
20Use Tax, rather than Retailers' Occupation Tax or Use Tax. The
21exemption provided by this paragraph (e) includes production
22related tangible personal property, as defined in Section 3-50
23of the Use Tax Act, purchased on or after July 1, 2016. The
24exemption provided by this paragraph (e) does not include
25machinery and equipment used in (i) the generation of
26electricity for wholesale or retail sale; (ii) the generation

 

 

HB4300- 740 -LRB099 14379 HLH 38474 b

1or treatment of natural or artificial gas for wholesale or
2retail sale that is delivered to customers through pipes,
3pipelines, or mains; or (iii) the treatment of water for
4wholesale or retail sale that is delivered to customers through
5pipes, pipelines, or mains. The provisions of this amendatory
6Act of the 98th General Assembly are declaratory of existing
7law as to the meaning and scope of this exemption.
8    (f) Until July 1, 2003, the sale or transfer of
9distillation machinery and equipment, sold as a unit or kit and
10assembled or installed by the retailer, which machinery and
11equipment is certified by the user to be used only for the
12production of ethyl alcohol that will be used for consumption
13as motor fuel or as a component of motor fuel for the personal
14use of such user and not subject to sale or resale.
15    (g) At the election of any serviceman not required to be
16otherwise registered as a retailer under Section 2a of the
17Retailers' Occupation Tax Act, made for each fiscal year sales
18of service in which the aggregate annual cost price of tangible
19personal property transferred as an incident to the sales of
20service is less than 35% (75% in the case of servicemen
21transferring prescription drugs or servicemen engaged in
22graphic arts production) of the aggregate annual total gross
23receipts from all sales of service. The purchase of such
24tangible personal property by the serviceman shall be subject
25to tax under the Retailers' Occupation Tax Act and the Use Tax
26Act. However, if a primary serviceman who has made the election

 

 

HB4300- 741 -LRB099 14379 HLH 38474 b

1described in this paragraph subcontracts service work to a
2secondary serviceman who has also made the election described
3in this paragraph, the primary serviceman does not incur a Use
4Tax liability if the secondary serviceman (i) has paid or will
5pay Use Tax on his or her cost price of any tangible personal
6property transferred to the primary serviceman and (ii)
7certifies that fact in writing to the primary serviceman.
8    Tangible personal property transferred incident to the
9completion of a maintenance agreement is exempt from the tax
10imposed pursuant to this Act.
11    Exemption (e) also includes machinery and equipment used in
12the general maintenance or repair of such exempt machinery and
13equipment or for in-house manufacture of exempt machinery and
14equipment. The machinery and equipment exemption does not
15include machinery and equipment used in (i) the generation of
16electricity for wholesale or retail sale; (ii) the generation
17or treatment of natural or artificial gas for wholesale or
18retail sale that is delivered to customers through pipes,
19pipelines, or mains; or (iii) the treatment of water for
20wholesale or retail sale that is delivered to customers through
21pipes, pipelines, or mains. The provisions of this amendatory
22Act of the 98th General Assembly are declaratory of existing
23law as to the meaning and scope of this exemption. For the
24purposes of exemption (e), each of these terms shall have the
25following meanings: (1) "manufacturing process" shall mean the
26production of any article of tangible personal property,

 

 

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1whether such article is a finished product or an article for
2use in the process of manufacturing or assembling a different
3article of tangible personal property, by procedures commonly
4regarded as manufacturing, processing, fabricating, or
5refining which changes some existing material or materials into
6a material with a different form, use or name. In relation to a
7recognized integrated business composed of a series of
8operations which collectively constitute manufacturing, or
9individually constitute manufacturing operations, the
10manufacturing process shall be deemed to commence with the
11first operation or stage of production in the series, and shall
12not be deemed to end until the completion of the final product
13in the last operation or stage of production in the series; and
14further for purposes of exemption (e), photoprocessing is
15deemed to be a manufacturing process of tangible personal
16property for wholesale or retail sale; (2) "assembling process"
17shall mean the production of any article of tangible personal
18property, whether such article is a finished product or an
19article for use in the process of manufacturing or assembling a
20different article of tangible personal property, by the
21combination of existing materials in a manner commonly regarded
22as assembling which results in a material of a different form,
23use or name; (3) "machinery" shall mean major mechanical
24machines or major components of such machines contributing to a
25manufacturing or assembling process; and (4) "equipment" shall
26include any independent device or tool separate from any

 

 

HB4300- 743 -LRB099 14379 HLH 38474 b

1machinery but essential to an integrated manufacturing or
2assembly process; including computers used primarily in a
3manufacturer's computer assisted design, computer assisted
4manufacturing (CAD/CAM) system; or any subunit or assembly
5comprising a component of any machinery or auxiliary, adjunct
6or attachment parts of machinery, such as tools, dies, jigs,
7fixtures, patterns and molds; or any parts which require
8periodic replacement in the course of normal operation; but
9shall not include hand tools. Equipment includes chemicals or
10chemicals acting as catalysts but only if the chemicals or
11chemicals acting as catalysts effect a direct and immediate
12change upon a product being manufactured or assembled for
13wholesale or retail sale or lease. The purchaser of such
14machinery and equipment who has an active resale registration
15number shall furnish such number to the seller at the time of
16purchase. The purchaser of such machinery and equipment and
17tools without an active resale registration number shall
18furnish to the seller a certificate of exemption for each
19transaction stating facts establishing the exemption for that
20transaction, which certificate shall be available to the
21Department for inspection or audit.
22    Except as provided in Section 2d of this Act, the rolling
23stock exemption applies to rolling stock used by an interstate
24carrier for hire, even just between points in Illinois, if such
25rolling stock transports, for hire, persons whose journeys or
26property whose shipments originate or terminate outside

 

 

HB4300- 744 -LRB099 14379 HLH 38474 b

1Illinois.
2    Any informal rulings, opinions or letters issued by the
3Department in response to an inquiry or request for any opinion
4from any person regarding the coverage and applicability of
5exemption (e) to specific devices shall be published,
6maintained as a public record, and made available for public
7inspection and copying. If the informal ruling, opinion or
8letter contains trade secrets or other confidential
9information, where possible the Department shall delete such
10information prior to publication. Whenever such informal
11rulings, opinions, or letters contain any policy of general
12applicability, the Department shall formulate and adopt such
13policy as a rule in accordance with the provisions of the
14Illinois Administrative Procedure Act.
15    On and after July 1, 1987, no entity otherwise eligible
16under exemption (c) of this Section shall make tax free
17purchases unless it has an active exemption identification
18number issued by the Department.
19    "Serviceman" means any person who is engaged in the
20occupation of making sales of service.
21    "Sale at Retail" means "sale at retail" as defined in the
22Retailers' Occupation Tax Act.
23    "Supplier" means any person who makes sales of tangible
24personal property to servicemen for the purpose of resale as an
25incident to a sale of service.
26(Source: P.A. 98-583, eff. 1-1-14.)
 

 

 

HB4300- 745 -LRB099 14379 HLH 38474 b

1    Section 85-20. The Retailers' Occupation Tax Act is amended
2by changing Section 2-45 as follows:
 
3    (35 ILCS 120/2-45)  (from Ch. 120, par. 441-45)
4    Sec. 2-45. Manufacturing and assembly exemption. The
5manufacturing and assembly machinery and equipment exemption
6includes machinery and equipment that replaces machinery and
7equipment in an existing manufacturing facility as well as
8machinery and equipment that are for use in an expanded or new
9manufacturing facility.
10    The machinery and equipment exemption also includes
11machinery and equipment used in the general maintenance or
12repair of exempt machinery and equipment or for in-house
13manufacture of exempt machinery and equipment. The machinery
14and equipment exemption does not include machinery and
15equipment used in (i) the generation of electricity for
16wholesale or retail sale; (ii) the generation or treatment of
17natural or artificial gas for wholesale or retail sale that is
18delivered to customers through pipes, pipelines, or mains; or
19(iii) the treatment of water for wholesale or retail sale that
20is delivered to customers through pipes, pipelines, or mains.
21The provisions of this amendatory Act of the 98th General
22Assembly are declaratory of existing law as to the meaning and
23scope of this exemption. For the purposes of this exemption,
24terms have the following meanings:

 

 

HB4300- 746 -LRB099 14379 HLH 38474 b

1        (1) "Manufacturing process" means the production of an
2    article of tangible personal property, whether the article
3    is a finished product or an article for use in the process
4    of manufacturing or assembling a different article of
5    tangible personal property, by a procedure commonly
6    regarded as manufacturing, processing, fabricating, or
7    refining that changes some existing material or materials
8    into a material with a different form, use, or name. In
9    relation to a recognized integrated business composed of a
10    series of operations that collectively constitute
11    manufacturing, or individually constitute manufacturing
12    operations, the manufacturing process commences with the
13    first operation or stage of production in the series and
14    does not end until the completion of the final product in
15    the last operation or stage of production in the series.
16    For purposes of this exemption, photoprocessing is a
17    manufacturing process of tangible personal property for
18    wholesale or retail sale.
19        (2) "Assembling process" means the production of an
20    article of tangible personal property, whether the article
21    is a finished product or an article for use in the process
22    of manufacturing or assembling a different article of
23    tangible personal property, by the combination of existing
24    materials in a manner commonly regarded as assembling that
25    results in a material of a different form, use, or name.
26        (3) "Machinery" means major mechanical machines or

 

 

HB4300- 747 -LRB099 14379 HLH 38474 b

1    major components of those machines contributing to a
2    manufacturing or assembling process.
3        (4) "Equipment" includes an independent device or tool
4    separate from machinery but essential to an integrated
5    manufacturing or assembly process; including computers
6    used primarily in a manufacturer's computer assisted
7    design, computer assisted manufacturing (CAD/CAM) system;
8    any subunit or assembly comprising a component of any
9    machinery or auxiliary, adjunct, or attachment parts of
10    machinery, such as tools, dies, jigs, fixtures, patterns,
11    and molds; and any parts that require periodic replacement
12    in the course of normal operation; but does not include
13    hand tools. Equipment includes chemicals or chemicals
14    acting as catalysts but only if the chemicals or chemicals
15    acting as catalysts effect a direct and immediate change
16    upon a product being manufactured or assembled for
17    wholesale or retail sale or lease.
18        (5) "Production related tangible personal property"
19    means all tangible personal property that is used or
20    consumed by the purchaser in a manufacturing facility in
21    which a manufacturing process takes place and includes,
22    without limitation, tangible personal property that is
23    purchased for incorporation into real estate within a
24    manufacturing facility, supplies and consumables used in a
25    manufacturing facility including fuels, coolants,
26    solvents, oils, lubricants, and adhesives, hand tools,

 

 

HB4300- 748 -LRB099 14379 HLH 38474 b

1    protective apparel, and fire and safety equipment used or
2    consumed within a manufacturing facility, and tangible
3    personal property that is used or consumed in activities
4    such as research and development, preproduction material
5    handling, receiving, quality control, inventory control,
6    storage, staging, and packaging for shipping and
7    transportation purposes. "Production related tangible
8    personal property" does not include (i) tangible personal
9    property that is used, within or without a manufacturing
10    facility, in sales, purchasing, accounting, fiscal
11    management, marketing, personnel recruitment or selection,
12    or landscaping or (ii) tangible personal property that is
13    required to be titled or registered with a department,
14    agency, or unit of federal, State, or local government.
15    The manufacturing and assembling machinery and equipment
16exemption includes production related tangible personal
17property that is purchased on or after July 1, 2007 and on or
18before June 30, 2008 and on or after July 1, 2016. The
19exemption for production related tangible personal property
20purchased on or after July 1, 2007 and before June 30, 2008 is
21subject to both of the following limitations:
22        (1) The maximum amount of the exemption for any one
23    taxpayer may not exceed 5% of the purchase price of
24    production related tangible personal property that is
25    purchased on or after July 1, 2007 and on or before June
26    30, 2008. A credit under Section 3-85 of this Act may not

 

 

HB4300- 749 -LRB099 14379 HLH 38474 b

1    be earned by the purchase of production related tangible
2    personal property for which an exemption is received under
3    this Section.
4        (2) The maximum aggregate amount of the exemptions for
5    production related tangible personal property awarded
6    under this Act and the Use Tax Act to all taxpayers may not
7    exceed $10,000,000. If the claims for the exemption exceed
8    $10,000,000, then the Department shall reduce the amount of
9    the exemption to each taxpayer on a pro rata basis.
10The Department shall may adopt rules to implement and
11administer the exemption for production related tangible
12personal property.
13    The manufacturing and assembling machinery and equipment
14exemption includes the sale of materials to a purchaser who
15produces exempted types of machinery, equipment, or tools and
16who rents or leases that machinery, equipment, or tools to a
17manufacturer of tangible personal property. This exemption
18also includes the sale of materials to a purchaser who
19manufactures those materials into an exempted type of
20machinery, equipment, or tools that the purchaser uses himself
21or herself in the manufacturing of tangible personal property.
22The purchaser of the machinery and equipment who has an active
23resale registration number shall furnish that number to the
24seller at the time of purchase. A purchaser of the machinery,
25equipment, and tools without an active resale registration
26number shall furnish to the seller a certificate of exemption

 

 

HB4300- 750 -LRB099 14379 HLH 38474 b

1for each transaction stating facts establishing the exemption
2for that transaction, and that certificate shall be available
3to the Department for inspection or audit. Informal rulings,
4opinions, or letters issued by the Department in response to an
5inquiry or request for an opinion from any person regarding the
6coverage and applicability of this exemption to specific
7devices shall be published, maintained as a public record, and
8made available for public inspection and copying. If the
9informal ruling, opinion, or letter contains trade secrets or
10other confidential information, where possible, the Department
11shall delete that information before publication. Whenever
12informal rulings, opinions, or letters contain a policy of
13general applicability, the Department shall formulate and
14adopt that policy as a rule in accordance with the Illinois
15Administrative Procedure Act.
16(Source: P.A. 98-583, eff. 1-1-14.)
 
17
ARTICLE 90. ANGEL INVESTMENT CREDIT

 
18    Section 90-5. The Illinois Income Tax Act is amended by
19changing Section 220 as follows:
 
20    (35 ILCS 5/220)
21    Sec. 220. Angel investment credit.
22    (a) As used in this Section:
23    "Applicant" means a corporation, partnership, limited

 

 

HB4300- 751 -LRB099 14379 HLH 38474 b

1liability company, or a natural person that makes an investment
2in a qualified new business venture. The term "applicant" does
3not include a corporation, partnership, limited liability
4company, or a natural person who has a direct or indirect
5ownership interest of at least 51% in the profits, capital, or
6value of the investment or a related member.
7    "Claimant" means an applicant certified by the Department
8who files a claim for a credit under this Section.
9    "Department" means the Department of Commerce and Economic
10Opportunity.
11    "Qualified new business venture" means a business that is
12registered with the Department under this Section.
13    "Related member" means a person that, with respect to the
14investment, is any one of the following:
15        (1) An individual, if the individual and the members of
16    the individual's family (as defined in Section 318 of the
17    Internal Revenue Code) own directly, indirectly,
18    beneficially, or constructively, in the aggregate, at
19    least 50% of the value of the outstanding profits, capital,
20    stock, or other ownership interest in the applicant.
21        (2) A partnership, estate, or trust and any partner or
22    beneficiary, if the partnership, estate, or trust and its
23    partners or beneficiaries own directly, indirectly,
24    beneficially, or constructively, in the aggregate, at
25    least 50% of the profits, capital, stock, or other
26    ownership interest in the applicant.

 

 

HB4300- 752 -LRB099 14379 HLH 38474 b

1        (3) A corporation, and any party related to the
2    corporation in a manner that would require an attribution
3    of stock from the corporation under the attribution rules
4    of Section 318 of the Internal Revenue Code, if the
5    applicant and any other related member own, in the
6    aggregate, directly, indirectly, beneficially, or
7    constructively, at least 50% of the value of the
8    corporation's outstanding stock.
9        (4) A corporation and any party related to that
10    corporation in a manner that would require an attribution
11    of stock from the corporation to the party or from the
12    party to the corporation under the attribution rules of
13    Section 318 of the Internal Revenue Code, if the
14    corporation and all such related parties own, in the
15    aggregate, at least 50% of the profits, capital, stock, or
16    other ownership interest in the applicant.
17        (5) A person to or from whom there is attribution of
18    stock ownership in accordance with Section 1563(e) of the
19    Internal Revenue Code, except that for purposes of
20    determining whether a person is a related member under this
21    paragraph, "20%" shall be substituted for "5%" whenever
22    "5%" appears in Section 1563(e) of the Internal Revenue
23    Code.
24    (b) For taxable years beginning after December 31, 2010,
25and ending on or before December 31, 2021 December 31, 2016,
26subject to the limitations provided in this Section, a claimant

 

 

HB4300- 753 -LRB099 14379 HLH 38474 b

1may claim, as a credit against the tax imposed under
2subsections (a) and (b) of Section 201 of this Act, an amount
3equal to 25% of the claimant's investment made directly in a
4qualified new business venture. In order for an investment in a
5qualified new business venture to be eligible for tax credits,
6the business must have applied for and received certification
7under subsection (e) for the taxable year in which the
8investment was made prior to the date on which the investment
9was made. The credit under this Section may not exceed the
10taxpayer's Illinois income tax liability for the taxable year.
11If the amount of the credit exceeds the tax liability for the
12year, the excess may be carried forward and applied to the tax
13liability of the 5 taxable years following the excess credit
14year. The credit shall be applied to the earliest year for
15which there is a tax liability. If there are credits from more
16than one tax year that are available to offset a liability, the
17earlier credit shall be applied first. In the case of a
18partnership or Subchapter S Corporation, the credit is allowed
19to the partners or shareholders in accordance with the
20determination of income and distributive share of income under
21Sections 702 and 704 and Subchapter S of the Internal Revenue
22Code.
23    (c) The maximum amount of an applicant's investment that
24may be used as the basis for a credit under this Section is
25$2,000,000 for each investment made directly in a qualified new
26business venture.

 

 

HB4300- 754 -LRB099 14379 HLH 38474 b

1    (d) The Department shall implement a program to certify an
2applicant for an angel investment credit. Upon satisfactory
3review, the Department shall issue a tax credit certificate
4stating the amount of the tax credit to which the applicant is
5entitled. The Department shall annually certify that the
6claimant's investment has been made and remains in the
7qualified new business venture for no less than 3 years.
8    If an investment for which a claimant is allowed a credit
9under subsection (b) is held by the claimant for less than 3
10years, or, if within that period of time the qualified new
11business venture is moved from the State of Illinois, the
12claimant shall pay to the Department of Revenue, in the manner
13prescribed by the Department of Revenue, the amount of the
14credit that the claimant received related to the investment.
15    (e) The Department shall implement a program to register
16qualified new business ventures for purposes of this Section. A
17business desiring registration shall submit an application to
18the Department in each taxable year for which the business
19desires registration. The Department may register the business
20only if the business satisfies all of the following conditions:
21        (1) it has its headquarters in this State;
22        (2) at least 51% of the employees employed by the
23    business are employed in this State;
24        (3) it has the potential for increasing jobs in this
25    State, increasing capital investment in this State, or
26    both, and either of the following apply:

 

 

HB4300- 755 -LRB099 14379 HLH 38474 b

1            (A) it is principally engaged in innovation in any
2        of the following: manufacturing; biotechnology;
3        nanotechnology; communications; agricultural sciences;
4        clean energy creation or storage technology;
5        processing or assembling products, including medical
6        devices, pharmaceuticals, computer software, computer
7        hardware, semiconductors, other innovative technology
8        products, or other products that are produced using
9        manufacturing methods that are enabled by applying
10        proprietary technology; or providing services that are
11        enabled by applying proprietary technology; or
12            (B) it is undertaking pre-commercialization
13        activity related to proprietary technology that
14        includes conducting research, developing a new product
15        or business process, or developing a service that is
16        principally reliant on applying proprietary
17        technology;
18        (4) it is not principally engaged in real estate
19    development, insurance, banking, lending, lobbying,
20    political consulting, professional services provided by
21    attorneys, accountants, business consultants, physicians,
22    or health care consultants, wholesale or retail trade,
23    leisure, hospitality, transportation, or construction,
24    except construction of power production plants that derive
25    energy from a renewable energy resource, as defined in
26    Section 1 of the Illinois Power Agency Act;

 

 

HB4300- 756 -LRB099 14379 HLH 38474 b

1        (5) at the time it is first certified:
2            (A) it has fewer than 100 employees;
3            (B) it has been in operation in Illinois for not
4        more than 10 consecutive years prior to the year of
5        certification; and
6            (C) it has received not more than $10,000,000 in
7        aggregate private equity investment in cash;
8        (6) (blank); and
9        (7) it has received not more than $4,000,000 in
10    investments that qualified for tax credits under this
11    Section.
12    (f) The Department, in consultation with the Department of
13Revenue, shall adopt rules to administer this Section. The
14aggregate amount of the tax credits that may be claimed under
15this Section for investments made in qualified new business
16ventures shall be limited at $20,000,000 $10,000,000 per
17calendar year.
18    (g) A claimant may not sell or otherwise transfer a credit
19awarded under this Section to another person.
20    (h) On or before March 1 of each year, the Department shall
21report to the Governor and to the General Assembly on the tax
22credit certificates awarded under this Section for the prior
23calendar year.
24        (1) This report must include, for each tax credit
25    certificate awarded:
26            (A) the name of the claimant and the amount of

 

 

HB4300- 757 -LRB099 14379 HLH 38474 b

1        credit awarded or allocated to that claimant;
2            (B) the name and address of the qualified new
3        business venture that received the investment giving
4        rise to the credit and the county in which the
5        qualified new business venture is located; and
6            (C) the date of approval by the Department of the
7        applications for the tax credit certificate.
8        (2) The report must also include:
9            (A) the total number of applicants and amount for
10        tax credit certificates awarded under this Section in
11        the prior calendar year;
12            (B) the total number of applications and amount for
13        which tax credit certificates were issued in the prior
14        calendar year; and
15            (C) the total tax credit certificates and amount
16        authorized under this Section for all calendar years.
17(Source: P.A. 96-939, eff. 1-1-11; 97-507, eff. 8-23-11;
1897-1097, eff. 8-24-12.)
 
19
ARTICLE 95. DATA CENTER EXEMPTION

 
20    Section 95-5. The Department of Revenue Law of the Civil
21Administrative Code of Illinois is amended by adding Section
222505-760 as follows:
 
23    (20 ILCS 2505/2505-760 new)

 

 

HB4300- 758 -LRB099 14379 HLH 38474 b

1    Sec. 2505-760. Data center investment.
2    (a) The Department shall issue certificates of exemption
3from the Retailers' Occupation Tax Act, the Use Tax Act, the
4Service Use Tax Act, the Service Occupation Tax Act, and the
5Electricity Excise Tax Act to qualifying new or existing
6Illinois data centers.
7    (b) Definitions:
8        For purposes of this Act, "data center" means a
9    building or a series of buildings rehabilitated or
10    constructed to house a group of networked server computers
11    in one physical location or several sites in order to
12    centralize the storage, management, and dissemination of
13    data and information.
14        A "qualifying Illinois data center" means a data center
15    that is located in Illinois and which results in either:
16            (1) a capital investment on or after July 1, 2016
17        of at least $15,000,000, collectively, by the data
18        center operator and the tenants of the data center over
19        a period of 48 months; or
20            (2) a new capital investment on or after July 1,
21        2016 of at least $5,000,000 but not more than
22        $15,000,000, collectively, by the data center operator
23        and the tenants of the data center over a period of 48
24        months, in which case the data center will qualify for
25        50% of all exemption amounts; and
26            (3) results in the creation, on or after July 1,

 

 

HB4300- 759 -LRB099 14379 HLH 38474 b

1        2016 and over a period of 48 months, of at least 10
2        full-time or full-time equivalent new jobs by the data
3        center operator and the tenants of the data center,
4        collectively, associated with the operation or
5        maintenance of the data center.
6        "Full-time equivalent job" means a job in which the new
7    employee works for the owner, operator, or tenant of a data
8    center or for a corporation under contract with the owner,
9    operator or tenant of a data center at a rate of at least
10    35 hours per week. An owner, operator, or tenant who
11    employs labor or services at a specific site or facility
12    under contract with another may declare one full-time,
13    permanent job for every 1,820 man hours worked per year
14    under that contract. Vacations, paid holidays, and sick
15    time are included in this computation. Overtime is not
16    considered a part of regular hours.
17    (c) Data centers seeking qualification for a facility shall
18apply to the Department in the manner specified by the
19Department. The Department and any qualifying person seeking to
20claim the exemption, including a data center operator on behalf
21of itself and its tenants, must enter into a memorandum of
22understanding that, at a minimum, provides the details for
23determining the amount of capital investment made and the
24number of new jobs created, the timeline for achieving the
25capital investment and new job goals, the repayment obligation
26should those goals not be achieved, and any conditions under

 

 

HB4300- 760 -LRB099 14379 HLH 38474 b

1which repayment by the qualifying data center or data center
2tenant claiming the exemption may be required.
3    (d) In addition, the exemption shall apply to any such
4computer equipment or enabling equipment, software purchased
5or leased to upgrade, supplement, or replace computer equipment
6or enabling software purchased or leased in the initial
7investment. A data center that would have qualified under
8subsection (b) prior to July 1, 2016, may apply for and obtain
9an exemption for subsequent purchases of computer equipment or
10enabling software purchased or leased to upgrade, supplement,
11or replace computer equipment or enabling software purchased or
12leased in the original investment that would have qualified
13under subsection (b).
14    (e) Beginning July 15, 2017, and each year thereafter until
15July 1, 2027, the Department shall annually compile a report on
16the outcomes and effectiveness of this Section.
 
17    Section 95-10. The Use Tax Act is amended by changing
18Section 3-5 as follows:
 
19    (35 ILCS 105/3-5)
20    Sec. 3-5. Exemptions. Use of the following tangible
21personal property is exempt from the tax imposed by this Act:
22    (1) Personal property purchased from a corporation,
23society, association, foundation, institution, or
24organization, other than a limited liability company, that is

 

 

HB4300- 761 -LRB099 14379 HLH 38474 b

1organized and operated as a not-for-profit service enterprise
2for the benefit of persons 65 years of age or older if the
3personal property was not purchased by the enterprise for the
4purpose of resale by the enterprise.
5    (2) Personal property purchased by a not-for-profit
6Illinois county fair association for use in conducting,
7operating, or promoting the county fair.
8    (3) Personal property purchased by a not-for-profit arts or
9cultural organization that establishes, by proof required by
10the Department by rule, that it has received an exemption under
11Section 501(c)(3) of the Internal Revenue Code and that is
12organized and operated primarily for the presentation or
13support of arts or cultural programming, activities, or
14services. These organizations include, but are not limited to,
15music and dramatic arts organizations such as symphony
16orchestras and theatrical groups, arts and cultural service
17organizations, local arts councils, visual arts organizations,
18and media arts organizations. On and after the effective date
19of this amendatory Act of the 92nd General Assembly, however,
20an entity otherwise eligible for this exemption shall not make
21tax-free purchases unless it has an active identification
22number issued by the Department.
23    (4) Personal property purchased by a governmental body, by
24a corporation, society, association, foundation, or
25institution organized and operated exclusively for charitable,
26religious, or educational purposes, or by a not-for-profit

 

 

HB4300- 762 -LRB099 14379 HLH 38474 b

1corporation, society, association, foundation, institution, or
2organization that has no compensated officers or employees and
3that is organized and operated primarily for the recreation of
4persons 55 years of age or older. A limited liability company
5may qualify for the exemption under this paragraph only if the
6limited liability company is organized and operated
7exclusively for educational purposes. On and after July 1,
81987, however, no entity otherwise eligible for this exemption
9shall make tax-free purchases unless it has an active exemption
10identification number issued by the Department.
11    (5) Until July 1, 2003, a passenger car that is a
12replacement vehicle to the extent that the purchase price of
13the car is subject to the Replacement Vehicle Tax.
14    (6) Until July 1, 2003 and beginning again on September 1,
152004 through August 30, 2014, graphic arts machinery and
16equipment, including repair and replacement parts, both new and
17used, and including that manufactured on special order,
18certified by the purchaser to be used primarily for graphic
19arts production, and including machinery and equipment
20purchased for lease. Equipment includes chemicals or chemicals
21acting as catalysts but only if the chemicals or chemicals
22acting as catalysts effect a direct and immediate change upon a
23graphic arts product.
24    (7) Farm chemicals.
25    (8) Legal tender, currency, medallions, or gold or silver
26coinage issued by the State of Illinois, the government of the

 

 

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1United States of America, or the government of any foreign
2country, and bullion.
3    (9) Personal property purchased from a teacher-sponsored
4student organization affiliated with an elementary or
5secondary school located in Illinois.
6    (10) A motor vehicle that is used for automobile renting,
7as defined in the Automobile Renting Occupation and Use Tax
8Act.
9    (11) Farm machinery and equipment, both new and used,
10including that manufactured on special order, certified by the
11purchaser to be used primarily for production agriculture or
12State or federal agricultural programs, including individual
13replacement parts for the machinery and equipment, including
14machinery and equipment purchased for lease, and including
15implements of husbandry defined in Section 1-130 of the
16Illinois Vehicle Code, farm machinery and agricultural
17chemical and fertilizer spreaders, and nurse wagons required to
18be registered under Section 3-809 of the Illinois Vehicle Code,
19but excluding other motor vehicles required to be registered
20under the Illinois Vehicle Code. Horticultural polyhouses or
21hoop houses used for propagating, growing, or overwintering
22plants shall be considered farm machinery and equipment under
23this item (11). Agricultural chemical tender tanks and dry
24boxes shall include units sold separately from a motor vehicle
25required to be licensed and units sold mounted on a motor
26vehicle required to be licensed if the selling price of the

 

 

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1tender is separately stated.
2    Farm machinery and equipment shall include precision
3farming equipment that is installed or purchased to be
4installed on farm machinery and equipment including, but not
5limited to, tractors, harvesters, sprayers, planters, seeders,
6or spreaders. Precision farming equipment includes, but is not
7limited to, soil testing sensors, computers, monitors,
8software, global positioning and mapping systems, and other
9such equipment.
10    Farm machinery and equipment also includes computers,
11sensors, software, and related equipment used primarily in the
12computer-assisted operation of production agriculture
13facilities, equipment, and activities such as, but not limited
14to, the collection, monitoring, and correlation of animal and
15crop data for the purpose of formulating animal diets and
16agricultural chemicals. This item (11) is exempt from the
17provisions of Section 3-90.
18    (12) Until June 30, 2013, fuel and petroleum products sold
19to or used by an air common carrier, certified by the carrier
20to be used for consumption, shipment, or storage in the conduct
21of its business as an air common carrier, for a flight destined
22for or returning from a location or locations outside the
23United States without regard to previous or subsequent domestic
24stopovers.
25    Beginning July 1, 2013, fuel and petroleum products sold to
26or used by an air carrier, certified by the carrier to be used

 

 

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1for consumption, shipment, or storage in the conduct of its
2business as an air common carrier, for a flight that (i) is
3engaged in foreign trade or is engaged in trade between the
4United States and any of its possessions and (ii) transports at
5least one individual or package for hire from the city of
6origination to the city of final destination on the same
7aircraft, without regard to a change in the flight number of
8that aircraft.
9    (13) Proceeds of mandatory service charges separately
10stated on customers' bills for the purchase and consumption of
11food and beverages purchased at retail from a retailer, to the
12extent that the proceeds of the service charge are in fact
13turned over as tips or as a substitute for tips to the
14employees who participate directly in preparing, serving,
15hosting or cleaning up the food or beverage function with
16respect to which the service charge is imposed.
17    (14) Until July 1, 2003, oil field exploration, drilling,
18and production equipment, including (i) rigs and parts of rigs,
19rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
20tubular goods, including casing and drill strings, (iii) pumps
21and pump-jack units, (iv) storage tanks and flow lines, (v) any
22individual replacement part for oil field exploration,
23drilling, and production equipment, and (vi) machinery and
24equipment purchased for lease; but excluding motor vehicles
25required to be registered under the Illinois Vehicle Code.
26    (15) Photoprocessing machinery and equipment, including

 

 

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1repair and replacement parts, both new and used, including that
2manufactured on special order, certified by the purchaser to be
3used primarily for photoprocessing, and including
4photoprocessing machinery and equipment purchased for lease.
5    (16) Coal and aggregate exploration, mining, off-highway
6hauling, processing, maintenance, and reclamation equipment,
7including replacement parts and equipment, and including
8equipment purchased for lease, but excluding motor vehicles
9required to be registered under the Illinois Vehicle Code. The
10changes made to this Section by Public Act 97-767 apply on and
11after July 1, 2003, but no claim for credit or refund is
12allowed on or after August 16, 2013 (the effective date of
13Public Act 98-456) for such taxes paid during the period
14beginning July 1, 2003 and ending on August 16, 2013 (the
15effective date of Public Act 98-456).
16    (17) Until July 1, 2003, distillation machinery and
17equipment, sold as a unit or kit, assembled or installed by the
18retailer, certified by the user to be used only for the
19production of ethyl alcohol that will be used for consumption
20as motor fuel or as a component of motor fuel for the personal
21use of the user, and not subject to sale or resale.
22    (18) Manufacturing and assembling machinery and equipment
23used primarily in the process of manufacturing or assembling
24tangible personal property for wholesale or retail sale or
25lease, whether that sale or lease is made directly by the
26manufacturer or by some other person, whether the materials

 

 

HB4300- 767 -LRB099 14379 HLH 38474 b

1used in the process are owned by the manufacturer or some other
2person, or whether that sale or lease is made apart from or as
3an incident to the seller's engaging in the service occupation
4of producing machines, tools, dies, jigs, patterns, gauges, or
5other similar items of no commercial value on special order for
6a particular purchaser. The exemption provided by this
7paragraph (18) does not include machinery and equipment used in
8(i) the generation of electricity for wholesale or retail sale;
9(ii) the generation or treatment of natural or artificial gas
10for wholesale or retail sale that is delivered to customers
11through pipes, pipelines, or mains; or (iii) the treatment of
12water for wholesale or retail sale that is delivered to
13customers through pipes, pipelines, or mains. The provisions of
14Public Act 98-583 are declaratory of existing law as to the
15meaning and scope of this exemption.
16    (19) Personal property delivered to a purchaser or
17purchaser's donee inside Illinois when the purchase order for
18that personal property was received by a florist located
19outside Illinois who has a florist located inside Illinois
20deliver the personal property.
21    (20) Semen used for artificial insemination of livestock
22for direct agricultural production.
23    (21) Horses, or interests in horses, registered with and
24meeting the requirements of any of the Arabian Horse Club
25Registry of America, Appaloosa Horse Club, American Quarter
26Horse Association, United States Trotting Association, or

 

 

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1Jockey Club, as appropriate, used for purposes of breeding or
2racing for prizes. This item (21) is exempt from the provisions
3of Section 3-90, and the exemption provided for under this item
4(21) applies for all periods beginning May 30, 1995, but no
5claim for credit or refund is allowed on or after January 1,
62008 for such taxes paid during the period beginning May 30,
72000 and ending on January 1, 2008.
8    (22) Computers and communications equipment utilized for
9any hospital purpose and equipment used in the diagnosis,
10analysis, or treatment of hospital patients purchased by a
11lessor who leases the equipment, under a lease of one year or
12longer executed or in effect at the time the lessor would
13otherwise be subject to the tax imposed by this Act, to a
14hospital that has been issued an active tax exemption
15identification number by the Department under Section 1g of the
16Retailers' Occupation Tax Act. If the equipment is leased in a
17manner that does not qualify for this exemption or is used in
18any other non-exempt manner, the lessor shall be liable for the
19tax imposed under this Act or the Service Use Tax Act, as the
20case may be, based on the fair market value of the property at
21the time the non-qualifying use occurs. No lessor shall collect
22or attempt to collect an amount (however designated) that
23purports to reimburse that lessor for the tax imposed by this
24Act or the Service Use Tax Act, as the case may be, if the tax
25has not been paid by the lessor. If a lessor improperly
26collects any such amount from the lessee, the lessee shall have

 

 

HB4300- 769 -LRB099 14379 HLH 38474 b

1a legal right to claim a refund of that amount from the lessor.
2If, however, that amount is not refunded to the lessee for any
3reason, the lessor is liable to pay that amount to the
4Department.
5    (23) Personal property purchased by a lessor who leases the
6property, under a lease of one year or longer executed or in
7effect at the time the lessor would otherwise be subject to the
8tax imposed by this Act, to a governmental body that has been
9issued an active sales tax exemption identification number by
10the Department under Section 1g of the Retailers' Occupation
11Tax Act. If the property is leased in a manner that does not
12qualify for this exemption or used in any other non-exempt
13manner, the lessor shall be liable for the tax imposed under
14this Act or the Service Use Tax Act, as the case may be, based
15on the fair market value of the property at the time the
16non-qualifying use occurs. No lessor shall collect or attempt
17to collect an amount (however designated) that purports to
18reimburse that lessor for the tax imposed by this Act or the
19Service Use Tax Act, as the case may be, if the tax has not been
20paid by the lessor. If a lessor improperly collects any such
21amount from the lessee, the lessee shall have a legal right to
22claim a refund of that amount from the lessor. If, however,
23that amount is not refunded to the lessee for any reason, the
24lessor is liable to pay that amount to the Department.
25    (24) Beginning with taxable years ending on or after
26December 31, 1995 and ending with taxable years ending on or

 

 

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1before December 31, 2004, personal property that is donated for
2disaster relief to be used in a State or federally declared
3disaster area in Illinois or bordering Illinois by a
4manufacturer or retailer that is registered in this State to a
5corporation, society, association, foundation, or institution
6that has been issued a sales tax exemption identification
7number by the Department that assists victims of the disaster
8who reside within the declared disaster area.
9    (25) Beginning with taxable years ending on or after
10December 31, 1995 and ending with taxable years ending on or
11before December 31, 2004, personal property that is used in the
12performance of infrastructure repairs in this State, including
13but not limited to municipal roads and streets, access roads,
14bridges, sidewalks, waste disposal systems, water and sewer
15line extensions, water distribution and purification
16facilities, storm water drainage and retention facilities, and
17sewage treatment facilities, resulting from a State or
18federally declared disaster in Illinois or bordering Illinois
19when such repairs are initiated on facilities located in the
20declared disaster area within 6 months after the disaster.
21    (26) Beginning July 1, 1999, game or game birds purchased
22at a "game breeding and hunting preserve area" as that term is
23used in the Wildlife Code. This paragraph is exempt from the
24provisions of Section 3-90.
25    (27) A motor vehicle, as that term is defined in Section
261-146 of the Illinois Vehicle Code, that is donated to a

 

 

HB4300- 771 -LRB099 14379 HLH 38474 b

1corporation, limited liability company, society, association,
2foundation, or institution that is determined by the Department
3to be organized and operated exclusively for educational
4purposes. For purposes of this exemption, "a corporation,
5limited liability company, society, association, foundation,
6or institution organized and operated exclusively for
7educational purposes" means all tax-supported public schools,
8private schools that offer systematic instruction in useful
9branches of learning by methods common to public schools and
10that compare favorably in their scope and intensity with the
11course of study presented in tax-supported schools, and
12vocational or technical schools or institutes organized and
13operated exclusively to provide a course of study of not less
14than 6 weeks duration and designed to prepare individuals to
15follow a trade or to pursue a manual, technical, mechanical,
16industrial, business, or commercial occupation.
17    (28) Beginning January 1, 2000, personal property,
18including food, purchased through fundraising events for the
19benefit of a public or private elementary or secondary school,
20a group of those schools, or one or more school districts if
21the events are sponsored by an entity recognized by the school
22district that consists primarily of volunteers and includes
23parents and teachers of the school children. This paragraph
24does not apply to fundraising events (i) for the benefit of
25private home instruction or (ii) for which the fundraising
26entity purchases the personal property sold at the events from

 

 

HB4300- 772 -LRB099 14379 HLH 38474 b

1another individual or entity that sold the property for the
2purpose of resale by the fundraising entity and that profits
3from the sale to the fundraising entity. This paragraph is
4exempt from the provisions of Section 3-90.
5    (29) Beginning January 1, 2000 and through December 31,
62001, new or used automatic vending machines that prepare and
7serve hot food and beverages, including coffee, soup, and other
8items, and replacement parts for these machines. Beginning
9January 1, 2002 and through June 30, 2003, machines and parts
10for machines used in commercial, coin-operated amusement and
11vending business if a use or occupation tax is paid on the
12gross receipts derived from the use of the commercial,
13coin-operated amusement and vending machines. This paragraph
14is exempt from the provisions of Section 3-90.
15    (30) Beginning January 1, 2001 and through June 30, 2016,
16food for human consumption that is to be consumed off the
17premises where it is sold (other than alcoholic beverages, soft
18drinks, and food that has been prepared for immediate
19consumption) and prescription and nonprescription medicines,
20drugs, medical appliances, and insulin, urine testing
21materials, syringes, and needles used by diabetics, for human
22use, when purchased for use by a person receiving medical
23assistance under Article V of the Illinois Public Aid Code who
24resides in a licensed long-term care facility, as defined in
25the Nursing Home Care Act, or in a licensed facility as defined
26in the ID/DD Community Care Act, the MC/DD Act, or the

 

 

HB4300- 773 -LRB099 14379 HLH 38474 b

1Specialized Mental Health Rehabilitation Act of 2013.
2    (31) Beginning on the effective date of this amendatory Act
3of the 92nd General Assembly, computers and communications
4equipment utilized for any hospital purpose and equipment used
5in the diagnosis, analysis, or treatment of hospital patients
6purchased by a lessor who leases the equipment, under a lease
7of one year or longer executed or in effect at the time the
8lessor would otherwise be subject to the tax imposed by this
9Act, to a hospital that has been issued an active tax exemption
10identification number by the Department under Section 1g of the
11Retailers' Occupation Tax Act. If the equipment is leased in a
12manner that does not qualify for this exemption or is used in
13any other nonexempt manner, the lessor shall be liable for the
14tax imposed under this Act or the Service Use Tax Act, as the
15case may be, based on the fair market value of the property at
16the time the nonqualifying use occurs. No lessor shall collect
17or attempt to collect an amount (however designated) that
18purports to reimburse that lessor for the tax imposed by this
19Act or the Service Use Tax Act, as the case may be, if the tax
20has not been paid by the lessor. If a lessor improperly
21collects any such amount from the lessee, the lessee shall have
22a legal right to claim a refund of that amount from the lessor.
23If, however, that amount is not refunded to the lessee for any
24reason, the lessor is liable to pay that amount to the
25Department. This paragraph is exempt from the provisions of
26Section 3-90.

 

 

HB4300- 774 -LRB099 14379 HLH 38474 b

1    (32) Beginning on the effective date of this amendatory Act
2of the 92nd General Assembly, personal property purchased by a
3lessor who leases the property, under a lease of one year or
4longer executed or in effect at the time the lessor would
5otherwise be subject to the tax imposed by this Act, to a
6governmental body that has been issued an active sales tax
7exemption identification number by the Department under
8Section 1g of the Retailers' Occupation Tax Act. If the
9property is leased in a manner that does not qualify for this
10exemption or used in any other nonexempt manner, the lessor
11shall be liable for the tax imposed under this Act or the
12Service Use Tax Act, as the case may be, based on the fair
13market value of the property at the time the nonqualifying use
14occurs. No lessor shall collect or attempt to collect an amount
15(however designated) that purports to reimburse that lessor for
16the tax imposed by this Act or the Service Use Tax Act, as the
17case may be, if the tax has not been paid by the lessor. If a
18lessor improperly collects any such amount from the lessee, the
19lessee shall have a legal right to claim a refund of that
20amount from the lessor. If, however, that amount is not
21refunded to the lessee for any reason, the lessor is liable to
22pay that amount to the Department. This paragraph is exempt
23from the provisions of Section 3-90.
24    (33) On and after July 1, 2003 and through June 30, 2004,
25the use in this State of motor vehicles of the second division
26with a gross vehicle weight in excess of 8,000 pounds and that

 

 

HB4300- 775 -LRB099 14379 HLH 38474 b

1are subject to the commercial distribution fee imposed under
2Section 3-815.1 of the Illinois Vehicle Code. Beginning on July
31, 2004 and through June 30, 2005, the use in this State of
4motor vehicles of the second division: (i) with a gross vehicle
5weight rating in excess of 8,000 pounds; (ii) that are subject
6to the commercial distribution fee imposed under Section
73-815.1 of the Illinois Vehicle Code; and (iii) that are
8primarily used for commercial purposes. Through June 30, 2005,
9this exemption applies to repair and replacement parts added
10after the initial purchase of such a motor vehicle if that
11motor vehicle is used in a manner that would qualify for the
12rolling stock exemption otherwise provided for in this Act. For
13purposes of this paragraph, the term "used for commercial
14purposes" means the transportation of persons or property in
15furtherance of any commercial or industrial enterprise,
16whether for-hire or not.
17    (34) Beginning January 1, 2008, tangible personal property
18used in the construction or maintenance of a community water
19supply, as defined under Section 3.145 of the Environmental
20Protection Act, that is operated by a not-for-profit
21corporation that holds a valid water supply permit issued under
22Title IV of the Environmental Protection Act. This paragraph is
23exempt from the provisions of Section 3-90.
24    (35) Beginning January 1, 2010, materials, parts,
25equipment, components, and furnishings incorporated into or
26upon an aircraft as part of the modification, refurbishment,

 

 

HB4300- 776 -LRB099 14379 HLH 38474 b

1completion, replacement, repair, or maintenance of the
2aircraft. This exemption includes consumable supplies used in
3the modification, refurbishment, completion, replacement,
4repair, and maintenance of aircraft, but excludes any
5materials, parts, equipment, components, and consumable
6supplies used in the modification, replacement, repair, and
7maintenance of aircraft engines or power plants, whether such
8engines or power plants are installed or uninstalled upon any
9such aircraft. "Consumable supplies" include, but are not
10limited to, adhesive, tape, sandpaper, general purpose
11lubricants, cleaning solution, latex gloves, and protective
12films. This exemption applies only to the use of qualifying
13tangible personal property by persons who modify, refurbish,
14complete, repair, replace, or maintain aircraft and who (i)
15hold an Air Agency Certificate and are empowered to operate an
16approved repair station by the Federal Aviation
17Administration, (ii) have a Class IV Rating, and (iii) conduct
18operations in accordance with Part 145 of the Federal Aviation
19Regulations. The exemption does not include aircraft operated
20by a commercial air carrier providing scheduled passenger air
21service pursuant to authority issued under Part 121 or Part 129
22of the Federal Aviation Regulations. The changes made to this
23paragraph (35) by Public Act 98-534 are declarative of existing
24law.
25    (36) Tangible personal property purchased by a
26public-facilities corporation, as described in Section

 

 

HB4300- 777 -LRB099 14379 HLH 38474 b

111-65-10 of the Illinois Municipal Code, for purposes of
2constructing or furnishing a municipal convention hall, but
3only if the legal title to the municipal convention hall is
4transferred to the municipality without any further
5consideration by or on behalf of the municipality at the time
6of the completion of the municipal convention hall or upon the
7retirement or redemption of any bonds or other debt instruments
8issued by the public-facilities corporation in connection with
9the development of the municipal convention hall. This
10exemption includes existing public-facilities corporations as
11provided in Section 11-65-25 of the Illinois Municipal Code.
12This paragraph is exempt from the provisions of Section 3-90.
13    (37) Beginning on July 1, 2016 and until July 1, 2021,
14qualified tangible personal property used in the construction
15or operation of a new or existing data center that has been
16granted a certificate of exemption by the Department under
17Section 2505-760 of the Department of Revenue Law of the Civil
18Administrative Code of Illinois, whether that tangible
19personal property is purchased by the owner of the data center
20or by a contractor, subcontractor, or tenant of the owner.
21    For the purposes of this item (37):
22        "Data Center" has the meaning ascribed to that term in
23    Section 2505-760 of the Department of Revenue Law of the
24    Civil Administrative Code of Illinois.
25        "Qualified tangible personal property" means
26    electrical systems and equipment; mechanical systems and

 

 

HB4300- 778 -LRB099 14379 HLH 38474 b

1    equipment; emergency generators; hardware or distributed
2    computers or servers; data storage devices; network
3    connectivity equipment; racks; cabinets; raised floor
4    systems; peripheral components or systems; software;
5    mechanical, electrical, or plumbing systems necessary to
6    operate other items of tangible personal property,
7    including fixtures; and component parts of any of the
8    foregoing, including installation, maintenance, repair,
9    refurbishment, and replacement of qualified tangible
10    personal property. The term "qualified tangible personal
11    property" also includes building materials physically
12    incorporated in to the qualifying data center. To document
13    the exemption allowed under this Section, the retailer must
14    obtain from the purchaser a copy of the Certificate of
15    Eligibility for Sales Tax Exemption issued by the
16    Department.
17(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
1898-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.
191-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.
207-29-15.)
 
21    Section 95-15. The Service Use Tax Act is amended by
22changing Section 3-5 as follows:
 
23    (35 ILCS 110/3-5)
24    Sec. 3-5. Exemptions. Use of the following tangible

 

 

HB4300- 779 -LRB099 14379 HLH 38474 b

1personal property is exempt from the tax imposed by this Act:
2    (1) Personal property purchased from a corporation,
3society, association, foundation, institution, or
4organization, other than a limited liability company, that is
5organized and operated as a not-for-profit service enterprise
6for the benefit of persons 65 years of age or older if the
7personal property was not purchased by the enterprise for the
8purpose of resale by the enterprise.
9    (2) Personal property purchased by a non-profit Illinois
10county fair association for use in conducting, operating, or
11promoting the county fair.
12    (3) Personal property purchased by a not-for-profit arts or
13cultural organization that establishes, by proof required by
14the Department by rule, that it has received an exemption under
15Section 501(c)(3) of the Internal Revenue Code and that is
16organized and operated primarily for the presentation or
17support of arts or cultural programming, activities, or
18services. These organizations include, but are not limited to,
19music and dramatic arts organizations such as symphony
20orchestras and theatrical groups, arts and cultural service
21organizations, local arts councils, visual arts organizations,
22and media arts organizations. On and after the effective date
23of this amendatory Act of the 92nd General Assembly, however,
24an entity otherwise eligible for this exemption shall not make
25tax-free purchases unless it has an active identification
26number issued by the Department.

 

 

HB4300- 780 -LRB099 14379 HLH 38474 b

1    (4) Legal tender, currency, medallions, or gold or silver
2coinage issued by the State of Illinois, the government of the
3United States of America, or the government of any foreign
4country, and bullion.
5    (5) Until July 1, 2003 and beginning again on September 1,
62004 through August 30, 2014, graphic arts machinery and
7equipment, including repair and replacement parts, both new and
8used, and including that manufactured on special order or
9purchased for lease, certified by the purchaser to be used
10primarily for graphic arts production. Equipment includes
11chemicals or chemicals acting as catalysts but only if the
12chemicals or chemicals acting as catalysts effect a direct and
13immediate change upon a graphic arts product.
14    (6) Personal property purchased from a teacher-sponsored
15student organization affiliated with an elementary or
16secondary school located in Illinois.
17    (7) Farm machinery and equipment, both new and used,
18including that manufactured on special order, certified by the
19purchaser to be used primarily for production agriculture or
20State or federal agricultural programs, including individual
21replacement parts for the machinery and equipment, including
22machinery and equipment purchased for lease, and including
23implements of husbandry defined in Section 1-130 of the
24Illinois Vehicle Code, farm machinery and agricultural
25chemical and fertilizer spreaders, and nurse wagons required to
26be registered under Section 3-809 of the Illinois Vehicle Code,

 

 

HB4300- 781 -LRB099 14379 HLH 38474 b

1but excluding other motor vehicles required to be registered
2under the Illinois Vehicle Code. Horticultural polyhouses or
3hoop houses used for propagating, growing, or overwintering
4plants shall be considered farm machinery and equipment under
5this item (7). Agricultural chemical tender tanks and dry boxes
6shall include units sold separately from a motor vehicle
7required to be licensed and units sold mounted on a motor
8vehicle required to be licensed if the selling price of the
9tender is separately stated.
10    Farm machinery and equipment shall include precision
11farming equipment that is installed or purchased to be
12installed on farm machinery and equipment including, but not
13limited to, tractors, harvesters, sprayers, planters, seeders,
14or spreaders. Precision farming equipment includes, but is not
15limited to, soil testing sensors, computers, monitors,
16software, global positioning and mapping systems, and other
17such equipment.
18    Farm machinery and equipment also includes computers,
19sensors, software, and related equipment used primarily in the
20computer-assisted operation of production agriculture
21facilities, equipment, and activities such as, but not limited
22to, the collection, monitoring, and correlation of animal and
23crop data for the purpose of formulating animal diets and
24agricultural chemicals. This item (7) is exempt from the
25provisions of Section 3-75.
26    (8) Until June 30, 2013, fuel and petroleum products sold

 

 

HB4300- 782 -LRB099 14379 HLH 38474 b

1to or used by an air common carrier, certified by the carrier
2to be used for consumption, shipment, or storage in the conduct
3of its business as an air common carrier, for a flight destined
4for or returning from a location or locations outside the
5United States without regard to previous or subsequent domestic
6stopovers.
7    Beginning July 1, 2013, fuel and petroleum products sold to
8or used by an air carrier, certified by the carrier to be used
9for consumption, shipment, or storage in the conduct of its
10business as an air common carrier, for a flight that (i) is
11engaged in foreign trade or is engaged in trade between the
12United States and any of its possessions and (ii) transports at
13least one individual or package for hire from the city of
14origination to the city of final destination on the same
15aircraft, without regard to a change in the flight number of
16that aircraft.
17    (9) Proceeds of mandatory service charges separately
18stated on customers' bills for the purchase and consumption of
19food and beverages acquired as an incident to the purchase of a
20service from a serviceman, to the extent that the proceeds of
21the service charge are in fact turned over as tips or as a
22substitute for tips to the employees who participate directly
23in preparing, serving, hosting or cleaning up the food or
24beverage function with respect to which the service charge is
25imposed.
26    (10) Until July 1, 2003, oil field exploration, drilling,

 

 

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1and production equipment, including (i) rigs and parts of rigs,
2rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
3tubular goods, including casing and drill strings, (iii) pumps
4and pump-jack units, (iv) storage tanks and flow lines, (v) any
5individual replacement part for oil field exploration,
6drilling, and production equipment, and (vi) machinery and
7equipment purchased for lease; but excluding motor vehicles
8required to be registered under the Illinois Vehicle Code.
9    (11) Proceeds from the sale of photoprocessing machinery
10and equipment, including repair and replacement parts, both new
11and used, including that manufactured on special order,
12certified by the purchaser to be used primarily for
13photoprocessing, and including photoprocessing machinery and
14equipment purchased for lease.
15    (12) Coal and aggregate exploration, mining, off-highway
16hauling, processing, maintenance, and reclamation equipment,
17including replacement parts and equipment, and including
18equipment purchased for lease, but excluding motor vehicles
19required to be registered under the Illinois Vehicle Code. The
20changes made to this Section by Public Act 97-767 apply on and
21after July 1, 2003, but no claim for credit or refund is
22allowed on or after August 16, 2013 (the effective date of
23Public Act 98-456) for such taxes paid during the period
24beginning July 1, 2003 and ending on August 16, 2013 (the
25effective date of Public Act 98-456).
26    (13) Semen used for artificial insemination of livestock

 

 

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1for direct agricultural production.
2    (14) Horses, or interests in horses, registered with and
3meeting the requirements of any of the Arabian Horse Club
4Registry of America, Appaloosa Horse Club, American Quarter
5Horse Association, United States Trotting Association, or
6Jockey Club, as appropriate, used for purposes of breeding or
7racing for prizes. This item (14) is exempt from the provisions
8of Section 3-75, and the exemption provided for under this item
9(14) applies for all periods beginning May 30, 1995, but no
10claim for credit or refund is allowed on or after the effective
11date of this amendatory Act of the 95th General Assembly for
12such taxes paid during the period beginning May 30, 2000 and
13ending on the effective date of this amendatory Act of the 95th
14General Assembly.
15    (15) Computers and communications equipment utilized for
16any hospital purpose and equipment used in the diagnosis,
17analysis, or treatment of hospital patients purchased by a
18lessor who leases the equipment, under a lease of one year or
19longer executed or in effect at the time the lessor would
20otherwise be subject to the tax imposed by this Act, to a
21hospital that has been issued an active tax exemption
22identification number by the Department under Section 1g of the
23Retailers' Occupation Tax Act. If the equipment is leased in a
24manner that does not qualify for this exemption or is used in
25any other non-exempt manner, the lessor shall be liable for the
26tax imposed under this Act or the Use Tax Act, as the case may

 

 

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1be, based on the fair market value of the property at the time
2the non-qualifying use occurs. No lessor shall collect or
3attempt to collect an amount (however designated) that purports
4to reimburse that lessor for the tax imposed by this Act or the
5Use Tax Act, as the case may be, if the tax has not been paid by
6the lessor. If a lessor improperly collects any such amount
7from the lessee, the lessee shall have a legal right to claim a
8refund of that amount from the lessor. If, however, that amount
9is not refunded to the lessee for any reason, the lessor is
10liable to pay that amount to the Department.
11    (16) Personal property purchased by a lessor who leases the
12property, under a lease of one year or longer executed or in
13effect at the time the lessor would otherwise be subject to the
14tax imposed by this Act, to a governmental body that has been
15issued an active tax exemption identification number by the
16Department under Section 1g of the Retailers' Occupation Tax
17Act. If the property is leased in a manner that does not
18qualify for this exemption or is used in any other non-exempt
19manner, the lessor shall be liable for the tax imposed under
20this Act or the Use Tax Act, as the case may be, based on the
21fair market value of the property at the time the
22non-qualifying use occurs. No lessor shall collect or attempt
23to collect an amount (however designated) that purports to
24reimburse that lessor for the tax imposed by this Act or the
25Use Tax Act, as the case may be, if the tax has not been paid by
26the lessor. If a lessor improperly collects any such amount

 

 

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1from the lessee, the lessee shall have a legal right to claim a
2refund of that amount from the lessor. If, however, that amount
3is not refunded to the lessee for any reason, the lessor is
4liable to pay that amount to the Department.
5    (17) Beginning with taxable years ending on or after
6December 31, 1995 and ending with taxable years ending on or
7before December 31, 2004, personal property that is donated for
8disaster relief to be used in a State or federally declared
9disaster area in Illinois or bordering Illinois by a
10manufacturer or retailer that is registered in this State to a
11corporation, society, association, foundation, or institution
12that has been issued a sales tax exemption identification
13number by the Department that assists victims of the disaster
14who reside within the declared disaster area.
15    (18) Beginning with taxable years ending on or after
16December 31, 1995 and ending with taxable years ending on or
17before December 31, 2004, personal property that is used in the
18performance of infrastructure repairs in this State, including
19but not limited to municipal roads and streets, access roads,
20bridges, sidewalks, waste disposal systems, water and sewer
21line extensions, water distribution and purification
22facilities, storm water drainage and retention facilities, and
23sewage treatment facilities, resulting from a State or
24federally declared disaster in Illinois or bordering Illinois
25when such repairs are initiated on facilities located in the
26declared disaster area within 6 months after the disaster.

 

 

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1    (19) Beginning July 1, 1999, game or game birds purchased
2at a "game breeding and hunting preserve area" as that term is
3used in the Wildlife Code. This paragraph is exempt from the
4provisions of Section 3-75.
5    (20) A motor vehicle, as that term is defined in Section
61-146 of the Illinois Vehicle Code, that is donated to a
7corporation, limited liability company, society, association,
8foundation, or institution that is determined by the Department
9to be organized and operated exclusively for educational
10purposes. For purposes of this exemption, "a corporation,
11limited liability company, society, association, foundation,
12or institution organized and operated exclusively for
13educational purposes" means all tax-supported public schools,
14private schools that offer systematic instruction in useful
15branches of learning by methods common to public schools and
16that compare favorably in their scope and intensity with the
17course of study presented in tax-supported schools, and
18vocational or technical schools or institutes organized and
19operated exclusively to provide a course of study of not less
20than 6 weeks duration and designed to prepare individuals to
21follow a trade or to pursue a manual, technical, mechanical,
22industrial, business, or commercial occupation.
23    (21) Beginning January 1, 2000, personal property,
24including food, purchased through fundraising events for the
25benefit of a public or private elementary or secondary school,
26a group of those schools, or one or more school districts if

 

 

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1the events are sponsored by an entity recognized by the school
2district that consists primarily of volunteers and includes
3parents and teachers of the school children. This paragraph
4does not apply to fundraising events (i) for the benefit of
5private home instruction or (ii) for which the fundraising
6entity purchases the personal property sold at the events from
7another individual or entity that sold the property for the
8purpose of resale by the fundraising entity and that profits
9from the sale to the fundraising entity. This paragraph is
10exempt from the provisions of Section 3-75.
11    (22) Beginning January 1, 2000 and through December 31,
122001, new or used automatic vending machines that prepare and
13serve hot food and beverages, including coffee, soup, and other
14items, and replacement parts for these machines. Beginning
15January 1, 2002 and through June 30, 2003, machines and parts
16for machines used in commercial, coin-operated amusement and
17vending business if a use or occupation tax is paid on the
18gross receipts derived from the use of the commercial,
19coin-operated amusement and vending machines. This paragraph
20is exempt from the provisions of Section 3-75.
21    (23) Beginning August 23, 2001 and through June 30, 2016,
22food for human consumption that is to be consumed off the
23premises where it is sold (other than alcoholic beverages, soft
24drinks, and food that has been prepared for immediate
25consumption) and prescription and nonprescription medicines,
26drugs, medical appliances, and insulin, urine testing

 

 

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1materials, syringes, and needles used by diabetics, for human
2use, when purchased for use by a person receiving medical
3assistance under Article V of the Illinois Public Aid Code who
4resides in a licensed long-term care facility, as defined in
5the Nursing Home Care Act, or in a licensed facility as defined
6in the ID/DD Community Care Act, the MC/DD Act, or the
7Specialized Mental Health Rehabilitation Act of 2013.
8    (24) Beginning on the effective date of this amendatory Act
9of the 92nd General Assembly, computers and communications
10equipment utilized for any hospital purpose and equipment used
11in the diagnosis, analysis, or treatment of hospital patients
12purchased by a lessor who leases the equipment, under a lease
13of one year or longer executed or in effect at the time the
14lessor would otherwise be subject to the tax imposed by this
15Act, to a hospital that has been issued an active tax exemption
16identification number by the Department under Section 1g of the
17Retailers' Occupation Tax Act. If the equipment is leased in a
18manner that does not qualify for this exemption or is used in
19any other nonexempt manner, the lessor shall be liable for the
20tax imposed under this Act or the Use Tax Act, as the case may
21be, based on the fair market value of the property at the time
22the nonqualifying use occurs. No lessor shall collect or
23attempt to collect an amount (however designated) that purports
24to reimburse that lessor for the tax imposed by this Act or the
25Use Tax Act, as the case may be, if the tax has not been paid by
26the lessor. If a lessor improperly collects any such amount

 

 

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1from the lessee, the lessee shall have a legal right to claim a
2refund of that amount from the lessor. If, however, that amount
3is not refunded to the lessee for any reason, the lessor is
4liable to pay that amount to the Department. This paragraph is
5exempt from the provisions of Section 3-75.
6    (25) Beginning on the effective date of this amendatory Act
7of the 92nd General Assembly, personal property purchased by a
8lessor who leases the property, under a lease of one year or
9longer executed or in effect at the time the lessor would
10otherwise be subject to the tax imposed by this Act, to a
11governmental body that has been issued an active tax exemption
12identification number by the Department under Section 1g of the
13Retailers' Occupation Tax Act. If the property is leased in a
14manner that does not qualify for this exemption or is used in
15any other nonexempt manner, the lessor shall be liable for the
16tax imposed under this Act or the Use Tax Act, as the case may
17be, based on the fair market value of the property at the time
18the nonqualifying use occurs. No lessor shall collect or
19attempt to collect an amount (however designated) that purports
20to reimburse that lessor for the tax imposed by this Act or the
21Use Tax Act, as the case may be, if the tax has not been paid by
22the lessor. If a lessor improperly collects any such amount
23from the lessee, the lessee shall have a legal right to claim a
24refund of that amount from the lessor. If, however, that amount
25is not refunded to the lessee for any reason, the lessor is
26liable to pay that amount to the Department. This paragraph is

 

 

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1exempt from the provisions of Section 3-75.
2    (26) Beginning January 1, 2008, tangible personal property
3used in the construction or maintenance of a community water
4supply, as defined under Section 3.145 of the Environmental
5Protection Act, that is operated by a not-for-profit
6corporation that holds a valid water supply permit issued under
7Title IV of the Environmental Protection Act. This paragraph is
8exempt from the provisions of Section 3-75.
9    (27) Beginning January 1, 2010, materials, parts,
10equipment, components, and furnishings incorporated into or
11upon an aircraft as part of the modification, refurbishment,
12completion, replacement, repair, or maintenance of the
13aircraft. This exemption includes consumable supplies used in
14the modification, refurbishment, completion, replacement,
15repair, and maintenance of aircraft, but excludes any
16materials, parts, equipment, components, and consumable
17supplies used in the modification, replacement, repair, and
18maintenance of aircraft engines or power plants, whether such
19engines or power plants are installed or uninstalled upon any
20such aircraft. "Consumable supplies" include, but are not
21limited to, adhesive, tape, sandpaper, general purpose
22lubricants, cleaning solution, latex gloves, and protective
23films. This exemption applies only to the use of qualifying
24tangible personal property transferred incident to the
25modification, refurbishment, completion, replacement, repair,
26or maintenance of aircraft by persons who (i) hold an Air

 

 

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1Agency Certificate and are empowered to operate an approved
2repair station by the Federal Aviation Administration, (ii)
3have a Class IV Rating, and (iii) conduct operations in
4accordance with Part 145 of the Federal Aviation Regulations.
5The exemption does not include aircraft operated by a
6commercial air carrier providing scheduled passenger air
7service pursuant to authority issued under Part 121 or Part 129
8of the Federal Aviation Regulations. The changes made to this
9paragraph (27) by Public Act 98-534 are declarative of existing
10law.
11    (28) Tangible personal property purchased by a
12public-facilities corporation, as described in Section
1311-65-10 of the Illinois Municipal Code, for purposes of
14constructing or furnishing a municipal convention hall, but
15only if the legal title to the municipal convention hall is
16transferred to the municipality without any further
17consideration by or on behalf of the municipality at the time
18of the completion of the municipal convention hall or upon the
19retirement or redemption of any bonds or other debt instruments
20issued by the public-facilities corporation in connection with
21the development of the municipal convention hall. This
22exemption includes existing public-facilities corporations as
23provided in Section 11-65-25 of the Illinois Municipal Code.
24This paragraph is exempt from the provisions of Section 3-75.
25    (29) Beginning on July 1, 2016 and until July 1, 2021,
26qualified tangible personal property used in the construction

 

 

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1or operation of a new or existing data center that has been
2granted a certificate of exemption by the Department under
3Section 2505-760 of the Department of Revenue Law of the Civil
4Administrative Code of Illinois, whether that tangible
5personal property is purchased by the owner of the data center
6or by a contractor, subcontractor, or tenant of the owner.
7    For the purposes of this item (29):
8        "Data Center" has the meaning ascribed to that term in
9    Section 2505-760 of the Department of Revenue Law of the
10    Civil Administrative Code of Illinois.
11        "Qualified tangible personal property" means
12    electrical systems and equipment; mechanical systems and
13    equipment; emergency generators; hardware or distributed
14    computers or servers; data storage devices; network
15    connectivity equipment; racks; cabinets; raised floor
16    systems; peripheral components or systems; software;
17    mechanical, electrical, or plumbing systems necessary to
18    operate other items of tangible personal property,
19    including fixtures; and component parts of any of the
20    foregoing, including installation, maintenance, repair,
21    refurbishment, and replacement of qualified tangible
22    personal property. The term "qualified tangible personal
23    property" also includes building materials physically
24    incorporated in to the qualifying data center. To document
25    the exemption allowed under this Section, the retailer must
26    obtain from the purchaser a copy of the Certificate of

 

 

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1    Eligibility for Sales Tax Exemption issued by the
2    Department.
3(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
498-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-756, eff.
57-16-14; 99-180, eff. 7-29-15.)
 
6    Section 95-20. The Service Occupation Tax Act is amended by
7changing Section 3-5 as follows:
 
8    (35 ILCS 115/3-5)
9    Sec. 3-5. Exemptions. The following tangible personal
10property is exempt from the tax imposed by this Act:
11    (1) Personal property sold by a corporation, society,
12association, foundation, institution, or organization, other
13than a limited liability company, that is organized and
14operated as a not-for-profit service enterprise for the benefit
15of persons 65 years of age or older if the personal property
16was not purchased by the enterprise for the purpose of resale
17by the enterprise.
18    (2) Personal property purchased by a not-for-profit
19Illinois county fair association for use in conducting,
20operating, or promoting the county fair.
21    (3) Personal property purchased by any not-for-profit arts
22or cultural organization that establishes, by proof required by
23the Department by rule, that it has received an exemption under
24Section 501(c)(3) of the Internal Revenue Code and that is

 

 

HB4300- 795 -LRB099 14379 HLH 38474 b

1organized and operated primarily for the presentation or
2support of arts or cultural programming, activities, or
3services. These organizations include, but are not limited to,
4music and dramatic arts organizations such as symphony
5orchestras and theatrical groups, arts and cultural service
6organizations, local arts councils, visual arts organizations,
7and media arts organizations. On and after the effective date
8of this amendatory Act of the 92nd General Assembly, however,
9an entity otherwise eligible for this exemption shall not make
10tax-free purchases unless it has an active identification
11number issued by the Department.
12    (4) Legal tender, currency, medallions, or gold or silver
13coinage issued by the State of Illinois, the government of the
14United States of America, or the government of any foreign
15country, and bullion.
16    (5) Until July 1, 2003 and beginning again on September 1,
172004 through August 30, 2014, graphic arts machinery and
18equipment, including repair and replacement parts, both new and
19used, and including that manufactured on special order or
20purchased for lease, certified by the purchaser to be used
21primarily for graphic arts production. Equipment includes
22chemicals or chemicals acting as catalysts but only if the
23chemicals or chemicals acting as catalysts effect a direct and
24immediate change upon a graphic arts product.
25    (6) Personal property sold by a teacher-sponsored student
26organization affiliated with an elementary or secondary school

 

 

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1located in Illinois.
2    (7) Farm machinery and equipment, both new and used,
3including that manufactured on special order, certified by the
4purchaser to be used primarily for production agriculture or
5State or federal agricultural programs, including individual
6replacement parts for the machinery and equipment, including
7machinery and equipment purchased for lease, and including
8implements of husbandry defined in Section 1-130 of the
9Illinois Vehicle Code, farm machinery and agricultural
10chemical and fertilizer spreaders, and nurse wagons required to
11be registered under Section 3-809 of the Illinois Vehicle Code,
12but excluding other motor vehicles required to be registered
13under the Illinois Vehicle Code. Horticultural polyhouses or
14hoop houses used for propagating, growing, or overwintering
15plants shall be considered farm machinery and equipment under
16this item (7). Agricultural chemical tender tanks and dry boxes
17shall include units sold separately from a motor vehicle
18required to be licensed and units sold mounted on a motor
19vehicle required to be licensed if the selling price of the
20tender is separately stated.
21    Farm machinery and equipment shall include precision
22farming equipment that is installed or purchased to be
23installed on farm machinery and equipment including, but not
24limited to, tractors, harvesters, sprayers, planters, seeders,
25or spreaders. Precision farming equipment includes, but is not
26limited to, soil testing sensors, computers, monitors,

 

 

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1software, global positioning and mapping systems, and other
2such equipment.
3    Farm machinery and equipment also includes computers,
4sensors, software, and related equipment used primarily in the
5computer-assisted operation of production agriculture
6facilities, equipment, and activities such as, but not limited
7to, the collection, monitoring, and correlation of animal and
8crop data for the purpose of formulating animal diets and
9agricultural chemicals. This item (7) is exempt from the
10provisions of Section 3-55.
11    (8) Until June 30, 2013, fuel and petroleum products sold
12to or used by an air common carrier, certified by the carrier
13to be used for consumption, shipment, or storage in the conduct
14of its business as an air common carrier, for a flight destined
15for or returning from a location or locations outside the
16United States without regard to previous or subsequent domestic
17stopovers.
18    Beginning July 1, 2013, fuel and petroleum products sold to
19or used by an air carrier, certified by the carrier to be used
20for consumption, shipment, or storage in the conduct of its
21business as an air common carrier, for a flight that (i) is
22engaged in foreign trade or is engaged in trade between the
23United States and any of its possessions and (ii) transports at
24least one individual or package for hire from the city of
25origination to the city of final destination on the same
26aircraft, without regard to a change in the flight number of

 

 

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1that aircraft.
2    (9) Proceeds of mandatory service charges separately
3stated on customers' bills for the purchase and consumption of
4food and beverages, to the extent that the proceeds of the
5service charge are in fact turned over as tips or as a
6substitute for tips to the employees who participate directly
7in preparing, serving, hosting or cleaning up the food or
8beverage function with respect to which the service charge is
9imposed.
10    (10) Until July 1, 2003, oil field exploration, drilling,
11and production equipment, including (i) rigs and parts of rigs,
12rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
13tubular goods, including casing and drill strings, (iii) pumps
14and pump-jack units, (iv) storage tanks and flow lines, (v) any
15individual replacement part for oil field exploration,
16drilling, and production equipment, and (vi) machinery and
17equipment purchased for lease; but excluding motor vehicles
18required to be registered under the Illinois Vehicle Code.
19    (11) Photoprocessing machinery and equipment, including
20repair and replacement parts, both new and used, including that
21manufactured on special order, certified by the purchaser to be
22used primarily for photoprocessing, and including
23photoprocessing machinery and equipment purchased for lease.
24    (12) Coal and aggregate exploration, mining, off-highway
25hauling, processing, maintenance, and reclamation equipment,
26including replacement parts and equipment, and including

 

 

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1equipment purchased for lease, but excluding motor vehicles
2required to be registered under the Illinois Vehicle Code. The
3changes made to this Section by Public Act 97-767 apply on and
4after July 1, 2003, but no claim for credit or refund is
5allowed on or after August 16, 2013 (the effective date of
6Public Act 98-456) for such taxes paid during the period
7beginning July 1, 2003 and ending on August 16, 2013 (the
8effective date of Public Act 98-456).
9    (13) Beginning January 1, 1992 and through June 30, 2016,
10food for human consumption that is to be consumed off the
11premises where it is sold (other than alcoholic beverages, soft
12drinks and food that has been prepared for immediate
13consumption) and prescription and non-prescription medicines,
14drugs, medical appliances, and insulin, urine testing
15materials, syringes, and needles used by diabetics, for human
16use, when purchased for use by a person receiving medical
17assistance under Article V of the Illinois Public Aid Code who
18resides in a licensed long-term care facility, as defined in
19the Nursing Home Care Act, or in a licensed facility as defined
20in the ID/DD Community Care Act, the MC/DD Act, or the
21Specialized Mental Health Rehabilitation Act of 2013.
22    (14) Semen used for artificial insemination of livestock
23for direct agricultural production.
24    (15) Horses, or interests in horses, registered with and
25meeting the requirements of any of the Arabian Horse Club
26Registry of America, Appaloosa Horse Club, American Quarter

 

 

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1Horse Association, United States Trotting Association, or
2Jockey Club, as appropriate, used for purposes of breeding or
3racing for prizes. This item (15) is exempt from the provisions
4of Section 3-55, and the exemption provided for under this item
5(15) applies for all periods beginning May 30, 1995, but no
6claim for credit or refund is allowed on or after January 1,
72008 (the effective date of Public Act 95-88) for such taxes
8paid during the period beginning May 30, 2000 and ending on
9January 1, 2008 (the effective date of Public Act 95-88).
10    (16) Computers and communications equipment utilized for
11any hospital purpose and equipment used in the diagnosis,
12analysis, or treatment of hospital patients sold to a lessor
13who leases the equipment, under a lease of one year or longer
14executed or in effect at the time of the purchase, to a
15hospital that has been issued an active tax exemption
16identification number by the Department under Section 1g of the
17Retailers' Occupation Tax Act.
18    (17) Personal property sold to a lessor who leases the
19property, under a lease of one year or longer executed or in
20effect at the time of the purchase, to a governmental body that
21has been issued an active tax exemption identification number
22by the Department under Section 1g of the Retailers' Occupation
23Tax Act.
24    (18) Beginning with taxable years ending on or after
25December 31, 1995 and ending with taxable years ending on or
26before December 31, 2004, personal property that is donated for

 

 

HB4300- 801 -LRB099 14379 HLH 38474 b

1disaster relief to be used in a State or federally declared
2disaster area in Illinois or bordering Illinois by a
3manufacturer or retailer that is registered in this State to a
4corporation, society, association, foundation, or institution
5that has been issued a sales tax exemption identification
6number by the Department that assists victims of the disaster
7who reside within the declared disaster area.
8    (19) Beginning with taxable years ending on or after
9December 31, 1995 and ending with taxable years ending on or
10before December 31, 2004, personal property that is used in the
11performance of infrastructure repairs in this State, including
12but not limited to municipal roads and streets, access roads,
13bridges, sidewalks, waste disposal systems, water and sewer
14line extensions, water distribution and purification
15facilities, storm water drainage and retention facilities, and
16sewage treatment facilities, resulting from a State or
17federally declared disaster in Illinois or bordering Illinois
18when such repairs are initiated on facilities located in the
19declared disaster area within 6 months after the disaster.
20    (20) Beginning July 1, 1999, game or game birds sold at a
21"game breeding and hunting preserve area" as that term is used
22in the Wildlife Code. This paragraph is exempt from the
23provisions of Section 3-55.
24    (21) A motor vehicle, as that term is defined in Section
251-146 of the Illinois Vehicle Code, that is donated to a
26corporation, limited liability company, society, association,

 

 

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1foundation, or institution that is determined by the Department
2to be organized and operated exclusively for educational
3purposes. For purposes of this exemption, "a corporation,
4limited liability company, society, association, foundation,
5or institution organized and operated exclusively for
6educational purposes" means all tax-supported public schools,
7private schools that offer systematic instruction in useful
8branches of learning by methods common to public schools and
9that compare favorably in their scope and intensity with the
10course of study presented in tax-supported schools, and
11vocational or technical schools or institutes organized and
12operated exclusively to provide a course of study of not less
13than 6 weeks duration and designed to prepare individuals to
14follow a trade or to pursue a manual, technical, mechanical,
15industrial, business, or commercial occupation.
16    (22) Beginning January 1, 2000, personal property,
17including food, purchased through fundraising events for the
18benefit of a public or private elementary or secondary school,
19a group of those schools, or one or more school districts if
20the events are sponsored by an entity recognized by the school
21district that consists primarily of volunteers and includes
22parents and teachers of the school children. This paragraph
23does not apply to fundraising events (i) for the benefit of
24private home instruction or (ii) for which the fundraising
25entity purchases the personal property sold at the events from
26another individual or entity that sold the property for the

 

 

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1purpose of resale by the fundraising entity and that profits
2from the sale to the fundraising entity. This paragraph is
3exempt from the provisions of Section 3-55.
4    (23) Beginning January 1, 2000 and through December 31,
52001, new or used automatic vending machines that prepare and
6serve hot food and beverages, including coffee, soup, and other
7items, and replacement parts for these machines. Beginning
8January 1, 2002 and through June 30, 2003, machines and parts
9for machines used in commercial, coin-operated amusement and
10vending business if a use or occupation tax is paid on the
11gross receipts derived from the use of the commercial,
12coin-operated amusement and vending machines. This paragraph
13is exempt from the provisions of Section 3-55.
14    (24) Beginning on the effective date of this amendatory Act
15of the 92nd General Assembly, computers and communications
16equipment utilized for any hospital purpose and equipment used
17in the diagnosis, analysis, or treatment of hospital patients
18sold to a lessor who leases the equipment, under a lease of one
19year or longer executed or in effect at the time of the
20purchase, to a hospital that has been issued an active tax
21exemption identification number by the Department under
22Section 1g of the Retailers' Occupation Tax Act. This paragraph
23is exempt from the provisions of Section 3-55.
24    (25) Beginning on the effective date of this amendatory Act
25of the 92nd General Assembly, personal property sold to a
26lessor who leases the property, under a lease of one year or

 

 

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1longer executed or in effect at the time of the purchase, to a
2governmental body that has been issued an active tax exemption
3identification number by the Department under Section 1g of the
4Retailers' Occupation Tax Act. This paragraph is exempt from
5the provisions of Section 3-55.
6    (26) Beginning on January 1, 2002 and through June 30,
72016, tangible personal property purchased from an Illinois
8retailer by a taxpayer engaged in centralized purchasing
9activities in Illinois who will, upon receipt of the property
10in Illinois, temporarily store the property in Illinois (i) for
11the purpose of subsequently transporting it outside this State
12for use or consumption thereafter solely outside this State or
13(ii) for the purpose of being processed, fabricated, or
14manufactured into, attached to, or incorporated into other
15tangible personal property to be transported outside this State
16and thereafter used or consumed solely outside this State. The
17Director of Revenue shall, pursuant to rules adopted in
18accordance with the Illinois Administrative Procedure Act,
19issue a permit to any taxpayer in good standing with the
20Department who is eligible for the exemption under this
21paragraph (26). The permit issued under this paragraph (26)
22shall authorize the holder, to the extent and in the manner
23specified in the rules adopted under this Act, to purchase
24tangible personal property from a retailer exempt from the
25taxes imposed by this Act. Taxpayers shall maintain all
26necessary books and records to substantiate the use and

 

 

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1consumption of all such tangible personal property outside of
2the State of Illinois.
3    (27) Beginning January 1, 2008, tangible personal property
4used in the construction or maintenance of a community water
5supply, as defined under Section 3.145 of the Environmental
6Protection Act, that is operated by a not-for-profit
7corporation that holds a valid water supply permit issued under
8Title IV of the Environmental Protection Act. This paragraph is
9exempt from the provisions of Section 3-55.
10    (28) Tangible personal property sold to a
11public-facilities corporation, as described in Section
1211-65-10 of the Illinois Municipal Code, for purposes of
13constructing or furnishing a municipal convention hall, but
14only if the legal title to the municipal convention hall is
15transferred to the municipality without any further
16consideration by or on behalf of the municipality at the time
17of the completion of the municipal convention hall or upon the
18retirement or redemption of any bonds or other debt instruments
19issued by the public-facilities corporation in connection with
20the development of the municipal convention hall. This
21exemption includes existing public-facilities corporations as
22provided in Section 11-65-25 of the Illinois Municipal Code.
23This paragraph is exempt from the provisions of Section 3-55.
24    (29) Beginning January 1, 2010, materials, parts,
25equipment, components, and furnishings incorporated into or
26upon an aircraft as part of the modification, refurbishment,

 

 

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1completion, replacement, repair, or maintenance of the
2aircraft. This exemption includes consumable supplies used in
3the modification, refurbishment, completion, replacement,
4repair, and maintenance of aircraft, but excludes any
5materials, parts, equipment, components, and consumable
6supplies used in the modification, replacement, repair, and
7maintenance of aircraft engines or power plants, whether such
8engines or power plants are installed or uninstalled upon any
9such aircraft. "Consumable supplies" include, but are not
10limited to, adhesive, tape, sandpaper, general purpose
11lubricants, cleaning solution, latex gloves, and protective
12films. This exemption applies only to the transfer of
13qualifying tangible personal property incident to the
14modification, refurbishment, completion, replacement, repair,
15or maintenance of an aircraft by persons who (i) hold an Air
16Agency Certificate and are empowered to operate an approved
17repair station by the Federal Aviation Administration, (ii)
18have a Class IV Rating, and (iii) conduct operations in
19accordance with Part 145 of the Federal Aviation Regulations.
20The exemption does not include aircraft operated by a
21commercial air carrier providing scheduled passenger air
22service pursuant to authority issued under Part 121 or Part 129
23of the Federal Aviation Regulations. The changes made to this
24paragraph (29) by Public Act 98-534 are declarative of existing
25law.
26    (30) Beginning on July 1, 2016 and until July 1, 2021,

 

 

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1qualified tangible personal property used in the construction
2or operation of a new or existing data center that has been
3granted a certificate of exemption by the Department under
4Section 2505-760 of the Department of Revenue Law of the Civil
5Administrative Code of Illinois, whether that tangible
6personal property is purchased by the owner of the data center
7or by a contractor, subcontractor, or tenant of the owner.
8    For the purposes of this item (30):
9        "Data Center" has the meaning ascribed to that term in
10    Section 2505-760 of the Department of Revenue Law of the
11    Civil Administrative Code of Illinois.
12        "Qualified tangible personal property" means
13    electrical systems and equipment; mechanical systems and
14    equipment; emergency generators; hardware or distributed
15    computers or servers; data storage devices; network
16    connectivity equipment; racks; cabinets; raised floor
17    systems; peripheral components or systems; software;
18    mechanical, electrical, or plumbing systems necessary to
19    operate other items of tangible personal property,
20    including fixtures; and component parts of any of the
21    foregoing, including installation, maintenance, repair,
22    refurbishment, and replacement of qualified tangible
23    personal property. The term "qualified tangible personal
24    property" also includes building materials physically
25    incorporated in to the qualifying data center. To document
26    the exemption allowed under this Section, the retailer must

 

 

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1    obtain from the purchaser a copy of the Certificate of
2    Eligibility for Sales Tax Exemption issued by the
3    Department.
4(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
598-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-756, eff.
67-16-14; 99-180, eff. 7-29-15.)
 
7    Section 95-25. The Retailers' Occupation Tax Act is amended
8by changing Section 2-5 as follows:
 
9    (35 ILCS 120/2-5)
10    Sec. 2-5. Exemptions. Gross receipts from proceeds from the
11sale of the following tangible personal property are exempt
12from the tax imposed by this Act:
13    (1) Farm chemicals.
14    (2) Farm machinery and equipment, both new and used,
15including that manufactured on special order, certified by the
16purchaser to be used primarily for production agriculture or
17State or federal agricultural programs, including individual
18replacement parts for the machinery and equipment, including
19machinery and equipment purchased for lease, and including
20implements of husbandry defined in Section 1-130 of the
21Illinois Vehicle Code, farm machinery and agricultural
22chemical and fertilizer spreaders, and nurse wagons required to
23be registered under Section 3-809 of the Illinois Vehicle Code,
24but excluding other motor vehicles required to be registered

 

 

HB4300- 809 -LRB099 14379 HLH 38474 b

1under the Illinois Vehicle Code. Horticultural polyhouses or
2hoop houses used for propagating, growing, or overwintering
3plants shall be considered farm machinery and equipment under
4this item (2). Agricultural chemical tender tanks and dry boxes
5shall include units sold separately from a motor vehicle
6required to be licensed and units sold mounted on a motor
7vehicle required to be licensed, if the selling price of the
8tender is separately stated.
9    Farm machinery and equipment shall include precision
10farming equipment that is installed or purchased to be
11installed on farm machinery and equipment including, but not
12limited to, tractors, harvesters, sprayers, planters, seeders,
13or spreaders. Precision farming equipment includes, but is not
14limited to, soil testing sensors, computers, monitors,
15software, global positioning and mapping systems, and other
16such equipment.
17    Farm machinery and equipment also includes computers,
18sensors, software, and related equipment used primarily in the
19computer-assisted operation of production agriculture
20facilities, equipment, and activities such as, but not limited
21to, the collection, monitoring, and correlation of animal and
22crop data for the purpose of formulating animal diets and
23agricultural chemicals. This item (2) is exempt from the
24provisions of Section 2-70.
25    (3) Until July 1, 2003, distillation machinery and
26equipment, sold as a unit or kit, assembled or installed by the

 

 

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1retailer, certified by the user to be used only for the
2production of ethyl alcohol that will be used for consumption
3as motor fuel or as a component of motor fuel for the personal
4use of the user, and not subject to sale or resale.
5    (4) Until July 1, 2003 and beginning again September 1,
62004 through August 30, 2014, graphic arts machinery and
7equipment, including repair and replacement parts, both new and
8used, and including that manufactured on special order or
9purchased for lease, certified by the purchaser to be used
10primarily for graphic arts production. Equipment includes
11chemicals or chemicals acting as catalysts but only if the
12chemicals or chemicals acting as catalysts effect a direct and
13immediate change upon a graphic arts product.
14    (5) A motor vehicle that is used for automobile renting, as
15defined in the Automobile Renting Occupation and Use Tax Act.
16This paragraph is exempt from the provisions of Section 2-70.
17    (6) Personal property sold by a teacher-sponsored student
18organization affiliated with an elementary or secondary school
19located in Illinois.
20    (7) Until July 1, 2003, proceeds of that portion of the
21selling price of a passenger car the sale of which is subject
22to the Replacement Vehicle Tax.
23    (8) Personal property sold to an Illinois county fair
24association for use in conducting, operating, or promoting the
25county fair.
26    (9) Personal property sold to a not-for-profit arts or

 

 

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1cultural organization that establishes, by proof required by
2the Department by rule, that it has received an exemption under
3Section 501(c)(3) of the Internal Revenue Code and that is
4organized and operated primarily for the presentation or
5support of arts or cultural programming, activities, or
6services. These organizations include, but are not limited to,
7music and dramatic arts organizations such as symphony
8orchestras and theatrical groups, arts and cultural service
9organizations, local arts councils, visual arts organizations,
10and media arts organizations. On and after the effective date
11of this amendatory Act of the 92nd General Assembly, however,
12an entity otherwise eligible for this exemption shall not make
13tax-free purchases unless it has an active identification
14number issued by the Department.
15    (10) Personal property sold by a corporation, society,
16association, foundation, institution, or organization, other
17than a limited liability company, that is organized and
18operated as a not-for-profit service enterprise for the benefit
19of persons 65 years of age or older if the personal property
20was not purchased by the enterprise for the purpose of resale
21by the enterprise.
22    (11) Personal property sold to a governmental body, to a
23corporation, society, association, foundation, or institution
24organized and operated exclusively for charitable, religious,
25or educational purposes, or to a not-for-profit corporation,
26society, association, foundation, institution, or organization

 

 

HB4300- 812 -LRB099 14379 HLH 38474 b

1that has no compensated officers or employees and that is
2organized and operated primarily for the recreation of persons
355 years of age or older. A limited liability company may
4qualify for the exemption under this paragraph only if the
5limited liability company is organized and operated
6exclusively for educational purposes. On and after July 1,
71987, however, no entity otherwise eligible for this exemption
8shall make tax-free purchases unless it has an active
9identification number issued by the Department.
10    (12) Tangible personal property sold to interstate
11carriers for hire for use as rolling stock moving in interstate
12commerce or to lessors under leases of one year or longer
13executed or in effect at the time of purchase by interstate
14carriers for hire for use as rolling stock moving in interstate
15commerce and equipment operated by a telecommunications
16provider, licensed as a common carrier by the Federal
17Communications Commission, which is permanently installed in
18or affixed to aircraft moving in interstate commerce.
19    (12-5) On and after July 1, 2003 and through June 30, 2004,
20motor vehicles of the second division with a gross vehicle
21weight in excess of 8,000 pounds that are subject to the
22commercial distribution fee imposed under Section 3-815.1 of
23the Illinois Vehicle Code. Beginning on July 1, 2004 and
24through June 30, 2005, the use in this State of motor vehicles
25of the second division: (i) with a gross vehicle weight rating
26in excess of 8,000 pounds; (ii) that are subject to the

 

 

HB4300- 813 -LRB099 14379 HLH 38474 b

1commercial distribution fee imposed under Section 3-815.1 of
2the Illinois Vehicle Code; and (iii) that are primarily used
3for commercial purposes. Through June 30, 2005, this exemption
4applies to repair and replacement parts added after the initial
5purchase of such a motor vehicle if that motor vehicle is used
6in a manner that would qualify for the rolling stock exemption
7otherwise provided for in this Act. For purposes of this
8paragraph, "used for commercial purposes" means the
9transportation of persons or property in furtherance of any
10commercial or industrial enterprise whether for-hire or not.
11    (13) Proceeds from sales to owners, lessors, or shippers of
12tangible personal property that is utilized by interstate
13carriers for hire for use as rolling stock moving in interstate
14commerce and equipment operated by a telecommunications
15provider, licensed as a common carrier by the Federal
16Communications Commission, which is permanently installed in
17or affixed to aircraft moving in interstate commerce.
18    (14) Machinery and equipment that will be used by the
19purchaser, or a lessee of the purchaser, primarily in the
20process of manufacturing or assembling tangible personal
21property for wholesale or retail sale or lease, whether the
22sale or lease is made directly by the manufacturer or by some
23other person, whether the materials used in the process are
24owned by the manufacturer or some other person, or whether the
25sale or lease is made apart from or as an incident to the
26seller's engaging in the service occupation of producing

 

 

HB4300- 814 -LRB099 14379 HLH 38474 b

1machines, tools, dies, jigs, patterns, gauges, or other similar
2items of no commercial value on special order for a particular
3purchaser. The exemption provided by this paragraph (14) does
4not include machinery and equipment used in (i) the generation
5of electricity for wholesale or retail sale; (ii) the
6generation or treatment of natural or artificial gas for
7wholesale or retail sale that is delivered to customers through
8pipes, pipelines, or mains; or (iii) the treatment of water for
9wholesale or retail sale that is delivered to customers through
10pipes, pipelines, or mains. The provisions of Public Act 98-583
11are declaratory of existing law as to the meaning and scope of
12this exemption.
13    (15) Proceeds of mandatory service charges separately
14stated on customers' bills for purchase and consumption of food
15and beverages, to the extent that the proceeds of the service
16charge are in fact turned over as tips or as a substitute for
17tips to the employees who participate directly in preparing,
18serving, hosting or cleaning up the food or beverage function
19with respect to which the service charge is imposed.
20    (16) Petroleum products sold to a purchaser if the seller
21is prohibited by federal law from charging tax to the
22purchaser.
23    (17) Tangible personal property sold to a common carrier by
24rail or motor that receives the physical possession of the
25property in Illinois and that transports the property, or
26shares with another common carrier in the transportation of the

 

 

HB4300- 815 -LRB099 14379 HLH 38474 b

1property, out of Illinois on a standard uniform bill of lading
2showing the seller of the property as the shipper or consignor
3of the property to a destination outside Illinois, for use
4outside Illinois.
5    (18) Legal tender, currency, medallions, or gold or silver
6coinage issued by the State of Illinois, the government of the
7United States of America, or the government of any foreign
8country, and bullion.
9    (19) Until July 1 2003, oil field exploration, drilling,
10and production equipment, including (i) rigs and parts of rigs,
11rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
12tubular goods, including casing and drill strings, (iii) pumps
13and pump-jack units, (iv) storage tanks and flow lines, (v) any
14individual replacement part for oil field exploration,
15drilling, and production equipment, and (vi) machinery and
16equipment purchased for lease; but excluding motor vehicles
17required to be registered under the Illinois Vehicle Code.
18    (20) Photoprocessing machinery and equipment, including
19repair and replacement parts, both new and used, including that
20manufactured on special order, certified by the purchaser to be
21used primarily for photoprocessing, and including
22photoprocessing machinery and equipment purchased for lease.
23    (21) Coal and aggregate exploration, mining, off-highway
24hauling, processing, maintenance, and reclamation equipment,
25including replacement parts and equipment, and including
26equipment purchased for lease, but excluding motor vehicles

 

 

HB4300- 816 -LRB099 14379 HLH 38474 b

1required to be registered under the Illinois Vehicle Code. The
2changes made to this Section by Public Act 97-767 apply on and
3after July 1, 2003, but no claim for credit or refund is
4allowed on or after August 16, 2013 (the effective date of
5Public Act 98-456) for such taxes paid during the period
6beginning July 1, 2003 and ending on August 16, 2013 (the
7effective date of Public Act 98-456).
8    (22) Until June 30, 2013, fuel and petroleum products sold
9to or used by an air carrier, certified by the carrier to be
10used for consumption, shipment, or storage in the conduct of
11its business as an air common carrier, for a flight destined
12for or returning from a location or locations outside the
13United States without regard to previous or subsequent domestic
14stopovers.
15    Beginning July 1, 2013, fuel and petroleum products sold to
16or used by an air carrier, certified by the carrier to be used
17for consumption, shipment, or storage in the conduct of its
18business as an air common carrier, for a flight that (i) is
19engaged in foreign trade or is engaged in trade between the
20United States and any of its possessions and (ii) transports at
21least one individual or package for hire from the city of
22origination to the city of final destination on the same
23aircraft, without regard to a change in the flight number of
24that aircraft.
25    (23) A transaction in which the purchase order is received
26by a florist who is located outside Illinois, but who has a

 

 

HB4300- 817 -LRB099 14379 HLH 38474 b

1florist located in Illinois deliver the property to the
2purchaser or the purchaser's donee in Illinois.
3    (24) Fuel consumed or used in the operation of ships,
4barges, or vessels that are used primarily in or for the
5transportation of property or the conveyance of persons for
6hire on rivers bordering on this State if the fuel is delivered
7by the seller to the purchaser's barge, ship, or vessel while
8it is afloat upon that bordering river.
9    (25) Except as provided in item (25-5) of this Section, a
10motor vehicle sold in this State to a nonresident even though
11the motor vehicle is delivered to the nonresident in this
12State, if the motor vehicle is not to be titled in this State,
13and if a drive-away permit is issued to the motor vehicle as
14provided in Section 3-603 of the Illinois Vehicle Code or if
15the nonresident purchaser has vehicle registration plates to
16transfer to the motor vehicle upon returning to his or her home
17state. The issuance of the drive-away permit or having the
18out-of-state registration plates to be transferred is prima
19facie evidence that the motor vehicle will not be titled in
20this State.
21    (25-5) The exemption under item (25) does not apply if the
22state in which the motor vehicle will be titled does not allow
23a reciprocal exemption for a motor vehicle sold and delivered
24in that state to an Illinois resident but titled in Illinois.
25The tax collected under this Act on the sale of a motor vehicle
26in this State to a resident of another state that does not

 

 

HB4300- 818 -LRB099 14379 HLH 38474 b

1allow a reciprocal exemption shall be imposed at a rate equal
2to the state's rate of tax on taxable property in the state in
3which the purchaser is a resident, except that the tax shall
4not exceed the tax that would otherwise be imposed under this
5Act. At the time of the sale, the purchaser shall execute a
6statement, signed under penalty of perjury, of his or her
7intent to title the vehicle in the state in which the purchaser
8is a resident within 30 days after the sale and of the fact of
9the payment to the State of Illinois of tax in an amount
10equivalent to the state's rate of tax on taxable property in
11his or her state of residence and shall submit the statement to
12the appropriate tax collection agency in his or her state of
13residence. In addition, the retailer must retain a signed copy
14of the statement in his or her records. Nothing in this item
15shall be construed to require the removal of the vehicle from
16this state following the filing of an intent to title the
17vehicle in the purchaser's state of residence if the purchaser
18titles the vehicle in his or her state of residence within 30
19days after the date of sale. The tax collected under this Act
20in accordance with this item (25-5) shall be proportionately
21distributed as if the tax were collected at the 6.25% general
22rate imposed under this Act.
23    (25-7) Beginning on July 1, 2007, no tax is imposed under
24this Act on the sale of an aircraft, as defined in Section 3 of
25the Illinois Aeronautics Act, if all of the following
26conditions are met:

 

 

HB4300- 819 -LRB099 14379 HLH 38474 b

1        (1) the aircraft leaves this State within 15 days after
2    the later of either the issuance of the final billing for
3    the sale of the aircraft, or the authorized approval for
4    return to service, completion of the maintenance record
5    entry, and completion of the test flight and ground test
6    for inspection, as required by 14 C.F.R. 91.407;
7        (2) the aircraft is not based or registered in this
8    State after the sale of the aircraft; and
9        (3) the seller retains in his or her books and records
10    and provides to the Department a signed and dated
11    certification from the purchaser, on a form prescribed by
12    the Department, certifying that the requirements of this
13    item (25-7) are met. The certificate must also include the
14    name and address of the purchaser, the address of the
15    location where the aircraft is to be titled or registered,
16    the address of the primary physical location of the
17    aircraft, and other information that the Department may
18    reasonably require.
19    For purposes of this item (25-7):
20    "Based in this State" means hangared, stored, or otherwise
21used, excluding post-sale customizations as defined in this
22Section, for 10 or more days in each 12-month period
23immediately following the date of the sale of the aircraft.
24    "Registered in this State" means an aircraft registered
25with the Department of Transportation, Aeronautics Division,
26or titled or registered with the Federal Aviation

 

 

HB4300- 820 -LRB099 14379 HLH 38474 b

1Administration to an address located in this State.
2    This paragraph (25-7) is exempt from the provisions of
3Section 2-70.
4    (26) Semen used for artificial insemination of livestock
5for direct agricultural production.
6    (27) Horses, or interests in horses, registered with and
7meeting the requirements of any of the Arabian Horse Club
8Registry of America, Appaloosa Horse Club, American Quarter
9Horse Association, United States Trotting Association, or
10Jockey Club, as appropriate, used for purposes of breeding or
11racing for prizes. This item (27) is exempt from the provisions
12of Section 2-70, and the exemption provided for under this item
13(27) applies for all periods beginning May 30, 1995, but no
14claim for credit or refund is allowed on or after January 1,
152008 (the effective date of Public Act 95-88) for such taxes
16paid during the period beginning May 30, 2000 and ending on
17January 1, 2008 (the effective date of Public Act 95-88).
18    (28) Computers and communications equipment utilized for
19any hospital purpose and equipment used in the diagnosis,
20analysis, or treatment of hospital patients sold to a lessor
21who leases the equipment, under a lease of one year or longer
22executed or in effect at the time of the purchase, to a
23hospital that has been issued an active tax exemption
24identification number by the Department under Section 1g of
25this Act.
26    (29) Personal property sold to a lessor who leases the

 

 

HB4300- 821 -LRB099 14379 HLH 38474 b

1property, under a lease of one year or longer executed or in
2effect at the time of the purchase, to a governmental body that
3has been issued an active tax exemption identification number
4by the Department under Section 1g of this Act.
5    (30) Beginning with taxable years ending on or after
6December 31, 1995 and ending with taxable years ending on or
7before December 31, 2004, personal property that is donated for
8disaster relief to be used in a State or federally declared
9disaster area in Illinois or bordering Illinois by a
10manufacturer or retailer that is registered in this State to a
11corporation, society, association, foundation, or institution
12that has been issued a sales tax exemption identification
13number by the Department that assists victims of the disaster
14who reside within the declared disaster area.
15    (31) Beginning with taxable years ending on or after
16December 31, 1995 and ending with taxable years ending on or
17before December 31, 2004, personal property that is used in the
18performance of infrastructure repairs in this State, including
19but not limited to municipal roads and streets, access roads,
20bridges, sidewalks, waste disposal systems, water and sewer
21line extensions, water distribution and purification
22facilities, storm water drainage and retention facilities, and
23sewage treatment facilities, resulting from a State or
24federally declared disaster in Illinois or bordering Illinois
25when such repairs are initiated on facilities located in the
26declared disaster area within 6 months after the disaster.

 

 

HB4300- 822 -LRB099 14379 HLH 38474 b

1    (32) Beginning July 1, 1999, game or game birds sold at a
2"game breeding and hunting preserve area" as that term is used
3in the Wildlife Code. This paragraph is exempt from the
4provisions of Section 2-70.
5    (33) A motor vehicle, as that term is defined in Section
61-146 of the Illinois Vehicle Code, that is donated to a
7corporation, limited liability company, society, association,
8foundation, or institution that is determined by the Department
9to be organized and operated exclusively for educational
10purposes. For purposes of this exemption, "a corporation,
11limited liability company, society, association, foundation,
12or institution organized and operated exclusively for
13educational purposes" means all tax-supported public schools,
14private schools that offer systematic instruction in useful
15branches of learning by methods common to public schools and
16that compare favorably in their scope and intensity with the
17course of study presented in tax-supported schools, and
18vocational or technical schools or institutes organized and
19operated exclusively to provide a course of study of not less
20than 6 weeks duration and designed to prepare individuals to
21follow a trade or to pursue a manual, technical, mechanical,
22industrial, business, or commercial occupation.
23    (34) Beginning January 1, 2000, personal property,
24including food, purchased through fundraising events for the
25benefit of a public or private elementary or secondary school,
26a group of those schools, or one or more school districts if

 

 

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1the events are sponsored by an entity recognized by the school
2district that consists primarily of volunteers and includes
3parents and teachers of the school children. This paragraph
4does not apply to fundraising events (i) for the benefit of
5private home instruction or (ii) for which the fundraising
6entity purchases the personal property sold at the events from
7another individual or entity that sold the property for the
8purpose of resale by the fundraising entity and that profits
9from the sale to the fundraising entity. This paragraph is
10exempt from the provisions of Section 2-70.
11    (35) Beginning January 1, 2000 and through December 31,
122001, new or used automatic vending machines that prepare and
13serve hot food and beverages, including coffee, soup, and other
14items, and replacement parts for these machines. Beginning
15January 1, 2002 and through June 30, 2003, machines and parts
16for machines used in commercial, coin-operated amusement and
17vending business if a use or occupation tax is paid on the
18gross receipts derived from the use of the commercial,
19coin-operated amusement and vending machines. This paragraph
20is exempt from the provisions of Section 2-70.
21    (35-5) Beginning August 23, 2001 and through June 30, 2016,
22food for human consumption that is to be consumed off the
23premises where it is sold (other than alcoholic beverages, soft
24drinks, and food that has been prepared for immediate
25consumption) and prescription and nonprescription medicines,
26drugs, medical appliances, and insulin, urine testing

 

 

HB4300- 824 -LRB099 14379 HLH 38474 b

1materials, syringes, and needles used by diabetics, for human
2use, when purchased for use by a person receiving medical
3assistance under Article V of the Illinois Public Aid Code who
4resides in a licensed long-term care facility, as defined in
5the Nursing Home Care Act, or a licensed facility as defined in
6the ID/DD Community Care Act, the MC/DD Act, or the Specialized
7Mental Health Rehabilitation Act of 2013.
8    (36) Beginning August 2, 2001, computers and
9communications equipment utilized for any hospital purpose and
10equipment used in the diagnosis, analysis, or treatment of
11hospital patients sold to a lessor who leases the equipment,
12under a lease of one year or longer executed or in effect at
13the time of the purchase, to a hospital that has been issued an
14active tax exemption identification number by the Department
15under Section 1g of this Act. This paragraph is exempt from the
16provisions of Section 2-70.
17    (37) Beginning August 2, 2001, personal property sold to a
18lessor who leases the property, under a lease of one year or
19longer executed or in effect at the time of the purchase, to a
20governmental body that has been issued an active tax exemption
21identification number by the Department under Section 1g of
22this Act. This paragraph is exempt from the provisions of
23Section 2-70.
24    (38) Beginning on January 1, 2002 and through June 30,
252016, tangible personal property purchased from an Illinois
26retailer by a taxpayer engaged in centralized purchasing

 

 

HB4300- 825 -LRB099 14379 HLH 38474 b

1activities in Illinois who will, upon receipt of the property
2in Illinois, temporarily store the property in Illinois (i) for
3the purpose of subsequently transporting it outside this State
4for use or consumption thereafter solely outside this State or
5(ii) for the purpose of being processed, fabricated, or
6manufactured into, attached to, or incorporated into other
7tangible personal property to be transported outside this State
8and thereafter used or consumed solely outside this State. The
9Director of Revenue shall, pursuant to rules adopted in
10accordance with the Illinois Administrative Procedure Act,
11issue a permit to any taxpayer in good standing with the
12Department who is eligible for the exemption under this
13paragraph (38). The permit issued under this paragraph (38)
14shall authorize the holder, to the extent and in the manner
15specified in the rules adopted under this Act, to purchase
16tangible personal property from a retailer exempt from the
17taxes imposed by this Act. Taxpayers shall maintain all
18necessary books and records to substantiate the use and
19consumption of all such tangible personal property outside of
20the State of Illinois.
21    (39) Beginning January 1, 2008, tangible personal property
22used in the construction or maintenance of a community water
23supply, as defined under Section 3.145 of the Environmental
24Protection Act, that is operated by a not-for-profit
25corporation that holds a valid water supply permit issued under
26Title IV of the Environmental Protection Act. This paragraph is

 

 

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1exempt from the provisions of Section 2-70.
2    (40) Beginning January 1, 2010, materials, parts,
3equipment, components, and furnishings incorporated into or
4upon an aircraft as part of the modification, refurbishment,
5completion, replacement, repair, or maintenance of the
6aircraft. This exemption includes consumable supplies used in
7the modification, refurbishment, completion, replacement,
8repair, and maintenance of aircraft, but excludes any
9materials, parts, equipment, components, and consumable
10supplies used in the modification, replacement, repair, and
11maintenance of aircraft engines or power plants, whether such
12engines or power plants are installed or uninstalled upon any
13such aircraft. "Consumable supplies" include, but are not
14limited to, adhesive, tape, sandpaper, general purpose
15lubricants, cleaning solution, latex gloves, and protective
16films. This exemption applies only to the sale of qualifying
17tangible personal property to persons who modify, refurbish,
18complete, replace, or maintain an aircraft and who (i) hold an
19Air Agency Certificate and are empowered to operate an approved
20repair station by the Federal Aviation Administration, (ii)
21have a Class IV Rating, and (iii) conduct operations in
22accordance with Part 145 of the Federal Aviation Regulations.
23The exemption does not include aircraft operated by a
24commercial air carrier providing scheduled passenger air
25service pursuant to authority issued under Part 121 or Part 129
26of the Federal Aviation Regulations. The changes made to this

 

 

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1paragraph (40) by Public Act 98-534 are declarative of existing
2law.
3    (41) Tangible personal property sold to a
4public-facilities corporation, as described in Section
511-65-10 of the Illinois Municipal Code, for purposes of
6constructing or furnishing a municipal convention hall, but
7only if the legal title to the municipal convention hall is
8transferred to the municipality without any further
9consideration by or on behalf of the municipality at the time
10of the completion of the municipal convention hall or upon the
11retirement or redemption of any bonds or other debt instruments
12issued by the public-facilities corporation in connection with
13the development of the municipal convention hall. This
14exemption includes existing public-facilities corporations as
15provided in Section 11-65-25 of the Illinois Municipal Code.
16This paragraph is exempt from the provisions of Section 2-70.
17    (42) Beginning on July 1, 2016 and until July 1, 2021,
18qualified tangible personal property used in the construction
19or operation of a new or existing data center that has been
20granted a certificate of exemption by the Department under
21Section 2505-760 of the Department of Revenue Law of the Civil
22Administrative Code of Illinois, whether that tangible
23personal property is purchased by the owner of the data center
24or by a contractor, subcontractor, or tenant of the owner.
25    For the purposes of this item (42):
26        "Data Center" has the meaning ascribed to that term in

 

 

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1    Section 2505-760 of the Department of Revenue Law of the
2    Civil Administrative Code of Illinois.
3        "Qualified tangible personal property" means
4    electrical systems and equipment; mechanical systems and
5    equipment; emergency generators; hardware or distributed
6    computers or servers; data storage devices; network
7    connectivity equipment; racks; cabinets; raised floor
8    systems; peripheral components or systems; software;
9    mechanical, electrical, or plumbing systems necessary to
10    operate other items of tangible personal property,
11    including fixtures; and component parts of any of the
12    foregoing, including installation, maintenance, repair,
13    refurbishment, and replacement of qualified tangible
14    personal property. The term "qualified tangible personal
15    property" also includes building materials physically
16    incorporated in to the qualifying data center. To document
17    the exemption allowed under this Section, the retailer must
18    obtain from the purchaser a copy of the Certificate of
19    Eligibility for Sales Tax Exemption issued by the
20    Department.
21(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
2298-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.
231-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.
247-29-15.)
 
25    Section 95-30. The Electricity Excise Tax Law is amended by

 

 

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1changing Section 2-4 as follows:
 
2    (35 ILCS 640/2-4)
3    Sec. 2-4. Tax imposed.
4    (a) Except as provided in subsection (b), a tax is imposed
5on the privilege of using in this State electricity purchased
6for use or consumption and not for resale, other than by
7municipal corporations owning and operating a local
8transportation system for public service, at the following
9rates per kilowatt-hour delivered to the purchaser:
10        (i) For the first 2000 kilowatt-hours used or consumed
11    in a month: 0.330 cents per kilowatt-hour;
12        (ii) For the next 48,000 kilowatt-hours used or
13    consumed in a month: 0.319 cents per kilowatt-hour;
14        (iii) For the next 50,000 kilowatt-hours used or
15    consumed in a month: 0.303 cents per kilowatt-hour;
16        (iv) For the next 400,000 kilowatt-hours used or
17    consumed in a month: 0.297 cents per kilowatt-hour;
18        (v) For the next 500,000 kilowatt-hours used or
19    consumed in a month: 0.286 cents per kilowatt-hour;
20        (vi) For the next 2,000,000 kilowatt-hours used or
21    consumed in a month: 0.270 cents per kilowatt-hour;
22        (vii) For the next 2,000,000 kilowatt-hours used or
23    consumed in a month: 0.254 cents per kilowatt-hour;
24        (viii) For the next 5,000,000 kilowatt-hours used or
25    consumed in a month: 0.233 cents per kilowatt-hour;

 

 

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1        (ix) For the next 10,000,000 kilowatt-hours used or
2    consumed in a month: 0.207 cents per kilowatt-hour;
3        (x) For all electricity in excess of 20,000,000
4    kilowatt-hours used or consumed in a month: 0.202 cents per
5    kilowatt-hour.
6    Provided, that in lieu of the foregoing rates, the tax is
7imposed on a self-assessing purchaser at the rate of 5.1% of
8the self-assessing purchaser's purchase price for all
9electricity distributed, supplied, furnished, sold,
10transmitted and delivered to the self-assessing purchaser in a
11month.
12    (b) A tax is imposed on the privilege of using in this
13State electricity purchased from a municipal system or electric
14cooperative, as defined in Article XVII of the Public Utilities
15Act, which has not made an election as permitted by either
16Section 17-200 or Section 17-300 of such Act, at the lesser of
170.32 cents per kilowatt hour of all electricity distributed,
18supplied, furnished, sold, transmitted, and delivered by such
19municipal system or electric cooperative to the purchaser or 5%
20of each such purchaser's purchase price for all electricity
21distributed, supplied, furnished, sold, transmitted, and
22delivered by such municipal system or electric cooperative to
23the purchaser, whichever is the lower rate as applied to each
24purchaser in each billing period.
25    (c) The tax imposed by this Section 2-4 is not imposed with
26respect to any use of electricity by business enterprises

 

 

HB4300- 831 -LRB099 14379 HLH 38474 b

1certified under Section 9-222.1 or 9-222.1A of the Public
2Utilities Act, as amended, to the extent of such exemption and
3during the time specified by the Department of Commerce and
4Economic Opportunity; or with respect to any transaction in
5interstate commerce, or otherwise, to the extent to which such
6transaction may not, under the Constitution and statutes of the
7United States, be made the subject of taxation by this State.
8    (d) Beginning July 1, 2016 and until July 1, 2021, a
9business enterprise that is certified as a qualifying Illinois
10data center by the Department under Section 2505-760 of the
11Department of Revenue Law of the Civil Administrative Code of
12Illinois is exempt from the tax imposed under this Section. The
13Department may adopt rules to carry out the provisions of this
14subsection, including procedures for applying for the
15exemption. The Department shall notify the public utility of
16the exemption status of the business enterprise. The exemption
17shall take effect upon certification of the qualifying data
18center.
19(Source: P.A. 94-793, eff. 5-19-06.)
 
20
ARTICLE 100. PUBLIC AID

 
21    Section 100-5. The Illinois Public Aid Code is amended by
22changing Sections 5-5, 5-5.2, 5A-2, 5A-12.2, 5A-12.5, and
2312-13.1 and by adding Sections 5-5b.1a, 5-5b.2, and 5-30.3 as
24follows:
 

 

 

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1    (305 ILCS 5/5-5)  (from Ch. 23, par. 5-5)
2    (Text of Section before amendment by P.A. 99-407)
3    Sec. 5-5. Medical services. The Illinois Department, by
4rule, shall determine the quantity and quality of and the rate
5of reimbursement for the medical assistance for which payment
6will be authorized, and the medical services to be provided,
7which may include all or part of the following: (1) inpatient
8hospital services; (2) outpatient hospital services; (3) other
9laboratory and X-ray services; (4) skilled nursing home
10services; (5) physicians' services whether furnished in the
11office, the patient's home, a hospital, a skilled nursing home,
12or elsewhere; (6) medical care, or any other type of remedial
13care furnished by licensed practitioners; (7) home health care
14services; (8) private duty nursing service; (9) clinic
15services; (10) dental services, including prevention and
16treatment of periodontal disease and dental caries disease for
17pregnant women, provided by an individual licensed to practice
18dentistry or dental surgery; for purposes of this item (10),
19"dental services" means diagnostic, preventive, or corrective
20procedures provided by or under the supervision of a dentist in
21the practice of his or her profession; (11) physical therapy
22and related services; (12) prescribed drugs, dentures, and
23prosthetic devices; and eyeglasses prescribed by a physician
24skilled in the diseases of the eye, or by an optometrist,
25whichever the person may select; (13) other diagnostic,

 

 

HB4300- 833 -LRB099 14379 HLH 38474 b

1screening, preventive, and rehabilitative services, including
2to ensure that the individual's need for intervention or
3treatment of mental disorders or substance use disorders or
4co-occurring mental health and substance use disorders is
5determined using a uniform screening, assessment, and
6evaluation process inclusive of criteria, for children and
7adults; for purposes of this item (13), a uniform screening,
8assessment, and evaluation process refers to a process that
9includes an appropriate evaluation and, as warranted, a
10referral; "uniform" does not mean the use of a singular
11instrument, tool, or process that all must utilize; (14)
12transportation and such other expenses as may be necessary;
13(15) medical treatment of sexual assault survivors, as defined
14in Section 1a of the Sexual Assault Survivors Emergency
15Treatment Act, for injuries sustained as a result of the sexual
16assault, including examinations and laboratory tests to
17discover evidence which may be used in criminal proceedings
18arising from the sexual assault; (16) the diagnosis and
19treatment of sickle cell anemia; and (17) any other medical
20care, and any other type of remedial care recognized under the
21laws of this State, but not including abortions, or induced
22miscarriages or premature births, unless, in the opinion of a
23physician, such procedures are necessary for the preservation
24of the life of the woman seeking such treatment, or except an
25induced premature birth intended to produce a live viable child
26and such procedure is necessary for the health of the mother or

 

 

HB4300- 834 -LRB099 14379 HLH 38474 b

1her unborn child. The Illinois Department, by rule, shall
2prohibit any physician from providing medical assistance to
3anyone eligible therefor under this Code where such physician
4has been found guilty of performing an abortion procedure in a
5wilful and wanton manner upon a woman who was not pregnant at
6the time such abortion procedure was performed. The term "any
7other type of remedial care" shall include nursing care and
8nursing home service for persons who rely on treatment by
9spiritual means alone through prayer for healing.
10    Notwithstanding any other provision of this Section, a
11comprehensive tobacco use cessation program that includes
12purchasing prescription drugs or prescription medical devices
13approved by the Food and Drug Administration shall be covered
14under the medical assistance program under this Article for
15persons who are otherwise eligible for assistance under this
16Article.
17    Notwithstanding any other provision of this Code, the
18Illinois Department may not require, as a condition of payment
19for any laboratory test authorized under this Article, that a
20physician's handwritten signature appear on the laboratory
21test order form. The Illinois Department may, however, impose
22other appropriate requirements regarding laboratory test order
23documentation.
24    Upon receipt of federal approval of an amendment to the
25Illinois Title XIX State Plan for this purpose, the Department
26shall authorize the Chicago Public Schools (CPS) to procure a

 

 

HB4300- 835 -LRB099 14379 HLH 38474 b

1vendor or vendors to manufacture eyeglasses for individuals
2enrolled in a school within the CPS system. CPS shall ensure
3that its vendor or vendors are enrolled as providers in the
4medical assistance program and in any capitated Medicaid
5managed care entity (MCE) serving individuals enrolled in a
6school within the CPS system. Under any contract procured under
7this provision, the vendor or vendors must serve only
8individuals enrolled in a school within the CPS system. Claims
9for services provided by CPS's vendor or vendors to recipients
10of benefits in the medical assistance program under this Code,
11the Children's Health Insurance Program, or the Covering ALL
12KIDS Health Insurance Program shall be submitted to the
13Department or the MCE in which the individual is enrolled for
14payment and shall be reimbursed at the Department's or the
15MCE's established rates or rate methodologies for eyeglasses.
16    On and after July 1, 2012, the Department of Healthcare and
17Family Services may provide the following services to persons
18eligible for assistance under this Article who are
19participating in education, training or employment programs
20operated by the Department of Human Services as successor to
21the Department of Public Aid:
22        (1) dental services provided by or under the
23    supervision of a dentist; and
24        (2) eyeglasses prescribed by a physician skilled in the
25    diseases of the eye, or by an optometrist, whichever the
26    person may select.

 

 

HB4300- 836 -LRB099 14379 HLH 38474 b

1    Notwithstanding any other provision of this Code and
2subject to federal approval, the Department may adopt rules to
3allow a dentist who is volunteering his or her service at no
4cost to render dental services through an enrolled
5not-for-profit health clinic without the dentist personally
6enrolling as a participating provider in the medical assistance
7program. A not-for-profit health clinic shall include a public
8health clinic or Federally Qualified Health Center or other
9enrolled provider, as determined by the Department, through
10which dental services covered under this Section are performed.
11The Department shall establish a process for payment of claims
12for reimbursement for covered dental services rendered under
13this provision.
14    The Illinois Department, by rule, may distinguish and
15classify the medical services to be provided only in accordance
16with the classes of persons designated in Section 5-2.
17    The Department of Healthcare and Family Services must
18provide coverage and reimbursement for amino acid-based
19elemental formulas, regardless of delivery method, for the
20diagnosis and treatment of (i) eosinophilic disorders and (ii)
21short bowel syndrome when the prescribing physician has issued
22a written order stating that the amino acid-based elemental
23formula is medically necessary.
24    The Illinois Department shall authorize the provision of,
25and shall authorize payment for, screening by low-dose
26mammography for the presence of occult breast cancer for women

 

 

HB4300- 837 -LRB099 14379 HLH 38474 b

135 years of age or older who are eligible for medical
2assistance under this Article, as follows:
3        (A) A baseline mammogram for women 35 to 39 years of
4    age.
5        (B) An annual mammogram for women 40 years of age or
6    older.
7        (C) A mammogram at the age and intervals considered
8    medically necessary by the woman's health care provider for
9    women under 40 years of age and having a family history of
10    breast cancer, prior personal history of breast cancer,
11    positive genetic testing, or other risk factors.
12        (D) A comprehensive ultrasound screening of an entire
13    breast or breasts if a mammogram demonstrates
14    heterogeneous or dense breast tissue, when medically
15    necessary as determined by a physician licensed to practice
16    medicine in all of its branches.
17        (E) A screening MRI when medically necessary, as
18    determined by a physician licensed to practice medicine in
19    all of its branches.
20    All screenings shall include a physical breast exam,
21instruction on self-examination and information regarding the
22frequency of self-examination and its value as a preventative
23tool. For purposes of this Section, "low-dose mammography"
24means the x-ray examination of the breast using equipment
25dedicated specifically for mammography, including the x-ray
26tube, filter, compression device, and image receptor, with an

 

 

HB4300- 838 -LRB099 14379 HLH 38474 b

1average radiation exposure delivery of less than one rad per
2breast for 2 views of an average size breast. The term also
3includes digital mammography.
4    On and after January 1, 2016, the Department shall ensure
5that all networks of care for adult clients of the Department
6include access to at least one breast imaging Center of Imaging
7Excellence as certified by the American College of Radiology.
8    On and after January 1, 2012, providers participating in a
9quality improvement program approved by the Department shall be
10reimbursed for screening and diagnostic mammography at the same
11rate as the Medicare program's rates, including the increased
12reimbursement for digital mammography.
13    The Department shall convene an expert panel including
14representatives of hospitals, free-standing mammography
15facilities, and doctors, including radiologists, to establish
16quality standards for mammography.
17    On and after January 1, 2017, providers participating in a
18breast cancer treatment quality improvement program approved
19by the Department shall be reimbursed for breast cancer
20treatment at a rate that is no lower than 95% of the Medicare
21program's rates for the data elements included in the breast
22cancer treatment quality program.
23    The Department shall convene an expert panel, including
24representatives of hospitals, free standing breast cancer
25treatment centers, breast cancer quality organizations, and
26doctors, including breast surgeons, reconstructive breast

 

 

HB4300- 839 -LRB099 14379 HLH 38474 b

1surgeons, oncologists, and primary care providers to establish
2quality standards for breast cancer treatment.
3    Subject to federal approval, the Department shall
4establish a rate methodology for mammography at federally
5qualified health centers and other encounter-rate clinics.
6These clinics or centers may also collaborate with other
7hospital-based mammography facilities. By January 1, 2016, the
8Department shall report to the General Assembly on the status
9of the provision set forth in this paragraph.
10    The Department shall establish a methodology to remind
11women who are age-appropriate for screening mammography, but
12who have not received a mammogram within the previous 18
13months, of the importance and benefit of screening mammography.
14The Department shall work with experts in breast cancer
15outreach and patient navigation to optimize these reminders and
16shall establish a methodology for evaluating their
17effectiveness and modifying the methodology based on the
18evaluation.
19    The Department shall establish a performance goal for
20primary care providers with respect to their female patients
21over age 40 receiving an annual mammogram. This performance
22goal shall be used to provide additional reimbursement in the
23form of a quality performance bonus to primary care providers
24who meet that goal.
25    The Department shall devise a means of case-managing or
26patient navigation for beneficiaries diagnosed with breast

 

 

HB4300- 840 -LRB099 14379 HLH 38474 b

1cancer. This program shall initially operate as a pilot program
2in areas of the State with the highest incidence of mortality
3related to breast cancer. At least one pilot program site shall
4be in the metropolitan Chicago area and at least one site shall
5be outside the metropolitan Chicago area. On or after July 1,
62016, the pilot program shall be expanded to include one site
7in western Illinois, one site in southern Illinois, one site in
8central Illinois, and 4 sites within metropolitan Chicago. An
9evaluation of the pilot program shall be carried out measuring
10health outcomes and cost of care for those served by the pilot
11program compared to similarly situated patients who are not
12served by the pilot program.
13    The Department shall require all networks of care to
14develop a means either internally or by contract with experts
15in navigation and community outreach to navigate cancer
16patients to comprehensive care in a timely fashion. The
17Department shall require all networks of care to include access
18for patients diagnosed with cancer to at least one academic
19commission on cancer-accredited cancer program as an
20in-network covered benefit.
21    Any medical or health care provider shall immediately
22recommend, to any pregnant woman who is being provided prenatal
23services and is suspected of drug abuse or is addicted as
24defined in the Alcoholism and Other Drug Abuse and Dependency
25Act, referral to a local substance abuse treatment provider
26licensed by the Department of Human Services or to a licensed

 

 

HB4300- 841 -LRB099 14379 HLH 38474 b

1hospital which provides substance abuse treatment services.
2The Department of Healthcare and Family Services shall assure
3coverage for the cost of treatment of the drug abuse or
4addiction for pregnant recipients in accordance with the
5Illinois Medicaid Program in conjunction with the Department of
6Human Services.
7    All medical providers providing medical assistance to
8pregnant women under this Code shall receive information from
9the Department on the availability of services under the Drug
10Free Families with a Future or any comparable program providing
11case management services for addicted women, including
12information on appropriate referrals for other social services
13that may be needed by addicted women in addition to treatment
14for addiction.
15    The Illinois Department, in cooperation with the
16Departments of Human Services (as successor to the Department
17of Alcoholism and Substance Abuse) and Public Health, through a
18public awareness campaign, may provide information concerning
19treatment for alcoholism and drug abuse and addiction, prenatal
20health care, and other pertinent programs directed at reducing
21the number of drug-affected infants born to recipients of
22medical assistance.
23    Neither the Department of Healthcare and Family Services
24nor the Department of Human Services shall sanction the
25recipient solely on the basis of her substance abuse.
26    The Illinois Department shall establish such regulations

 

 

HB4300- 842 -LRB099 14379 HLH 38474 b

1governing the dispensing of health services under this Article
2as it shall deem appropriate. The Department should seek the
3advice of formal professional advisory committees appointed by
4the Director of the Illinois Department for the purpose of
5providing regular advice on policy and administrative matters,
6information dissemination and educational activities for
7medical and health care providers, and consistency in
8procedures to the Illinois Department.
9    The Illinois Department may develop and contract with
10Partnerships of medical providers to arrange medical services
11for persons eligible under Section 5-2 of this Code.
12Implementation of this Section may be by demonstration projects
13in certain geographic areas. The Partnership shall be
14represented by a sponsor organization. The Department, by rule,
15shall develop qualifications for sponsors of Partnerships.
16Nothing in this Section shall be construed to require that the
17sponsor organization be a medical organization.
18    The sponsor must negotiate formal written contracts with
19medical providers for physician services, inpatient and
20outpatient hospital care, home health services, treatment for
21alcoholism and substance abuse, and other services determined
22necessary by the Illinois Department by rule for delivery by
23Partnerships. Physician services must include prenatal and
24obstetrical care. The Illinois Department shall reimburse
25medical services delivered by Partnership providers to clients
26in target areas according to provisions of this Article and the

 

 

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1Illinois Health Finance Reform Act, except that:
2        (1) Physicians participating in a Partnership and
3    providing certain services, which shall be determined by
4    the Illinois Department, to persons in areas covered by the
5    Partnership may receive an additional surcharge for such
6    services.
7        (2) The Department may elect to consider and negotiate
8    financial incentives to encourage the development of
9    Partnerships and the efficient delivery of medical care.
10        (3) Persons receiving medical services through
11    Partnerships may receive medical and case management
12    services above the level usually offered through the
13    medical assistance program.
14    Medical providers shall be required to meet certain
15qualifications to participate in Partnerships to ensure the
16delivery of high quality medical services. These
17qualifications shall be determined by rule of the Illinois
18Department and may be higher than qualifications for
19participation in the medical assistance program. Partnership
20sponsors may prescribe reasonable additional qualifications
21for participation by medical providers, only with the prior
22written approval of the Illinois Department.
23    Nothing in this Section shall limit the free choice of
24practitioners, hospitals, and other providers of medical
25services by clients. In order to ensure patient freedom of
26choice, the Illinois Department shall immediately promulgate

 

 

HB4300- 844 -LRB099 14379 HLH 38474 b

1all rules and take all other necessary actions so that provided
2services may be accessed from therapeutically certified
3optometrists to the full extent of the Illinois Optometric
4Practice Act of 1987 without discriminating between service
5providers.
6    The Department shall apply for a waiver from the United
7States Health Care Financing Administration to allow for the
8implementation of Partnerships under this Section.
9    The Illinois Department shall require health care
10providers to maintain records that document the medical care
11and services provided to recipients of Medical Assistance under
12this Article. Such records must be retained for a period of not
13less than 6 years from the date of service or as provided by
14applicable State law, whichever period is longer, except that
15if an audit is initiated within the required retention period
16then the records must be retained until the audit is completed
17and every exception is resolved. The Illinois Department shall
18require health care providers to make available, when
19authorized by the patient, in writing, the medical records in a
20timely fashion to other health care providers who are treating
21or serving persons eligible for Medical Assistance under this
22Article. All dispensers of medical services shall be required
23to maintain and retain business and professional records
24sufficient to fully and accurately document the nature, scope,
25details and receipt of the health care provided to persons
26eligible for medical assistance under this Code, in accordance

 

 

HB4300- 845 -LRB099 14379 HLH 38474 b

1with regulations promulgated by the Illinois Department. The
2rules and regulations shall require that proof of the receipt
3of prescription drugs, dentures, prosthetic devices and
4eyeglasses by eligible persons under this Section accompany
5each claim for reimbursement submitted by the dispenser of such
6medical services. No such claims for reimbursement shall be
7approved for payment by the Illinois Department without such
8proof of receipt, unless the Illinois Department shall have put
9into effect and shall be operating a system of post-payment
10audit and review which shall, on a sampling basis, be deemed
11adequate by the Illinois Department to assure that such drugs,
12dentures, prosthetic devices and eyeglasses for which payment
13is being made are actually being received by eligible
14recipients. Within 90 days after the effective date of this
15amendatory Act of 1984, the Illinois Department shall establish
16a current list of acquisition costs for all prosthetic devices
17and any other items recognized as medical equipment and
18supplies reimbursable under this Article and shall update such
19list on a quarterly basis, except that the acquisition costs of
20all prescription drugs shall be updated no less frequently than
21every 30 days as required by Section 5-5.12.
22    The rules and regulations of the Illinois Department shall
23require that a written statement including the required opinion
24of a physician shall accompany any claim for reimbursement for
25abortions, or induced miscarriages or premature births. This
26statement shall indicate what procedures were used in providing

 

 

HB4300- 846 -LRB099 14379 HLH 38474 b

1such medical services.
2    Notwithstanding any other law to the contrary, the Illinois
3Department shall, within 365 days after July 22, 2013 (the
4effective date of Public Act 98-104), establish procedures to
5permit skilled care facilities licensed under the Nursing Home
6Care Act to submit monthly billing claims for reimbursement
7purposes. Following development of these procedures, the
8Department shall, by July 1, 2016, test the viability of the
9new system and implement any necessary operational or
10structural changes to its information technology platforms in
11order to allow for the direct acceptance and payment of nursing
12home claims.
13    Notwithstanding any other law to the contrary, the Illinois
14Department shall, within 365 days after August 15, 2014 (the
15effective date of Public Act 98-963), establish procedures to
16permit ID/DD facilities licensed under the ID/DD Community Care
17Act and MC/DD facilities licensed under the MC/DD Act to submit
18monthly billing claims for reimbursement purposes. Following
19development of these procedures, the Department shall have an
20additional 365 days to test the viability of the new system and
21to ensure that any necessary operational or structural changes
22to its information technology platforms are implemented.
23    The Illinois Department shall require all dispensers of
24medical services, other than an individual practitioner or
25group of practitioners, desiring to participate in the Medical
26Assistance program established under this Article to disclose

 

 

HB4300- 847 -LRB099 14379 HLH 38474 b

1all financial, beneficial, ownership, equity, surety or other
2interests in any and all firms, corporations, partnerships,
3associations, business enterprises, joint ventures, agencies,
4institutions or other legal entities providing any form of
5health care services in this State under this Article.
6    The Illinois Department may require that all dispensers of
7medical services desiring to participate in the medical
8assistance program established under this Article disclose,
9under such terms and conditions as the Illinois Department may
10by rule establish, all inquiries from clients and attorneys
11regarding medical bills paid by the Illinois Department, which
12inquiries could indicate potential existence of claims or liens
13for the Illinois Department.
14    Enrollment of a vendor shall be subject to a provisional
15period and shall be conditional for one year. During the period
16of conditional enrollment, the Department may terminate the
17vendor's eligibility to participate in, or may disenroll the
18vendor from, the medical assistance program without cause.
19Unless otherwise specified, such termination of eligibility or
20disenrollment is not subject to the Department's hearing
21process. However, a disenrolled vendor may reapply without
22penalty.
23    The Department has the discretion to limit the conditional
24enrollment period for vendors based upon category of risk of
25the vendor.
26    Prior to enrollment and during the conditional enrollment

 

 

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1period in the medical assistance program, all vendors shall be
2subject to enhanced oversight, screening, and review based on
3the risk of fraud, waste, and abuse that is posed by the
4category of risk of the vendor. The Illinois Department shall
5establish the procedures for oversight, screening, and review,
6which may include, but need not be limited to: criminal and
7financial background checks; fingerprinting; license,
8certification, and authorization verifications; unscheduled or
9unannounced site visits; database checks; prepayment audit
10reviews; audits; payment caps; payment suspensions; and other
11screening as required by federal or State law.
12    The Department shall define or specify the following: (i)
13by provider notice, the "category of risk of the vendor" for
14each type of vendor, which shall take into account the level of
15screening applicable to a particular category of vendor under
16federal law and regulations; (ii) by rule or provider notice,
17the maximum length of the conditional enrollment period for
18each category of risk of the vendor; and (iii) by rule, the
19hearing rights, if any, afforded to a vendor in each category
20of risk of the vendor that is terminated or disenrolled during
21the conditional enrollment period.
22    To be eligible for payment consideration, a vendor's
23payment claim or bill, either as an initial claim or as a
24resubmitted claim following prior rejection, must be received
25by the Illinois Department, or its fiscal intermediary, no
26later than 180 days after the latest date on the claim on which

 

 

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1medical goods or services were provided, with the following
2exceptions:
3        (1) In the case of a provider whose enrollment is in
4    process by the Illinois Department, the 180-day period
5    shall not begin until the date on the written notice from
6    the Illinois Department that the provider enrollment is
7    complete.
8        (2) In the case of errors attributable to the Illinois
9    Department or any of its claims processing intermediaries
10    which result in an inability to receive, process, or
11    adjudicate a claim, the 180-day period shall not begin
12    until the provider has been notified of the error.
13        (3) In the case of a provider for whom the Illinois
14    Department initiates the monthly billing process.
15        (4) In the case of a provider operated by a unit of
16    local government with a population exceeding 3,000,000
17    when local government funds finance federal participation
18    for claims payments.
19    For claims for services rendered during a period for which
20a recipient received retroactive eligibility, claims must be
21filed within 180 days after the Department determines the
22applicant is eligible. For claims for which the Illinois
23Department is not the primary payer, claims must be submitted
24to the Illinois Department within 180 days after the final
25adjudication by the primary payer.
26    In the case of long term care facilities, within 5 days of

 

 

HB4300- 850 -LRB099 14379 HLH 38474 b

1receipt by the facility of required prescreening information,
2data for new admissions shall be entered into the Medical
3Electronic Data Interchange (MEDI) or the Recipient
4Eligibility Verification (REV) System or successor system, and
5within 15 days of receipt by the facility of required
6prescreening information, admission documents shall be
7submitted through MEDI or REV or shall be submitted directly to
8the Department of Human Services using required admission
9forms. Effective September 1, 2014, admission documents,
10including all prescreening information, must be submitted
11through MEDI or REV. Confirmation numbers assigned to an
12accepted transaction shall be retained by a facility to verify
13timely submittal. Once an admission transaction has been
14completed, all resubmitted claims following prior rejection
15are subject to receipt no later than 180 days after the
16admission transaction has been completed.
17    Claims that are not submitted and received in compliance
18with the foregoing requirements shall not be eligible for
19payment under the medical assistance program, and the State
20shall have no liability for payment of those claims.
21    To the extent consistent with applicable information and
22privacy, security, and disclosure laws, State and federal
23agencies and departments shall provide the Illinois Department
24access to confidential and other information and data necessary
25to perform eligibility and payment verifications and other
26Illinois Department functions. This includes, but is not

 

 

HB4300- 851 -LRB099 14379 HLH 38474 b

1limited to: information pertaining to licensure;
2certification; earnings; immigration status; citizenship; wage
3reporting; unearned and earned income; pension income;
4employment; supplemental security income; social security
5numbers; National Provider Identifier (NPI) numbers; the
6National Practitioner Data Bank (NPDB); program and agency
7exclusions; taxpayer identification numbers; tax delinquency;
8corporate information; and death records.
9    The Illinois Department shall enter into agreements with
10State agencies and departments, and is authorized to enter into
11agreements with federal agencies and departments, under which
12such agencies and departments shall share data necessary for
13medical assistance program integrity functions and oversight.
14The Illinois Department shall develop, in cooperation with
15other State departments and agencies, and in compliance with
16applicable federal laws and regulations, appropriate and
17effective methods to share such data. At a minimum, and to the
18extent necessary to provide data sharing, the Illinois
19Department shall enter into agreements with State agencies and
20departments, and is authorized to enter into agreements with
21federal agencies and departments, including but not limited to:
22the Secretary of State; the Department of Revenue; the
23Department of Public Health; the Department of Human Services;
24and the Department of Financial and Professional Regulation.
25    Beginning in fiscal year 2013, the Illinois Department
26shall set forth a request for information to identify the

 

 

HB4300- 852 -LRB099 14379 HLH 38474 b

1benefits of a pre-payment, post-adjudication, and post-edit
2claims system with the goals of streamlining claims processing
3and provider reimbursement, reducing the number of pending or
4rejected claims, and helping to ensure a more transparent
5adjudication process through the utilization of: (i) provider
6data verification and provider screening technology; and (ii)
7clinical code editing; and (iii) pre-pay, pre- or
8post-adjudicated predictive modeling with an integrated case
9management system with link analysis. Such a request for
10information shall not be considered as a request for proposal
11or as an obligation on the part of the Illinois Department to
12take any action or acquire any products or services.
13    The Illinois Department shall establish policies,
14procedures, standards and criteria by rule for the acquisition,
15repair and replacement of orthotic and prosthetic devices and
16durable medical equipment. Such rules shall provide, but not be
17limited to, the following services: (1) immediate repair or
18replacement of such devices by recipients; and (2) rental,
19lease, purchase or lease-purchase of durable medical equipment
20in a cost-effective manner, taking into consideration the
21recipient's medical prognosis, the extent of the recipient's
22needs, and the requirements and costs for maintaining such
23equipment. Subject to prior approval, such rules shall enable a
24recipient to temporarily acquire and use alternative or
25substitute devices or equipment pending repairs or
26replacements of any device or equipment previously authorized

 

 

HB4300- 853 -LRB099 14379 HLH 38474 b

1for such recipient by the Department. The Department may
2contract with one or more third-party vendors and suppliers to
3supply durable medical equipment in a more cost-effective
4manner.
5    The Department shall execute, relative to the nursing home
6prescreening project, written inter-agency agreements with the
7Department of Human Services and the Department on Aging, to
8effect the following: (i) intake procedures and common
9eligibility criteria for those persons who are receiving
10non-institutional services; and (ii) the establishment and
11development of non-institutional services in areas of the State
12where they are not currently available or are undeveloped; and
13(iii) notwithstanding any other provision of law, subject to
14federal approval, on and after July 1, 2012, an increase in the
15determination of need (DON) scores from 29 to 37 for applicants
16for institutional and home and community-based long term care;
17if and only if federal approval is not granted, the Department
18may, in conjunction with other affected agencies, implement
19utilization controls or changes in benefit packages to
20effectuate a similar savings amount for this population; and
21(iv) no later than July 1, 2013, minimum level of care
22eligibility criteria for institutional and home and
23community-based long term care; and (v) no later than October
241, 2013, establish procedures to permit long term care
25providers access to eligibility scores for individuals with an
26admission date who are seeking or receiving services from the

 

 

HB4300- 854 -LRB099 14379 HLH 38474 b

1long term care provider. In order to select the minimum level
2of care eligibility criteria, the Governor shall establish a
3workgroup that includes affected agency representatives and
4stakeholders representing the institutional and home and
5community-based long term care interests. This Section shall
6not restrict the Department from implementing lower level of
7care eligibility criteria for community-based services in
8circumstances where federal approval has been granted.
9    The Illinois Department shall develop and operate, in
10cooperation with other State Departments and agencies and in
11compliance with applicable federal laws and regulations,
12appropriate and effective systems of health care evaluation and
13programs for monitoring of utilization of health care services
14and facilities, as it affects persons eligible for medical
15assistance under this Code.
16    The Illinois Department shall report annually to the
17General Assembly, no later than the second Friday in April of
181979 and each year thereafter, in regard to:
19        (a) actual statistics and trends in utilization of
20    medical services by public aid recipients;
21        (b) actual statistics and trends in the provision of
22    the various medical services by medical vendors;
23        (c) current rate structures and proposed changes in
24    those rate structures for the various medical vendors; and
25        (d) efforts at utilization review and control by the
26    Illinois Department.

 

 

HB4300- 855 -LRB099 14379 HLH 38474 b

1    The period covered by each report shall be the 3 years
2ending on the June 30 prior to the report. The report shall
3include suggested legislation for consideration by the General
4Assembly. The filing of one copy of the report with the
5Speaker, one copy with the Minority Leader and one copy with
6the Clerk of the House of Representatives, one copy with the
7President, one copy with the Minority Leader and one copy with
8the Secretary of the Senate, one copy with the Legislative
9Research Unit, and such additional copies with the State
10Government Report Distribution Center for the General Assembly
11as is required under paragraph (t) of Section 7 of the State
12Library Act shall be deemed sufficient to comply with this
13Section.
14    Rulemaking authority to implement Public Act 95-1045, if
15any, is conditioned on the rules being adopted in accordance
16with all provisions of the Illinois Administrative Procedure
17Act and all rules and procedures of the Joint Committee on
18Administrative Rules; any purported rule not so adopted, for
19whatever reason, is unauthorized.
20    On and after July 1, 2012, the Department shall reduce any
21rate of reimbursement for services or other payments or alter
22any methodologies authorized by this Code to reduce any rate of
23reimbursement for services or other payments in accordance with
24Section 5-5e.
25    Because kidney transplantation can be an appropriate, cost
26effective alternative to renal dialysis when medically

 

 

HB4300- 856 -LRB099 14379 HLH 38474 b

1necessary and notwithstanding the provisions of Section 1-11 of
2this Code, beginning October 1, 2014, the Department shall
3cover kidney transplantation for noncitizens with end-stage
4renal disease who are not eligible for comprehensive medical
5benefits, who meet the residency requirements of Section 5-3 of
6this Code, and who would otherwise meet the financial
7requirements of the appropriate class of eligible persons under
8Section 5-2 of this Code. To qualify for coverage of kidney
9transplantation, such person must be receiving emergency renal
10dialysis services covered by the Department. Providers under
11this Section shall be prior approved and certified by the
12Department to perform kidney transplantation and the services
13under this Section shall be limited to services associated with
14kidney transplantation.
15(Source: P.A. 98-104, Article 9, Section 9-5, eff. 7-22-13;
1698-104, Article 12, Section 12-20, eff. 7-22-13; 98-303, eff.
178-9-13; 98-463, eff. 8-16-13; 98-651, eff. 6-16-14; 98-756,
18eff. 7-16-14; 98-963, eff. 8-15-14; 99-78, eff. 7-20-15;
1999-180, eff. 7-29-15; 99-236, eff. 8-3-15; 99-433, eff.
208-21-15; revised 8-31-15.)
 
21    (Text of Section after amendment by P.A. 99-407)
22    Sec. 5-5. Medical services. The Illinois Department, by
23rule, shall determine the quantity and quality of and the rate
24of reimbursement for the medical assistance for which payment
25will be authorized, and the medical services to be provided,

 

 

HB4300- 857 -LRB099 14379 HLH 38474 b

1which may include all or part of the following: (1) inpatient
2hospital services; (2) outpatient hospital services; (3) other
3laboratory and X-ray services; (4) skilled nursing home
4services; (5) physicians' services whether furnished in the
5office, the patient's home, a hospital, a skilled nursing home,
6or elsewhere; (6) medical care, or any other type of remedial
7care furnished by licensed practitioners; (7) home health care
8services; (8) private duty nursing service; (9) clinic
9services; (10) dental services, including prevention and
10treatment of periodontal disease and dental caries disease for
11pregnant women, provided by an individual licensed to practice
12dentistry or dental surgery; for purposes of this item (10),
13"dental services" means diagnostic, preventive, or corrective
14procedures provided by or under the supervision of a dentist in
15the practice of his or her profession; (11) physical therapy
16and related services; (12) prescribed drugs, dentures, and
17prosthetic devices; and eyeglasses prescribed by a physician
18skilled in the diseases of the eye, or by an optometrist,
19whichever the person may select; (13) other diagnostic,
20screening, preventive, and rehabilitative services, including
21to ensure that the individual's need for intervention or
22treatment of mental disorders or substance use disorders or
23co-occurring mental health and substance use disorders is
24determined using a uniform screening, assessment, and
25evaluation process inclusive of criteria, for children and
26adults; for purposes of this item (13), a uniform screening,

 

 

HB4300- 858 -LRB099 14379 HLH 38474 b

1assessment, and evaluation process refers to a process that
2includes an appropriate evaluation and, as warranted, a
3referral; "uniform" does not mean the use of a singular
4instrument, tool, or process that all must utilize; (14)
5transportation and such other expenses as may be necessary;
6(15) medical treatment of sexual assault survivors, as defined
7in Section 1a of the Sexual Assault Survivors Emergency
8Treatment Act, for injuries sustained as a result of the sexual
9assault, including examinations and laboratory tests to
10discover evidence which may be used in criminal proceedings
11arising from the sexual assault; (16) the diagnosis and
12treatment of sickle cell anemia; and (17) any other medical
13care, and any other type of remedial care recognized under the
14laws of this State, but not including abortions, or induced
15miscarriages or premature births, unless, in the opinion of a
16physician, such procedures are necessary for the preservation
17of the life of the woman seeking such treatment, or except an
18induced premature birth intended to produce a live viable child
19and such procedure is necessary for the health of the mother or
20her unborn child. The Illinois Department, by rule, shall
21prohibit any physician from providing medical assistance to
22anyone eligible therefor under this Code where such physician
23has been found guilty of performing an abortion procedure in a
24wilful and wanton manner upon a woman who was not pregnant at
25the time such abortion procedure was performed. The term "any
26other type of remedial care" shall include nursing care and

 

 

HB4300- 859 -LRB099 14379 HLH 38474 b

1nursing home service for persons who rely on treatment by
2spiritual means alone through prayer for healing.
3    Notwithstanding any other provision of this Section, a
4comprehensive tobacco use cessation program that includes
5purchasing prescription drugs or prescription medical devices
6approved by the Food and Drug Administration shall be covered
7under the medical assistance program under this Article for
8persons who are otherwise eligible for assistance under this
9Article.
10    Notwithstanding any other provision of this Code, the
11Illinois Department may not require, as a condition of payment
12for any laboratory test authorized under this Article, that a
13physician's handwritten signature appear on the laboratory
14test order form. The Illinois Department may, however, impose
15other appropriate requirements regarding laboratory test order
16documentation.
17    Upon receipt of federal approval of an amendment to the
18Illinois Title XIX State Plan for this purpose, the Department
19shall authorize the Chicago Public Schools (CPS) to procure a
20vendor or vendors to manufacture eyeglasses for individuals
21enrolled in a school within the CPS system. CPS shall ensure
22that its vendor or vendors are enrolled as providers in the
23medical assistance program and in any capitated Medicaid
24managed care entity (MCE) serving individuals enrolled in a
25school within the CPS system. Under any contract procured under
26this provision, the vendor or vendors must serve only

 

 

HB4300- 860 -LRB099 14379 HLH 38474 b

1individuals enrolled in a school within the CPS system. Claims
2for services provided by CPS's vendor or vendors to recipients
3of benefits in the medical assistance program under this Code,
4the Children's Health Insurance Program, or the Covering ALL
5KIDS Health Insurance Program shall be submitted to the
6Department or the MCE in which the individual is enrolled for
7payment and shall be reimbursed at the Department's or the
8MCE's established rates or rate methodologies for eyeglasses.
9    On and after July 1, 2012, the Department of Healthcare and
10Family Services may provide the following services to persons
11eligible for assistance under this Article who are
12participating in education, training or employment programs
13operated by the Department of Human Services as successor to
14the Department of Public Aid:
15        (1) dental services provided by or under the
16    supervision of a dentist; and
17        (2) eyeglasses prescribed by a physician skilled in the
18    diseases of the eye, or by an optometrist, whichever the
19    person may select.
20    Notwithstanding any other provision of this Code and
21subject to federal approval, the Department may adopt rules to
22allow a dentist who is volunteering his or her service at no
23cost to render dental services through an enrolled
24not-for-profit health clinic without the dentist personally
25enrolling as a participating provider in the medical assistance
26program. A not-for-profit health clinic shall include a public

 

 

HB4300- 861 -LRB099 14379 HLH 38474 b

1health clinic or Federally Qualified Health Center or other
2enrolled provider, as determined by the Department, through
3which dental services covered under this Section are performed.
4The Department shall establish a process for payment of claims
5for reimbursement for covered dental services rendered under
6this provision.
7    The Illinois Department, by rule, may distinguish and
8classify the medical services to be provided only in accordance
9with the classes of persons designated in Section 5-2.
10    The Department of Healthcare and Family Services must
11provide coverage and reimbursement for amino acid-based
12elemental formulas, regardless of delivery method, for the
13diagnosis and treatment of (i) eosinophilic disorders and (ii)
14short bowel syndrome when the prescribing physician has issued
15a written order stating that the amino acid-based elemental
16formula is medically necessary.
17    The Illinois Department shall authorize the provision of,
18and shall authorize payment for, screening by low-dose
19mammography for the presence of occult breast cancer for women
2035 years of age or older who are eligible for medical
21assistance under this Article, as follows:
22        (A) A baseline mammogram for women 35 to 39 years of
23    age.
24        (B) An annual mammogram for women 40 years of age or
25    older.
26        (C) A mammogram at the age and intervals considered

 

 

HB4300- 862 -LRB099 14379 HLH 38474 b

1    medically necessary by the woman's health care provider for
2    women under 40 years of age and having a family history of
3    breast cancer, prior personal history of breast cancer,
4    positive genetic testing, or other risk factors.
5        (D) A comprehensive ultrasound screening of an entire
6    breast or breasts if a mammogram demonstrates
7    heterogeneous or dense breast tissue, when medically
8    necessary as determined by a physician licensed to practice
9    medicine in all of its branches.
10        (E) A screening MRI when medically necessary, as
11    determined by a physician licensed to practice medicine in
12    all of its branches.
13    All screenings shall include a physical breast exam,
14instruction on self-examination and information regarding the
15frequency of self-examination and its value as a preventative
16tool. For purposes of this Section, "low-dose mammography"
17means the x-ray examination of the breast using equipment
18dedicated specifically for mammography, including the x-ray
19tube, filter, compression device, and image receptor, with an
20average radiation exposure delivery of less than one rad per
21breast for 2 views of an average size breast. The term also
22includes digital mammography and includes breast
23tomosynthesis. As used in this Section, the term "breast
24tomosynthesis" means a radiologic procedure that involves the
25acquisition of projection images over the stationary breast to
26produce cross-sectional digital three-dimensional images of

 

 

HB4300- 863 -LRB099 14379 HLH 38474 b

1the breast.
2    On and after January 1, 2016, the Department shall ensure
3that all networks of care for adult clients of the Department
4include access to at least one breast imaging Center of Imaging
5Excellence as certified by the American College of Radiology.
6    On and after January 1, 2012, providers participating in a
7quality improvement program approved by the Department shall be
8reimbursed for screening and diagnostic mammography at the same
9rate as the Medicare program's rates, including the increased
10reimbursement for digital mammography.
11    The Department shall convene an expert panel including
12representatives of hospitals, free-standing mammography
13facilities, and doctors, including radiologists, to establish
14quality standards for mammography.
15    On and after January 1, 2017, providers participating in a
16breast cancer treatment quality improvement program approved
17by the Department shall be reimbursed for breast cancer
18treatment at a rate that is no lower than 95% of the Medicare
19program's rates for the data elements included in the breast
20cancer treatment quality program.
21    The Department shall convene an expert panel, including
22representatives of hospitals, free standing breast cancer
23treatment centers, breast cancer quality organizations, and
24doctors, including breast surgeons, reconstructive breast
25surgeons, oncologists, and primary care providers to establish
26quality standards for breast cancer treatment.

 

 

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1    Subject to federal approval, the Department shall
2establish a rate methodology for mammography at federally
3qualified health centers and other encounter-rate clinics.
4These clinics or centers may also collaborate with other
5hospital-based mammography facilities. By January 1, 2016, the
6Department shall report to the General Assembly on the status
7of the provision set forth in this paragraph.
8    The Department shall establish a methodology to remind
9women who are age-appropriate for screening mammography, but
10who have not received a mammogram within the previous 18
11months, of the importance and benefit of screening mammography.
12The Department shall work with experts in breast cancer
13outreach and patient navigation to optimize these reminders and
14shall establish a methodology for evaluating their
15effectiveness and modifying the methodology based on the
16evaluation.
17    The Department shall establish a performance goal for
18primary care providers with respect to their female patients
19over age 40 receiving an annual mammogram. This performance
20goal shall be used to provide additional reimbursement in the
21form of a quality performance bonus to primary care providers
22who meet that goal.
23    The Department shall devise a means of case-managing or
24patient navigation for beneficiaries diagnosed with breast
25cancer. This program shall initially operate as a pilot program
26in areas of the State with the highest incidence of mortality

 

 

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1related to breast cancer. At least one pilot program site shall
2be in the metropolitan Chicago area and at least one site shall
3be outside the metropolitan Chicago area. On or after July 1,
42016, the pilot program shall be expanded to include one site
5in western Illinois, one site in southern Illinois, one site in
6central Illinois, and 4 sites within metropolitan Chicago. An
7evaluation of the pilot program shall be carried out measuring
8health outcomes and cost of care for those served by the pilot
9program compared to similarly situated patients who are not
10served by the pilot program.
11    The Department shall require all networks of care to
12develop a means either internally or by contract with experts
13in navigation and community outreach to navigate cancer
14patients to comprehensive care in a timely fashion. The
15Department shall require all networks of care to include access
16for patients diagnosed with cancer to at least one academic
17commission on cancer-accredited cancer program as an
18in-network covered benefit.
19    Any medical or health care provider shall immediately
20recommend, to any pregnant woman who is being provided prenatal
21services and is suspected of drug abuse or is addicted as
22defined in the Alcoholism and Other Drug Abuse and Dependency
23Act, referral to a local substance abuse treatment provider
24licensed by the Department of Human Services or to a licensed
25hospital which provides substance abuse treatment services.
26The Department of Healthcare and Family Services shall assure

 

 

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1coverage for the cost of treatment of the drug abuse or
2addiction for pregnant recipients in accordance with the
3Illinois Medicaid Program in conjunction with the Department of
4Human Services.
5    All medical providers providing medical assistance to
6pregnant women under this Code shall receive information from
7the Department on the availability of services under the Drug
8Free Families with a Future or any comparable program providing
9case management services for addicted women, including
10information on appropriate referrals for other social services
11that may be needed by addicted women in addition to treatment
12for addiction.
13    The Illinois Department, in cooperation with the
14Departments of Human Services (as successor to the Department
15of Alcoholism and Substance Abuse) and Public Health, through a
16public awareness campaign, may provide information concerning
17treatment for alcoholism and drug abuse and addiction, prenatal
18health care, and other pertinent programs directed at reducing
19the number of drug-affected infants born to recipients of
20medical assistance.
21    Neither the Department of Healthcare and Family Services
22nor the Department of Human Services shall sanction the
23recipient solely on the basis of her substance abuse.
24    The Illinois Department shall establish such regulations
25governing the dispensing of health services under this Article
26as it shall deem appropriate. The Department should seek the

 

 

HB4300- 867 -LRB099 14379 HLH 38474 b

1advice of formal professional advisory committees appointed by
2the Director of the Illinois Department for the purpose of
3providing regular advice on policy and administrative matters,
4information dissemination and educational activities for
5medical and health care providers, and consistency in
6procedures to the Illinois Department.
7    The Illinois Department may develop and contract with
8Partnerships of medical providers to arrange medical services
9for persons eligible under Section 5-2 of this Code.
10Implementation of this Section may be by demonstration projects
11in certain geographic areas. The Partnership shall be
12represented by a sponsor organization. The Department, by rule,
13shall develop qualifications for sponsors of Partnerships.
14Nothing in this Section shall be construed to require that the
15sponsor organization be a medical organization.
16    The sponsor must negotiate formal written contracts with
17medical providers for physician services, inpatient and
18outpatient hospital care, home health services, treatment for
19alcoholism and substance abuse, and other services determined
20necessary by the Illinois Department by rule for delivery by
21Partnerships. Physician services must include prenatal and
22obstetrical care. The Illinois Department shall reimburse
23medical services delivered by Partnership providers to clients
24in target areas according to provisions of this Article and the
25Illinois Health Finance Reform Act, except that:
26        (1) Physicians participating in a Partnership and

 

 

HB4300- 868 -LRB099 14379 HLH 38474 b

1    providing certain services, which shall be determined by
2    the Illinois Department, to persons in areas covered by the
3    Partnership may receive an additional surcharge for such
4    services.
5        (2) The Department may elect to consider and negotiate
6    financial incentives to encourage the development of
7    Partnerships and the efficient delivery of medical care.
8        (3) Persons receiving medical services through
9    Partnerships may receive medical and case management
10    services above the level usually offered through the
11    medical assistance program.
12    Medical providers shall be required to meet certain
13qualifications to participate in Partnerships to ensure the
14delivery of high quality medical services. These
15qualifications shall be determined by rule of the Illinois
16Department and may be higher than qualifications for
17participation in the medical assistance program. Partnership
18sponsors may prescribe reasonable additional qualifications
19for participation by medical providers, only with the prior
20written approval of the Illinois Department.
21    Nothing in this Section shall limit the free choice of
22practitioners, hospitals, and other providers of medical
23services by clients. In order to ensure patient freedom of
24choice, the Illinois Department shall immediately promulgate
25all rules and take all other necessary actions so that provided
26services may be accessed from therapeutically certified

 

 

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1optometrists to the full extent of the Illinois Optometric
2Practice Act of 1987 without discriminating between service
3providers.
4    The Department shall apply for a waiver from the United
5States Health Care Financing Administration to allow for the
6implementation of Partnerships under this Section.
7    The Illinois Department shall require health care
8providers to maintain records that document the medical care
9and services provided to recipients of Medical Assistance under
10this Article. Such records must be retained for a period of not
11less than 6 years from the date of service or as provided by
12applicable State law, whichever period is longer, except that
13if an audit is initiated within the required retention period
14then the records must be retained until the audit is completed
15and every exception is resolved. The Illinois Department shall
16require health care providers to make available, when
17authorized by the patient, in writing, the medical records in a
18timely fashion to other health care providers who are treating
19or serving persons eligible for Medical Assistance under this
20Article. All dispensers of medical services shall be required
21to maintain and retain business and professional records
22sufficient to fully and accurately document the nature, scope,
23details and receipt of the health care provided to persons
24eligible for medical assistance under this Code, in accordance
25with regulations promulgated by the Illinois Department. The
26rules and regulations shall require that proof of the receipt

 

 

HB4300- 870 -LRB099 14379 HLH 38474 b

1of prescription drugs, dentures, prosthetic devices and
2eyeglasses by eligible persons under this Section accompany
3each claim for reimbursement submitted by the dispenser of such
4medical services. No such claims for reimbursement shall be
5approved for payment by the Illinois Department without such
6proof of receipt, unless the Illinois Department shall have put
7into effect and shall be operating a system of post-payment
8audit and review which shall, on a sampling basis, be deemed
9adequate by the Illinois Department to assure that such drugs,
10dentures, prosthetic devices and eyeglasses for which payment
11is being made are actually being received by eligible
12recipients. Within 90 days after the effective date of this
13amendatory Act of 1984, the Illinois Department shall establish
14a current list of acquisition costs for all prosthetic devices
15and any other items recognized as medical equipment and
16supplies reimbursable under this Article and shall update such
17list on a quarterly basis, except that the acquisition costs of
18all prescription drugs shall be updated no less frequently than
19every 30 days as required by Section 5-5.12.
20    The rules and regulations of the Illinois Department shall
21require that a written statement including the required opinion
22of a physician shall accompany any claim for reimbursement for
23abortions, or induced miscarriages or premature births. This
24statement shall indicate what procedures were used in providing
25such medical services.
26    Notwithstanding any other law to the contrary, the Illinois

 

 

HB4300- 871 -LRB099 14379 HLH 38474 b

1Department shall, within 365 days after July 22, 2013 (the
2effective date of Public Act 98-104), establish procedures to
3permit skilled care facilities licensed under the Nursing Home
4Care Act to submit monthly billing claims for reimbursement
5purposes. Following development of these procedures, the
6Department shall, by July 1, 2016, test the viability of the
7new system and implement any necessary operational or
8structural changes to its information technology platforms in
9order to allow for the direct acceptance and payment of nursing
10home claims.
11    Notwithstanding any other law to the contrary, the Illinois
12Department shall, within 365 days after August 15, 2014 (the
13effective date of Public Act 98-963), establish procedures to
14permit ID/DD facilities licensed under the ID/DD Community Care
15Act and MC/DD facilities licensed under the MC/DD Act to submit
16monthly billing claims for reimbursement purposes. Following
17development of these procedures, the Department shall have an
18additional 365 days to test the viability of the new system and
19to ensure that any necessary operational or structural changes
20to its information technology platforms are implemented.
21    The Illinois Department shall require all dispensers of
22medical services, other than an individual practitioner or
23group of practitioners, desiring to participate in the Medical
24Assistance program established under this Article to disclose
25all financial, beneficial, ownership, equity, surety or other
26interests in any and all firms, corporations, partnerships,

 

 

HB4300- 872 -LRB099 14379 HLH 38474 b

1associations, business enterprises, joint ventures, agencies,
2institutions or other legal entities providing any form of
3health care services in this State under this Article.
4    The Illinois Department may require that all dispensers of
5medical services desiring to participate in the medical
6assistance program established under this Article disclose,
7under such terms and conditions as the Illinois Department may
8by rule establish, all inquiries from clients and attorneys
9regarding medical bills paid by the Illinois Department, which
10inquiries could indicate potential existence of claims or liens
11for the Illinois Department.
12    Enrollment of a vendor shall be subject to a provisional
13period and shall be conditional for one year. During the period
14of conditional enrollment, the Department may terminate the
15vendor's eligibility to participate in, or may disenroll the
16vendor from, the medical assistance program without cause.
17Unless otherwise specified, such termination of eligibility or
18disenrollment is not subject to the Department's hearing
19process. However, a disenrolled vendor may reapply without
20penalty.
21    The Department has the discretion to limit the conditional
22enrollment period for vendors based upon category of risk of
23the vendor.
24    Prior to enrollment and during the conditional enrollment
25period in the medical assistance program, all vendors shall be
26subject to enhanced oversight, screening, and review based on

 

 

HB4300- 873 -LRB099 14379 HLH 38474 b

1the risk of fraud, waste, and abuse that is posed by the
2category of risk of the vendor. The Illinois Department shall
3establish the procedures for oversight, screening, and review,
4which may include, but need not be limited to: criminal and
5financial background checks; fingerprinting; license,
6certification, and authorization verifications; unscheduled or
7unannounced site visits; database checks; prepayment audit
8reviews; audits; payment caps; payment suspensions; and other
9screening as required by federal or State law.
10    The Department shall define or specify the following: (i)
11by provider notice, the "category of risk of the vendor" for
12each type of vendor, which shall take into account the level of
13screening applicable to a particular category of vendor under
14federal law and regulations; (ii) by rule or provider notice,
15the maximum length of the conditional enrollment period for
16each category of risk of the vendor; and (iii) by rule, the
17hearing rights, if any, afforded to a vendor in each category
18of risk of the vendor that is terminated or disenrolled during
19the conditional enrollment period.
20    To be eligible for payment consideration, a vendor's
21payment claim or bill, either as an initial claim or as a
22resubmitted claim following prior rejection, must be received
23by the Illinois Department, or its fiscal intermediary, no
24later than 180 days after the latest date on the claim on which
25medical goods or services were provided, with the following
26exceptions:

 

 

HB4300- 874 -LRB099 14379 HLH 38474 b

1        (1) In the case of a provider whose enrollment is in
2    process by the Illinois Department, the 180-day period
3    shall not begin until the date on the written notice from
4    the Illinois Department that the provider enrollment is
5    complete.
6        (2) In the case of errors attributable to the Illinois
7    Department or any of its claims processing intermediaries
8    which result in an inability to receive, process, or
9    adjudicate a claim, the 180-day period shall not begin
10    until the provider has been notified of the error.
11        (3) In the case of a provider for whom the Illinois
12    Department initiates the monthly billing process.
13        (4) In the case of a provider operated by a unit of
14    local government with a population exceeding 3,000,000
15    when local government funds finance federal participation
16    for claims payments.
17    For claims for services rendered during a period for which
18a recipient received retroactive eligibility, claims must be
19filed within 180 days after the Department determines the
20applicant is eligible. For claims for which the Illinois
21Department is not the primary payer, claims must be submitted
22to the Illinois Department within 180 days after the final
23adjudication by the primary payer.
24    In the case of long term care facilities, within 5 days of
25receipt by the facility of required prescreening information,
26data for new admissions shall be entered into the Medical

 

 

HB4300- 875 -LRB099 14379 HLH 38474 b

1Electronic Data Interchange (MEDI) or the Recipient
2Eligibility Verification (REV) System or successor system, and
3within 15 days of receipt by the facility of required
4prescreening information, admission documents shall be
5submitted through MEDI or REV or shall be submitted directly to
6the Department of Human Services using required admission
7forms. Effective September 1, 2014, admission documents,
8including all prescreening information, must be submitted
9through MEDI or REV. Confirmation numbers assigned to an
10accepted transaction shall be retained by a facility to verify
11timely submittal. Once an admission transaction has been
12completed, all resubmitted claims following prior rejection
13are subject to receipt no later than 180 days after the
14admission transaction has been completed.
15    Claims that are not submitted and received in compliance
16with the foregoing requirements shall not be eligible for
17payment under the medical assistance program, and the State
18shall have no liability for payment of those claims.
19    To the extent consistent with applicable information and
20privacy, security, and disclosure laws, State and federal
21agencies and departments shall provide the Illinois Department
22access to confidential and other information and data necessary
23to perform eligibility and payment verifications and other
24Illinois Department functions. This includes, but is not
25limited to: information pertaining to licensure;
26certification; earnings; immigration status; citizenship; wage

 

 

HB4300- 876 -LRB099 14379 HLH 38474 b

1reporting; unearned and earned income; pension income;
2employment; supplemental security income; social security
3numbers; National Provider Identifier (NPI) numbers; the
4National Practitioner Data Bank (NPDB); program and agency
5exclusions; taxpayer identification numbers; tax delinquency;
6corporate information; and death records.
7    The Illinois Department shall enter into agreements with
8State agencies and departments, and is authorized to enter into
9agreements with federal agencies and departments, under which
10such agencies and departments shall share data necessary for
11medical assistance program integrity functions and oversight.
12The Illinois Department shall develop, in cooperation with
13other State departments and agencies, and in compliance with
14applicable federal laws and regulations, appropriate and
15effective methods to share such data. At a minimum, and to the
16extent necessary to provide data sharing, the Illinois
17Department shall enter into agreements with State agencies and
18departments, and is authorized to enter into agreements with
19federal agencies and departments, including but not limited to:
20the Secretary of State; the Department of Revenue; the
21Department of Public Health; the Department of Human Services;
22and the Department of Financial and Professional Regulation.
23    Beginning in fiscal year 2013, the Illinois Department
24shall set forth a request for information to identify the
25benefits of a pre-payment, post-adjudication, and post-edit
26claims system with the goals of streamlining claims processing

 

 

HB4300- 877 -LRB099 14379 HLH 38474 b

1and provider reimbursement, reducing the number of pending or
2rejected claims, and helping to ensure a more transparent
3adjudication process through the utilization of: (i) provider
4data verification and provider screening technology; and (ii)
5clinical code editing; and (iii) pre-pay, pre- or
6post-adjudicated predictive modeling with an integrated case
7management system with link analysis. Such a request for
8information shall not be considered as a request for proposal
9or as an obligation on the part of the Illinois Department to
10take any action or acquire any products or services.
11    The Illinois Department shall establish policies,
12procedures, standards and criteria by rule for the acquisition,
13repair and replacement of orthotic and prosthetic devices and
14durable medical equipment. Such rules shall provide, but not be
15limited to, the following services: (1) immediate repair or
16replacement of such devices by recipients; and (2) rental,
17lease, purchase or lease-purchase of durable medical equipment
18in a cost-effective manner, taking into consideration the
19recipient's medical prognosis, the extent of the recipient's
20needs, and the requirements and costs for maintaining such
21equipment. Subject to prior approval, such rules shall enable a
22recipient to temporarily acquire and use alternative or
23substitute devices or equipment pending repairs or
24replacements of any device or equipment previously authorized
25for such recipient by the Department. The Department may
26contract with one or more third-party vendors and suppliers to

 

 

HB4300- 878 -LRB099 14379 HLH 38474 b

1supply durable medical equipment in a more cost-effective
2manner.
3    The Department shall execute, relative to the nursing home
4prescreening project, written inter-agency agreements with the
5Department of Human Services and the Department on Aging, to
6effect the following: (i) intake procedures and common
7eligibility criteria for those persons who are receiving
8non-institutional services; and (ii) the establishment and
9development of non-institutional services in areas of the State
10where they are not currently available or are undeveloped; and
11(iii) notwithstanding any other provision of law, subject to
12federal approval, on and after July 1, 2012, an increase in the
13determination of need (DON) scores from 29 to 37 for applicants
14for institutional and home and community-based long term care;
15if and only if federal approval is not granted, the Department
16may, in conjunction with other affected agencies, implement
17utilization controls or changes in benefit packages to
18effectuate a similar savings amount for this population; and
19(iv) no later than July 1, 2013, minimum level of care
20eligibility criteria for institutional and home and
21community-based long term care; and (v) no later than October
221, 2013, establish procedures to permit long term care
23providers access to eligibility scores for individuals with an
24admission date who are seeking or receiving services from the
25long term care provider. In order to select the minimum level
26of care eligibility criteria, the Governor shall establish a

 

 

HB4300- 879 -LRB099 14379 HLH 38474 b

1workgroup that includes affected agency representatives and
2stakeholders representing the institutional and home and
3community-based long term care interests. This Section shall
4not restrict the Department from implementing lower level of
5care eligibility criteria for community-based services in
6circumstances where federal approval has been granted.
7    The Illinois Department shall develop and operate, in
8cooperation with other State Departments and agencies and in
9compliance with applicable federal laws and regulations,
10appropriate and effective systems of health care evaluation and
11programs for monitoring of utilization of health care services
12and facilities, as it affects persons eligible for medical
13assistance under this Code.
14    The Illinois Department shall report annually to the
15General Assembly, no later than the second Friday in April of
161979 and each year thereafter, in regard to:
17        (a) actual statistics and trends in utilization of
18    medical services by public aid recipients;
19        (b) actual statistics and trends in the provision of
20    the various medical services by medical vendors;
21        (c) current rate structures and proposed changes in
22    those rate structures for the various medical vendors; and
23        (d) efforts at utilization review and control by the
24    Illinois Department.
25    The period covered by each report shall be the 3 years
26ending on the June 30 prior to the report. The report shall

 

 

HB4300- 880 -LRB099 14379 HLH 38474 b

1include suggested legislation for consideration by the General
2Assembly. The filing of one copy of the report with the
3Speaker, one copy with the Minority Leader and one copy with
4the Clerk of the House of Representatives, one copy with the
5President, one copy with the Minority Leader and one copy with
6the Secretary of the Senate, one copy with the Legislative
7Research Unit, and such additional copies with the State
8Government Report Distribution Center for the General Assembly
9as is required under paragraph (t) of Section 7 of the State
10Library Act shall be deemed sufficient to comply with this
11Section.
12    Rulemaking authority to implement Public Act 95-1045, if
13any, is conditioned on the rules being adopted in accordance
14with all provisions of the Illinois Administrative Procedure
15Act and all rules and procedures of the Joint Committee on
16Administrative Rules; any purported rule not so adopted, for
17whatever reason, is unauthorized.
18    On and after July 1, 2012, the Department shall reduce any
19rate of reimbursement for services or other payments or alter
20any methodologies authorized by this Code to reduce any rate of
21reimbursement for services or other payments in accordance with
22Section 5-5e.
23    Because kidney transplantation can be an appropriate, cost
24effective alternative to renal dialysis when medically
25necessary and notwithstanding the provisions of Section 1-11 of
26this Code, beginning October 1, 2014, the Department shall

 

 

HB4300- 881 -LRB099 14379 HLH 38474 b

1cover kidney transplantation for noncitizens with end-stage
2renal disease who are not eligible for comprehensive medical
3benefits, who meet the residency requirements of Section 5-3 of
4this Code, and who would otherwise meet the financial
5requirements of the appropriate class of eligible persons under
6Section 5-2 of this Code. To qualify for coverage of kidney
7transplantation, such person must be receiving emergency renal
8dialysis services covered by the Department. Providers under
9this Section shall be prior approved and certified by the
10Department to perform kidney transplantation and the services
11under this Section shall be limited to services associated with
12kidney transplantation.
13(Source: P.A. 98-104, Article 9, Section 9-5, eff. 7-22-13;
1498-104, Article 12, Section 12-20, eff. 7-22-13; 98-303, eff.
158-9-13; 98-463, eff. 8-16-13; 98-651, eff. 6-16-14; 98-756,
16eff. 7-16-14; 98-963, eff. 8-15-14; 99-78, eff. 7-20-15;
1799-180, eff. 7-29-15; 99-236, eff. 8-3-15; 99-407 (see Section
1899 of P.A. 99-407 for its effective date); 99-433, eff.
198-21-15; revised 8-31-15.)
 
20    (305 ILCS 5/5-5.2)  (from Ch. 23, par. 5-5.2)
21    Sec. 5-5.2. Payment.
22    (a) All nursing facilities that are grouped pursuant to
23Section 5-5.1 of this Act shall receive the same rate of
24payment for similar services.
25    (b) It shall be a matter of State policy that the Illinois

 

 

HB4300- 882 -LRB099 14379 HLH 38474 b

1Department shall utilize a uniform billing cycle throughout the
2State for the long-term care providers.
3    (c) Notwithstanding any other provisions of this Code, the
4methodologies for reimbursement of nursing services as
5provided under this Article shall no longer be applicable for
6bills payable for nursing services rendered on or after a new
7reimbursement system based on the Resource Utilization Groups
8(RUGs) has been fully operationalized, which shall take effect
9for services provided on or after January 1, 2014.
10    (d) The new nursing services reimbursement methodology
11utilizing RUG-IV 48 grouper model, which shall be referred to
12as the RUGs reimbursement system, taking effect January 1,
132014, shall be based on the following:
14        (1) The methodology shall be resident-driven,
15    facility-specific, and cost-based.
16        (2) Costs shall be annually rebased and case mix index
17    quarterly updated. The nursing services methodology will
18    be assigned to the Medicaid enrolled residents on record as
19    of 30 days prior to the beginning of the rate period in the
20    Department's Medicaid Management Information System (MMIS)
21    as present on the last day of the second quarter preceding
22    the rate period based upon the Assessment Reference Date of
23    the Minimum Data Set (MDS).
24        (3) Regional wage adjustors based on the Health Service
25    Areas (HSA) groupings and adjusters in effect on April 30,
26    2012 shall be included.

 

 

HB4300- 883 -LRB099 14379 HLH 38474 b

1        (4) Case mix index shall be assigned to each resident
2    class based on the Centers for Medicare and Medicaid
3    Services staff time measurement study in effect on July 1,
4    2013, utilizing an index maximization approach.
5        (5) The pool of funds available for distribution by
6    case mix and the base facility rate shall be determined
7    using the formula contained in subsection (d-1).
8    (d-1) Calculation of base year Statewide RUG-IV nursing
9base per diem rate.
10        (1) Base rate spending pool shall be:
11            (A) The base year resident days which are
12        calculated by multiplying the number of Medicaid
13        residents in each nursing home as indicated in the MDS
14        data defined in paragraph (4) by 365.
15            (B) Each facility's nursing component per diem in
16        effect on July 1, 2012 shall be multiplied by
17        subsection (A).
18            (C) Thirteen million is added to the product of
19        subparagraph (A) and subparagraph (B) to adjust for the
20        exclusion of nursing homes defined in paragraph (5).
21        (2) For each nursing home with Medicaid residents as
22    indicated by the MDS data defined in paragraph (4),
23    weighted days adjusted for case mix and regional wage
24    adjustment shall be calculated. For each home this
25    calculation is the product of:
26            (A) Base year resident days as calculated in

 

 

HB4300- 884 -LRB099 14379 HLH 38474 b

1        subparagraph (A) of paragraph (1).
2            (B) The nursing home's regional wage adjustor
3        based on the Health Service Areas (HSA) groupings and
4        adjustors in effect on April 30, 2012.
5            (C) Facility weighted case mix which is the number
6        of Medicaid residents as indicated by the MDS data
7        defined in paragraph (4) multiplied by the associated
8        case weight for the RUG-IV 48 grouper model using
9        standard RUG-IV procedures for index maximization.
10            (D) The sum of the products calculated for each
11        nursing home in subparagraphs (A) through (C) above
12        shall be the base year case mix, rate adjusted weighted
13        days.
14        (3) The Statewide RUG-IV nursing base per diem rate:
15            (A) on January 1, 2014 shall be the quotient of the
16        paragraph (1) divided by the sum calculated under
17        subparagraph (D) of paragraph (2); and
18            (B) on and after July 1, 2014, shall be the amount
19        calculated under subparagraph (A) of this paragraph
20        (3) plus $1.76.
21        (4) Minimum Data Set (MDS) comprehensive assessments
22    for Medicaid residents on the last day of the quarter used
23    to establish the base rate.
24        (5) Nursing facilities designated as of July 1, 2012 by
25    the Department as "Institutions for Mental Disease" shall
26    be excluded from all calculations under this subsection.

 

 

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1    The data from these facilities shall not be used in the
2    computations described in paragraphs (1) through (4) above
3    to establish the base rate.
4    (e) Beginning July 1, 2014, the Department shall allocate
5funding in the amount up to $10,000,000 for per diem add-ons to
6the RUGS methodology for dates of service on and after July 1,
72014:
8        (1) $0.63 for each resident who scores in I4200
9    Alzheimer's Disease or I4800 non-Alzheimer's Dementia.
10        (2) $2.67 for each resident who scores either a "1" or
11    "2" in any items S1200A through S1200I and also scores in
12    RUG groups PA1, PA2, BA1, or BA2.
13    (e-1) (Blank).
14    (e-2) For dates of services beginning January 1, 2014, the
15RUG-IV nursing component per diem for a nursing home shall be
16the product of the statewide RUG-IV nursing base per diem rate,
17the facility average case mix index, and the regional wage
18adjustor. Transition rates for services provided between
19January 1, 2014 and December 31, 2014 shall be as follows:
20        (1) The transition RUG-IV per diem nursing rate for
21    nursing homes whose rate calculated in this subsection
22    (e-2) is greater than the nursing component rate in effect
23    July 1, 2012 shall be paid the sum of:
24            (A) The nursing component rate in effect July 1,
25        2012; plus
26            (B) The difference of the RUG-IV nursing component

 

 

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1        per diem calculated for the current quarter minus the
2        nursing component rate in effect July 1, 2012
3        multiplied by 0.88.
4        (2) The transition RUG-IV per diem nursing rate for
5    nursing homes whose rate calculated in this subsection
6    (e-2) is less than the nursing component rate in effect
7    July 1, 2012 shall be paid the sum of:
8            (A) The nursing component rate in effect July 1,
9        2012; plus
10            (B) The difference of the RUG-IV nursing component
11        per diem calculated for the current quarter minus the
12        nursing component rate in effect July 1, 2012
13        multiplied by 0.13.
14    (f) Notwithstanding any other provision of this Code, on
15and after July 1, 2012, reimbursement rates associated with the
16nursing or support components of the current nursing facility
17rate methodology shall not increase beyond the level effective
18May 1, 2011 until a new reimbursement system based on the RUGs
19IV 48 grouper model has been fully operationalized.
20    (g) Notwithstanding any other provision of this Code, on
21and after July 1, 2012, for facilities not designated by the
22Department of Healthcare and Family Services as "Institutions
23for Mental Disease", rates effective May 1, 2011 shall be
24adjusted as follows:
25        (1) Individual nursing rates for residents classified
26    in RUG IV groups PA1, PA2, BA1, and BA2 during the quarter

 

 

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1    ending March 31, 2012 shall be reduced by 10%;
2        (2) Individual nursing rates for residents classified
3    in all other RUG IV groups shall be reduced by 1.0%;
4        (3) Facility rates for the capital and support
5    components shall be reduced by 1.7%.
6    (h) Notwithstanding any other provision of this Code, on
7and after July 1, 2012, nursing facilities designated by the
8Department of Healthcare and Family Services as "Institutions
9for Mental Disease" and "Institutions for Mental Disease" that
10are facilities licensed under the Specialized Mental Health
11Rehabilitation Act of 2013 shall have the nursing,
12socio-developmental, capital, and support components of their
13reimbursement rate effective May 1, 2011 reduced in total by
142.7%.
15    (i) On and after July 1, 2014, the reimbursement rates for
16the support component of the nursing facility rate for
17facilities licensed under the Nursing Home Care Act as skilled
18or intermediate care facilities shall be the rate in effect on
19June 30, 2014 increased by 8.17%.
20    (j) The Department may contract with a third-party auditor
21to perform auditing to determine the accuracy of resident
22assessment information transmitted in the MDS that is relevant
23to the determination of reimbursement rates.
24(Source: P.A. 98-104, Article 6, Section 6-240, eff. 7-22-13;
2598-104, Article 11, Section 11-35, eff. 7-22-13; 98-651, eff.
266-16-14; 98-727, eff. 7-16-14; 98-756, eff. 7-16-14; 99-78,

 

 

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1eff. 7-20-15.)
 
2    (305 ILCS 5/5-5b.1a new)
3    Sec. 5-5b.1a. Pharmacy services; dispensing fees. For
4pharmacy services limited to the dispensing fees reduced in
5State fiscal year 2015 under Section 5-5b.1, the dispensing
6fees in State fiscal year 2016 shall be $2.35 for brand name
7drugs and $5.38 for generic drugs. Reimbursement methodology
8for product shall not be reduced as a result of this Section.
9This Section does not prevent the Department from making
10customary adjustments to pharmacy product prices for the
11State's Maximum Allowable Cost list for generic prescription
12medicines.
 
13    (305 ILCS 5/5-5b.2 new)
14    Sec. 5-5b.2. Reimbursement rates; fiscal year 2016
15reductions; fiscal year 2017 reductions.
16    (a) Except as provided in subsections (b) and (b-1),
17notwithstanding any other provision of this Code to the
18contrary, and subject to rescission if not federally approved,
19providers of the following services shall have their
20reimbursement rates or dispensing fees reduced for State fiscal
21year 2016. For each provider class, the Department must
22calculate a rate reduction which produces for each service type
23a total reduction in State fiscal year 2016 no greater than an
24amount equal to the product of 2.25% multiplied by the

 

 

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1originally enacted State fiscal year 2015 appropriations from
2the General Revenue Fund for each medical service type. The
3Department must only use appropriations from the General
4Revenue Fund to calculate the rate reduction amount for each
5service type. The rate reduction shall be applied equally to
6all services within the service type regardless of the fund
7from which payment is made. Medical services subject to rate
8reduction in State fiscal year 2016 are the following:
9        (1) Nursing facility services delivered by a nursing
10    facility licensed under the Nursing Home Care Act.
11        (2) Home health services.
12        (3) Services delivered by a supportive living facility
13    as defined in Section 5-5.01a.
14        (4) Services delivered by a specialized mental health
15    rehabilitation facility licensed under the Specialized
16    Mental Health Rehabilitation Act of 2013.
17        (5) Medical transportation services, including
18    services delivered by a hospital, provided by (i) emergency
19    and non-emergency ground and air ambulance, (ii) medi-car,
20    (iii) service car, and (iv) taxi cab.
21        (6) Capitation payment rates to managed care entities
22    shall include all reductions for those services as provided
23    in this Section, as well as reductions in the
24    administrative portion of the capitation rate. All
25    reductions shall be made in an actuarially sound manner.
26        (7) Services for the treatment of hemophilia.

 

 

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1        (8) Physician services.
2        (9) Dental services.
3        (10) Optometric services.
4        (11) Podiatry services.
5        (12) Laboratory services or services provided by
6    independent laboratories.
7        (13) Durable medical equipment and supplies.
8        (14) Renal dialysis services.
9        (15) Birth Center Services.
10        (16) Emergency services other than those offered by or
11    in a hospital.
12    (a-1) Notwithstanding any other provision of this Code to
13the contrary, and subject to rescission if not federally
14approved, beginning with State fiscal year 2017, and for each
15fiscal year thereafter, managed care entities shall have their
16capitation payment rates reduced by no greater than an amount
17equal to the product of 1.6% multiplied by the appropriations
18from the General Revenue Fund for the preceding fiscal year.
19The Department must only use appropriations from the General
20Revenue Fund to calculate the rate reduction.
21    (b) No provider shall be exempt from the rate reductions
22authorized under this Section, except that rates or payments,
23or the portion thereof, paid for private duty nursing services
24or paid to a provider that is operated by a unit of government
25that provides the non-federal share of such services shall not
26be reduced as provided in this Section.

 

 

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1    (b-1) The Department shall develop a State fiscal year 2016
2blended rate for nursing services provided by facilities
3licensed under the Nursing Home Care Act that takes into
4account the State fiscal year 2016 appropriation from the
5Long-Term Care Provider Fund and the adjusted State fiscal year
62016 appropriation for nursing services from the General
7Revenue Fund. The State fiscal year 2016 blended rate shall
8produce a savings to the State for fiscal year 2016 no greater
9than an amount equal to the product of 2.25% multiplied by the
10originally enacted State fiscal year 2015 appropriations from
11the General Revenue Fund for nursing services. The State fiscal
12year 2016 blended rate shall be applied to all nursing services
13regardless of the source from which payment is made.
14    (c) For any rates which the Department cannot reduce due to
15federal law, court order, or specific statutory exemptions, the
16Department must identify the sum of reductions which cannot be
17attained. The sum must be proportionally distributed and added
18into the originally enacted State fiscal year 2015
19appropriations from the General Revenue Fund for each medical
20service type prior to the calculation of the rate reduction
21specified in subsection (a). The Department may not
22redistribute reductions in any other manner.
23    The reductions required under this Section must be applied
24uniformly to all providers who deliver the same medical service
25type.
26    (d) In order to provide for the expeditious and timely

 

 

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1implementation of the provisions of this Section, the
2Department shall adopt rules and may adopt emergency rules in
3accordance with subsection (s) of Section 5-45 of the Illinois
4Administrative Procedure Act.
 
5    (305 ILCS 5/5-30.3 new)
6    Sec. 5-30.3. Managed care; wards of the Department of
7Children and Family Services. The Department shall seek a
8waiver from the federal Centers for Medicare and Medicaid
9Services to allow mandatory enrollment of wards of the
10Department of Children and Family Services into Medicaid
11managed care and care coordination plans. The Department must
12submit a waiver request to the federal Centers for Medicare and
13Medicaid Services no later than October 1, 2015 and shall take
14all necessary actions to obtain approval, including appeal of
15any denial. Beginning January 1, 2016, the Department shall
16report progress on the waiver required under this Section and
17shall report quarterly until the waiver request is approved or
18denied. Upon federal approval, the Department shall develop a
19process to ensure that all wards of the Department of Children
20and Family Services are enrolled in Medicaid managed care and
21care coordination plans.
 
22    (305 ILCS 5/5A-2)  (from Ch. 23, par. 5A-2)
23    (Section scheduled to be repealed on July 1, 2018)
24    Sec. 5A-2. Assessment.

 

 

HB4300- 893 -LRB099 14379 HLH 38474 b

1    (a) Subject to Sections 5A-3 and 5A-10, for State fiscal
2years 2009 through 2018, an annual assessment on inpatient
3services is imposed on each hospital provider in an amount
4equal to $218.38 multiplied by the difference of the hospital's
5occupied bed days less the hospital's Medicare bed days,
6provided, however, that the amount of $218.38 shall be
7increased by a uniform percentage to generate an amount equal
8to 75% of the State share of the payments authorized under
9Section 12-5, with such increase only taking effect upon the
10date that a State share for such payments is required under
11federal law. For the period of April through June 2015, the
12amount of $218.38 used to calculate the assessment under this
13paragraph shall, by emergency rule under subsection (s) of
14Section 5-45 of the Illinois Administrative Procedure Act, be
15increased by a uniform percentage to generate $20,250,000 in
16the aggregate for that period from all hospitals subject to the
17annual assessment under this paragraph. In lieu of a reduction
18in the reimbursement rates paid to hospitals under Section
195-5b.2 of this Code, for State fiscal year 2016, the amount of
20$218.38 used to calculate the assessment under this paragraph
21shall, by emergency rule under subsection (s) of Section 5-45
22of the Illinois Administrative Procedure Act, be increased by a
23uniform percentage to generate $20,250,000 annually in the
24aggregate from all hospitals subject to the annual assessment
25under this paragraph.
26    For State fiscal years 2009 through 2014 and after, a

 

 

HB4300- 894 -LRB099 14379 HLH 38474 b

1hospital's occupied bed days and Medicare bed days shall be
2determined using the most recent data available from each
3hospital's 2005 Medicare cost report as contained in the
4Healthcare Cost Report Information System file, for the quarter
5ending on December 31, 2006, without regard to any subsequent
6adjustments or changes to such data. If a hospital's 2005
7Medicare cost report is not contained in the Healthcare Cost
8Report Information System, then the Illinois Department may
9obtain the hospital provider's occupied bed days and Medicare
10bed days from any source available, including, but not limited
11to, records maintained by the hospital provider, which may be
12inspected at all times during business hours of the day by the
13Illinois Department or its duly authorized agents and
14employees.
15    (b) (Blank).
16    (b-5) Subject to Sections 5A-3 and 5A-10, for the portion
17of State fiscal year 2012, beginning June 10, 2012 through June
1830, 2012, and for State fiscal years 2013 through 2018, an
19annual assessment on outpatient services is imposed on each
20hospital provider in an amount equal to .008766 multiplied by
21the hospital's outpatient gross revenue, provided, however,
22that the amount of .008766 shall be increased by a uniform
23percentage to generate an amount equal to 25% of the State
24share of the payments authorized under Section 12-5, with such
25increase only taking effect upon the date that a State share
26for such payments is required under federal law. For the period

 

 

HB4300- 895 -LRB099 14379 HLH 38474 b

1beginning June 10, 2012 through June 30, 2012, the annual
2assessment on outpatient services shall be prorated by
3multiplying the assessment amount by a fraction, the numerator
4of which is 21 days and the denominator of which is 365 days.
5For the period of April through June 2015, the amount of
6.008766 used to calculate the assessment under this paragraph
7shall, by emergency rule under subsection (s) of Section 5-45
8of the Illinois Administrative Procedure Act, be increased by a
9uniform percentage to generate $6,750,000 in the aggregate for
10that period from all hospitals subject to the annual assessment
11under this paragraph. In lieu of a reduction in the
12reimbursement rates paid to hospitals under Section 5-5b.2 of
13this Code, for State fiscal year 2016, the amount of .008766
14used to calculate the assessment under this paragraph shall, by
15emergency rule under subsection (s) of Section 5-45 of the
16Illinois Administrative Procedure Act, be increased by a
17uniform percentage to generate $6,750,000 annually in the
18aggregate from all hospitals subject to the annual assessment
19under this paragraph.
20    For the portion of State fiscal year 2012, beginning June
2110, 2012 through June 30, 2012, and State fiscal years 2013
22through 2018, a hospital's outpatient gross revenue shall be
23determined using the most recent data available from each
24hospital's 2009 Medicare cost report as contained in the
25Healthcare Cost Report Information System file, for the quarter
26ending on June 30, 2011, without regard to any subsequent

 

 

HB4300- 896 -LRB099 14379 HLH 38474 b

1adjustments or changes to such data. If a hospital's 2009
2Medicare cost report is not contained in the Healthcare Cost
3Report Information System, then the Department may obtain the
4hospital provider's outpatient gross revenue from any source
5available, including, but not limited to, records maintained by
6the hospital provider, which may be inspected at all times
7during business hours of the day by the Department or its duly
8authorized agents and employees.
9    (c) (Blank).
10    (d) Notwithstanding any of the other provisions of this
11Section, the Department is authorized to adopt rules to reduce
12the rate of any annual assessment imposed under this Section,
13as authorized by Section 5-46.2 of the Illinois Administrative
14Procedure Act.
15    (e) Notwithstanding any other provision of this Section,
16any plan providing for an assessment on a hospital provider as
17a permissible tax under Title XIX of the federal Social
18Security Act and Medicaid-eligible payments to hospital
19providers from the revenues derived from that assessment shall
20be reviewed by the Illinois Department of Healthcare and Family
21Services, as the Single State Medicaid Agency required by
22federal law, to determine whether those assessments and
23hospital provider payments meet federal Medicaid standards. If
24the Department determines that the elements of the plan may
25meet federal Medicaid standards and a related State Medicaid
26Plan Amendment is prepared in a manner and form suitable for

 

 

HB4300- 897 -LRB099 14379 HLH 38474 b

1submission, that State Plan Amendment shall be submitted in a
2timely manner for review by the Centers for Medicare and
3Medicaid Services of the United States Department of Health and
4Human Services and subject to approval by the Centers for
5Medicare and Medicaid Services of the United States Department
6of Health and Human Services. No such plan shall become
7effective without approval by the Illinois General Assembly by
8the enactment into law of related legislation. Notwithstanding
9any other provision of this Section, the Department is
10authorized to adopt rules to reduce the rate of any annual
11assessment imposed under this Section. Any such rules may be
12adopted by the Department under Section 5-50 of the Illinois
13Administrative Procedure Act.
14(Source: P.A. 98-104, eff. 7-22-13; 98-651, eff. 6-16-14; 99-2,
15eff. 3-26-15.)
 
16    (305 ILCS 5/5A-12.2)
17    (Section scheduled to be repealed on July 1, 2018)
18    Sec. 5A-12.2. Hospital access payments on or after July 1,
192008.
20    (a) To preserve and improve access to hospital services,
21for hospital services rendered on or after July 1, 2008, the
22Illinois Department shall, except for hospitals described in
23subsection (b) of Section 5A-3, make payments to hospitals as
24set forth in this Section. These payments shall be paid in 12
25equal installments on or before the seventh State business day

 

 

HB4300- 898 -LRB099 14379 HLH 38474 b

1of each month, except that no payment shall be due within 100
2days after the later of the date of notification of federal
3approval of the payment methodologies required under this
4Section or any waiver required under 42 CFR 433.68, at which
5time the sum of amounts required under this Section prior to
6the date of notification is due and payable. Payments under
7this Section are not due and payable, however, until (i) the
8methodologies described in this Section are approved by the
9federal government in an appropriate State Plan amendment and
10(ii) the assessment imposed under this Article is determined to
11be a permissible tax under Title XIX of the Social Security
12Act.
13    (a-5) The Illinois Department may, when practicable,
14accelerate the schedule upon which payments authorized under
15this Section are made.
16    (b) Across-the-board inpatient adjustment.
17        (1) In addition to rates paid for inpatient hospital
18    services, the Department shall pay to each Illinois general
19    acute care hospital an amount equal to 40% of the total
20    base inpatient payments paid to the hospital for services
21    provided in State fiscal year 2005.
22        (2) In addition to rates paid for inpatient hospital
23    services, the Department shall pay to each freestanding
24    Illinois specialty care hospital as defined in 89 Ill. Adm.
25    Code 149.50(c)(1), (2), or (4) an amount equal to 60% of
26    the total base inpatient payments paid to the hospital for

 

 

HB4300- 899 -LRB099 14379 HLH 38474 b

1    services provided in State fiscal year 2005.
2        (3) In addition to rates paid for inpatient hospital
3    services, the Department shall pay to each freestanding
4    Illinois rehabilitation or psychiatric hospital an amount
5    equal to $1,000 per Medicaid inpatient day multiplied by
6    the increase in the hospital's Medicaid inpatient
7    utilization ratio (determined using the positive
8    percentage change from the rate year 2005 Medicaid
9    inpatient utilization ratio to the rate year 2007 Medicaid
10    inpatient utilization ratio, as calculated by the
11    Department for the disproportionate share determination).
12        (4) In addition to rates paid for inpatient hospital
13    services, the Department shall pay to each Illinois
14    children's hospital an amount equal to 20% of the total
15    base inpatient payments paid to the hospital for services
16    provided in State fiscal year 2005 and an additional amount
17    equal to 20% of the base inpatient payments paid to the
18    hospital for psychiatric services provided in State fiscal
19    year 2005.
20        (5) In addition to rates paid for inpatient hospital
21    services, the Department shall pay to each Illinois
22    hospital eligible for a pediatric inpatient adjustment
23    payment under 89 Ill. Adm. Code 148.298, as in effect for
24    State fiscal year 2007, a supplemental pediatric inpatient
25    adjustment payment equal to:
26            (i) For freestanding children's hospitals as

 

 

HB4300- 900 -LRB099 14379 HLH 38474 b

1        defined in 89 Ill. Adm. Code 149.50(c)(3)(A), 2.5
2        multiplied by the hospital's pediatric inpatient
3        adjustment payment required under 89 Ill. Adm. Code
4        148.298, as in effect for State fiscal year 2008.
5            (ii) For hospitals other than freestanding
6        children's hospitals as defined in 89 Ill. Adm. Code
7        149.50(c)(3)(B), 1.0 multiplied by the hospital's
8        pediatric inpatient adjustment payment required under
9        89 Ill. Adm. Code 148.298, as in effect for State
10        fiscal year 2008.
11    (c) Outpatient adjustment.
12        (1) In addition to the rates paid for outpatient
13    hospital services, the Department shall pay each Illinois
14    hospital an amount equal to 2.2 multiplied by the
15    hospital's ambulatory procedure listing payments for
16    categories 1, 2, 3, and 4, as defined in 89 Ill. Adm. Code
17    148.140(b), for State fiscal year 2005.
18        (2) In addition to the rates paid for outpatient
19    hospital services, the Department shall pay each Illinois
20    freestanding psychiatric hospital an amount equal to 3.25
21    multiplied by the hospital's ambulatory procedure listing
22    payments for category 5b, as defined in 89 Ill. Adm. Code
23    148.140(b)(1)(E), for State fiscal year 2005.
24    (d) Medicaid high volume adjustment. In addition to rates
25paid for inpatient hospital services, the Department shall pay
26to each Illinois general acute care hospital that provided more

 

 

HB4300- 901 -LRB099 14379 HLH 38474 b

1than 20,500 Medicaid inpatient days of care in State fiscal
2year 2005 amounts as follows:
3        (1) For hospitals with a case mix index equal to or
4    greater than the 85th percentile of hospital case mix
5    indices, $350 for each Medicaid inpatient day of care
6    provided during that period; and
7        (2) For hospitals with a case mix index less than the
8    85th percentile of hospital case mix indices, $100 for each
9    Medicaid inpatient day of care provided during that period.
10    (e) Capital adjustment. In addition to rates paid for
11inpatient hospital services, the Department shall pay an
12additional payment to each Illinois general acute care hospital
13that has a Medicaid inpatient utilization rate of at least 10%
14(as calculated by the Department for the rate year 2007
15disproportionate share determination) amounts as follows:
16        (1) For each Illinois general acute care hospital that
17    has a Medicaid inpatient utilization rate of at least 10%
18    and less than 36.94% and whose capital cost is less than
19    the 60th percentile of the capital costs of all Illinois
20    hospitals, the amount of such payment shall equal the
21    hospital's Medicaid inpatient days multiplied by the
22    difference between the capital costs at the 60th percentile
23    of the capital costs of all Illinois hospitals and the
24    hospital's capital costs.
25        (2) For each Illinois general acute care hospital that
26    has a Medicaid inpatient utilization rate of at least

 

 

HB4300- 902 -LRB099 14379 HLH 38474 b

1    36.94% and whose capital cost is less than the 75th
2    percentile of the capital costs of all Illinois hospitals,
3    the amount of such payment shall equal the hospital's
4    Medicaid inpatient days multiplied by the difference
5    between the capital costs at the 75th percentile of the
6    capital costs of all Illinois hospitals and the hospital's
7    capital costs.
8    (f) Obstetrical care adjustment.
9        (1) In addition to rates paid for inpatient hospital
10    services, the Department shall pay $1,500 for each Medicaid
11    obstetrical day of care provided in State fiscal year 2005
12    by each Illinois rural hospital that had a Medicaid
13    obstetrical percentage (Medicaid obstetrical days divided
14    by Medicaid inpatient days) greater than 15% for State
15    fiscal year 2005.
16        (2) In addition to rates paid for inpatient hospital
17    services, the Department shall pay $1,350 for each Medicaid
18    obstetrical day of care provided in State fiscal year 2005
19    by each Illinois general acute care hospital that was
20    designated a level III perinatal center as of December 31,
21    2006, and that had a case mix index equal to or greater
22    than the 45th percentile of the case mix indices for all
23    level III perinatal centers.
24        (3) In addition to rates paid for inpatient hospital
25    services, the Department shall pay $900 for each Medicaid
26    obstetrical day of care provided in State fiscal year 2005

 

 

HB4300- 903 -LRB099 14379 HLH 38474 b

1    by each Illinois general acute care hospital that was
2    designated a level II or II+ perinatal center as of
3    December 31, 2006, and that had a case mix index equal to
4    or greater than the 35th percentile of the case mix indices
5    for all level II and II+ perinatal centers.
6    (g) Trauma adjustment.
7        (1) In addition to rates paid for inpatient hospital
8    services, the Department shall pay each Illinois general
9    acute care hospital designated as a trauma center as of
10    July 1, 2007, a payment equal to 3.75 multiplied by the
11    hospital's State fiscal year 2005 Medicaid capital
12    payments.
13        (2) In addition to rates paid for inpatient hospital
14    services, the Department shall pay $400 for each Medicaid
15    acute inpatient day of care provided in State fiscal year
16    2005 by each Illinois general acute care hospital that was
17    designated a level II trauma center, as defined in 89 Ill.
18    Adm. Code 148.295(a)(3) and 148.295(a)(4), as of July 1,
19    2007.
20        (3) In addition to rates paid for inpatient hospital
21    services, the Department shall pay $235 for each Illinois
22    Medicaid acute inpatient day of care provided in State
23    fiscal year 2005 by each level I pediatric trauma center
24    located outside of Illinois that had more than 8,000
25    Illinois Medicaid inpatient days in State fiscal year 2005.
26    (h) Supplemental tertiary care adjustment. In addition to

 

 

HB4300- 904 -LRB099 14379 HLH 38474 b

1rates paid for inpatient services, the Department shall pay to
2each Illinois hospital eligible for tertiary care adjustment
3payments under 89 Ill. Adm. Code 148.296, as in effect for
4State fiscal year 2007, a supplemental tertiary care adjustment
5payment equal to the tertiary care adjustment payment required
6under 89 Ill. Adm. Code 148.296, as in effect for State fiscal
7year 2007.
8    (i) Crossover adjustment. In addition to rates paid for
9inpatient services, the Department shall pay each Illinois
10general acute care hospital that had a ratio of crossover days
11to total inpatient days for medical assistance programs
12administered by the Department (utilizing information from
132005 paid claims) greater than 50%, and a case mix index
14greater than the 65th percentile of case mix indices for all
15Illinois hospitals, a rate of $1,125 for each Medicaid
16inpatient day including crossover days.
17    (j) Magnet hospital adjustment. In addition to rates paid
18for inpatient hospital services, the Department shall pay to
19each Illinois general acute care hospital and each Illinois
20freestanding children's hospital that, as of February 1, 2008,
21was recognized as a Magnet hospital by the American Nurses
22Credentialing Center and that had a case mix index greater than
23the 75th percentile of case mix indices for all Illinois
24hospitals amounts as follows:
25        (1) For hospitals located in a county whose eligibility
26    growth factor is greater than the mean, $450 multiplied by

 

 

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1    the eligibility growth factor for the county in which the
2    hospital is located for each Medicaid inpatient day of care
3    provided by the hospital during State fiscal year 2005.
4        (2) For hospitals located in a county whose eligibility
5    growth factor is less than or equal to the mean, $225
6    multiplied by the eligibility growth factor for the county
7    in which the hospital is located for each Medicaid
8    inpatient day of care provided by the hospital during State
9    fiscal year 2005.
10    For purposes of this subsection, "eligibility growth
11factor" means the percentage by which the number of Medicaid
12recipients in the county increased from State fiscal year 1998
13to State fiscal year 2005.
14    (k) For purposes of this Section, a hospital that is
15enrolled to provide Medicaid services during State fiscal year
162005 shall have its utilization and associated reimbursements
17annualized prior to the payment calculations being performed
18under this Section.
19    (l) For purposes of this Section, the terms "Medicaid
20days", "ambulatory procedure listing services", and
21"ambulatory procedure listing payments" do not include any
22days, charges, or services for which Medicare or a managed care
23organization reimbursed on a capitated basis was liable for
24payment, except where explicitly stated otherwise in this
25Section.
26    (m) For purposes of this Section, in determining the

 

 

HB4300- 906 -LRB099 14379 HLH 38474 b

1percentile ranking of an Illinois hospital's case mix index or
2capital costs, hospitals described in subsection (b) of Section
35A-3 shall be excluded from the ranking.
4    (n) Definitions. Unless the context requires otherwise or
5unless provided otherwise in this Section, the terms used in
6this Section for qualifying criteria and payment calculations
7shall have the same meanings as those terms have been given in
8the Illinois Department's administrative rules as in effect on
9March 1, 2008. Other terms shall be defined by the Illinois
10Department by rule.
11    As used in this Section, unless the context requires
12otherwise:
13    "Base inpatient payments" means, for a given hospital, the
14sum of base payments for inpatient services made on a per diem
15or per admission (DRG) basis, excluding those portions of per
16admission payments that are classified as capital payments.
17Disproportionate share hospital adjustment payments, Medicaid
18Percentage Adjustments, Medicaid High Volume Adjustments, and
19outlier payments, as defined by rule by the Department as of
20January 1, 2008, are not base payments.
21    "Capital costs" means, for a given hospital, the total
22capital costs determined using the most recent 2005 Medicare
23cost report as contained in the Healthcare Cost Report
24Information System file, for the quarter ending on December 31,
252006, divided by the total inpatient days from the same cost
26report to calculate a capital cost per day. The resulting

 

 

HB4300- 907 -LRB099 14379 HLH 38474 b

1capital cost per day is inflated to the midpoint of State
2fiscal year 2009 utilizing the national hospital market price
3proxies (DRI) hospital cost index. If a hospital's 2005
4Medicare cost report is not contained in the Healthcare Cost
5Report Information System, the Department may obtain the data
6necessary to compute the hospital's capital costs from any
7source available, including, but not limited to, records
8maintained by the hospital provider, which may be inspected at
9all times during business hours of the day by the Illinois
10Department or its duly authorized agents and employees.
11    "Case mix index" means, for a given hospital, the sum of
12the DRG relative weighting factors in effect on January 1,
132005, for all general acute care admissions for State fiscal
14year 2005, excluding Medicare crossover admissions and
15transplant admissions reimbursed under 89 Ill. Adm. Code
16148.82, divided by the total number of general acute care
17admissions for State fiscal year 2005, excluding Medicare
18crossover admissions and transplant admissions reimbursed
19under 89 Ill. Adm. Code 148.82.
20    "Medicaid inpatient day" means, for a given hospital, the
21sum of days of inpatient hospital days provided to recipients
22of medical assistance under Title XIX of the federal Social
23Security Act, excluding days for individuals eligible for
24Medicare under Title XVIII of that Act (Medicaid/Medicare
25crossover days), as tabulated from the Department's paid claims
26data for admissions occurring during State fiscal year 2005

 

 

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1that was adjudicated by the Department through March 23, 2007.
2    "Medicaid obstetrical day" means, for a given hospital, the
3sum of days of inpatient hospital days grouped by the
4Department to DRGs of 370 through 375 provided to recipients of
5medical assistance under Title XIX of the federal Social
6Security Act, excluding days for individuals eligible for
7Medicare under Title XVIII of that Act (Medicaid/Medicare
8crossover days), as tabulated from the Department's paid claims
9data for admissions occurring during State fiscal year 2005
10that was adjudicated by the Department through March 23, 2007.
11    "Outpatient ambulatory procedure listing payments" means,
12for a given hospital, the sum of payments for ambulatory
13procedure listing services, as described in 89 Ill. Adm. Code
14148.140(b), provided to recipients of medical assistance under
15Title XIX of the federal Social Security Act, excluding
16payments for individuals eligible for Medicare under Title
17XVIII of the Act (Medicaid/Medicare crossover days), as
18tabulated from the Department's paid claims data for services
19occurring in State fiscal year 2005 that were adjudicated by
20the Department through March 23, 2007.
21    (o) The Department may adjust payments made under this
22Section 5A-12.2 to comply with federal law or regulations
23regarding hospital-specific payment limitations on
24government-owned or government-operated hospitals.
25    (p) Notwithstanding any of the other provisions of this
26Section, the Department is authorized to adopt rules that

 

 

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1change the hospital access improvement payments specified in
2this Section, but only to the extent necessary to conform to
3any federally approved amendment to the Title XIX State plan.
4Any such rules shall be adopted by the Department as authorized
5by Section 5-50 of the Illinois Administrative Procedure Act.
6Notwithstanding any other provision of law, any changes
7implemented as a result of this subsection (p) shall be given
8retroactive effect so that they shall be deemed to have taken
9effect as of the effective date of this Section.
10    (q) (Blank).
11    (r) On and after July 1, 2012, the Department shall reduce
12any rate of reimbursement for services or other payments or
13alter any methodologies authorized by this Code to reduce any
14rate of reimbursement for services or other payments in
15accordance with Section 5-5e.
16    (s) On or after July 1, 2014, but no later than October 1,
172014, and no less than annually thereafter, the Department may
18increase capitation payments to capitated managed care
19organizations (MCOs) to equal the aggregate reduction of
20payments made in this Section and in Section 5A-12.4 by a
21uniform percentage on a regional basis to preserve access to
22hospital services for recipients under the Illinois Medical
23Assistance Program. The aggregate amount of all increased
24capitation payments to all MCOs for a fiscal year shall be the
25amount needed to avoid reduction in payments authorized under
26Section 5A-15. Payments to MCOs under this Section shall be

 

 

HB4300- 910 -LRB099 14379 HLH 38474 b

1consistent with actuarial certification and shall be published
2by the Department each year. Each MCO shall only expend the
3increased capitation payments it receives under this Section to
4support the availability of hospital services and to ensure
5access to hospital services, with such expenditures being made
6within 15 calendar days from when the MCO receives the
7increased capitation payment. The Department shall make
8available, on a monthly basis, a report of the capitation
9payments that are made to each MCO pursuant to this subsection,
10including the number of enrollees for which such payment is
11made, the per enrollee amount of the payment, and any
12adjustments that have been made. Payments made under this
13subsection shall be guaranteed by a surety bond obtained by the
14MCO in an amount established by the Department to approximate
15one month's liability of payments authorized under this
16subsection. The Department may advance the payments guaranteed
17by the surety bond. Payments to MCOs that would be paid
18consistent with actuarial certification and enrollment in the
19absence of the increased capitation payments under this Section
20shall not be reduced as a consequence of payments made under
21this subsection.
22    As used in this subsection, "MCO" means an entity which
23contracts with the Department to provide services where payment
24for medical services is made on a capitated basis.
25    (t) On or after July 1, 2014, the Department shall may
26increase capitation payments to capitated managed care

 

 

HB4300- 911 -LRB099 14379 HLH 38474 b

1organizations (MCOs) to include the payments authorized equal
2the aggregate reduction of payments made in Section 5A-12.5 to
3preserve access to hospital services for recipients under the
4Illinois Medical Assistance Program. Payments to MCOs under
5this Section shall be consistent with actuarial certification
6and shall be published by the Department each year. Each MCO
7shall only expend the increased capitation payments it receives
8under this Section to support the availability of hospital
9services and to ensure access to hospital services, with such
10expenditures being made within 15 calendar days from when the
11MCO receives the increased capitation payment. The Department
12may advance the payments to hospitals under this subsection, in
13the event the MCO fails to make such payments. The Department
14shall make available, on a monthly basis, a report of the
15capitation payments that are made to each MCO pursuant to this
16subsection, including the number of enrollees for which such
17payment is made, the per enrollee amount of the payment, and
18any adjustments that have been made. Payments to MCOs that
19would be paid consistent with actuarial certification and
20enrollment in the absence of the increased capitation payments
21under this subsection shall not be reduced as a consequence of
22payments made under this subsection.
23    As used in this subsection, "MCO" means an entity which
24contracts with the Department to provide services where payment
25for medical services is made on a capitated basis.
26(Source: P.A. 97-689, eff. 6-14-12; 98-651, eff. 6-16-14.)
 

 

 

HB4300- 912 -LRB099 14379 HLH 38474 b

1    (305 ILCS 5/5A-12.5)
2    Sec. 5A-12.5. Affordable Care Act adults; hospital access
3payments. The Department shall, subject to federal approval,
4mirror the Medical Assistance hospital reimbursement
5methodology, for recipients enrolled under a fee for service or
6capitated managed care program, including hospital access
7payments as defined in Section 5A-12.2 of this Article and
8hospital access improvement payments as defined in Section
95A-12.4 of this Article, as well as the amount of such payments
10pursuant to subsection (s) of Section 5A-12.2 of this Article,
11in compliance with the equivalent rate provisions of the
12Affordable Care Act. The Department shall make adjustments to
13the capitation payments made to MCOs for adults eligible for
14medical assistance pursuant to the Affordable Care Act for the
15hospital access payments authorized under this Section
16attributable to the earliest possible date for which federal
17financial participation is available.
18    As used in this Section, "Affordable Care Act" is the
19collective term for the Patient Protection and Affordable Care
20Act (Pub. L. 111-148) and the Health Care and Education
21Reconciliation Act of 2010 (Pub. L. 111-152).
22(Source: P.A. 98-651, eff. 6-16-14.)
 
23    (305 ILCS 5/12-13.1)
24    Sec. 12-13.1. Inspector General.

 

 

HB4300- 913 -LRB099 14379 HLH 38474 b

1    (a) The Governor shall appoint, and the Senate shall
2confirm, an Inspector General who shall function within the
3Illinois Department of Public Aid (now Healthcare and Family
4Services) and report to the Governor. The term of the Inspector
5General shall expire on the third Monday of January, 1997 and
6every 4 years thereafter.
7    (b) In order to prevent, detect, and eliminate fraud,
8waste, abuse, mismanagement, and misconduct, the Inspector
9General shall oversee the Department of Healthcare and Family
10Services' and the Department on Aging's integrity functions,
11which include, but are not limited to, the following:
12        (1) Investigation of misconduct by employees, vendors,
13    contractors and medical providers, except for allegations
14    of violations of the State Officials and Employees Ethics
15    Act which shall be referred to the Office of the Governor's
16    Executive Inspector General for investigation.
17        (2) Prepayment and post-payment audits of medical
18    providers related to ensuring that appropriate payments
19    are made for services rendered and to the prevention and
20    recovery of overpayments.
21        (3) Monitoring of quality assurance programs
22    administered by the Department of Healthcare and Family
23    Services and the Community Care Program administered by the
24    Department on Aging.
25        (4) Quality control measurements of the programs
26    administered by the Department of Healthcare and Family

 

 

HB4300- 914 -LRB099 14379 HLH 38474 b

1    Services and the Community Care Program administered by the
2    Department on Aging.
3        (5) Investigations of fraud or intentional program
4    violations committed by clients of the Department of
5    Healthcare and Family Services and the Community Care
6    Program administered by the Department on Aging.
7        (6) Actions initiated against contractors, vendors, or
8    medical providers for any of the following reasons:
9            (A) Violations of the medical assistance program
10        and the Community Care Program administered by the
11        Department on Aging.
12            (B) Sanctions against providers brought in
13        conjunction with the Department of Public Health or the
14        Department of Human Services (as successor to the
15        Department of Mental Health and Developmental
16        Disabilities).
17            (C) Recoveries of assessments against hospitals
18        and long-term care facilities.
19            (D) Sanctions mandated by the United States
20        Department of Health and Human Services against
21        medical providers.
22            (E) Violations of contracts related to any
23        programs administered by the Department of Healthcare
24        and Family Services and the Community Care Program
25        administered by the Department on Aging.
26        (7) Representation of the Department of Healthcare and

 

 

HB4300- 915 -LRB099 14379 HLH 38474 b

1    Family Services at hearings with the Illinois Department of
2    Financial and Professional Regulation in actions taken
3    against professional licenses held by persons who are in
4    violation of orders for child support payments.
5    (b-5) At the request of the Secretary of Human Services,
6the Inspector General shall, in relation to any function
7performed by the Department of Human Services as successor to
8the Department of Public Aid, exercise one or more of the
9powers provided under this Section as if those powers related
10to the Department of Human Services; in such matters, the
11Inspector General shall report his or her findings to the
12Secretary of Human Services.
13    (c) Notwithstanding, and in addition to, any other
14provision of law, the Inspector General shall have access to
15all information, personnel and facilities of the Department of
16Healthcare and Family Services and the Department of Human
17Services (as successor to the Department of Public Aid), their
18employees, vendors, contractors and medical providers and any
19federal, State or local governmental agency that are necessary
20to perform the duties of the Office as directly related to
21public assistance programs administered by those departments.
22No medical provider shall be compelled, however, to provide
23individual medical records of patients who are not clients of
24the programs administered by the Department of Healthcare and
25Family Services. State and local governmental agencies are
26authorized and directed to provide the requested information,

 

 

HB4300- 916 -LRB099 14379 HLH 38474 b

1assistance or cooperation.
2    For purposes of enhanced program integrity functions and
3oversight, and to the extent consistent with applicable
4information and privacy, security, and disclosure laws, State
5agencies and departments shall provide the Office of Inspector
6General access to confidential and other information and data,
7and the Inspector General is authorized to enter into
8agreements with appropriate federal agencies and departments
9to secure similar data. This includes, but is not limited to,
10information pertaining to: licensure; certification; earnings;
11immigration status; citizenship; wage reporting; unearned and
12earned income; pension income; employment; supplemental
13security income; social security numbers; National Provider
14Identifier (NPI) numbers; the National Practitioner Data Bank
15(NPDB); program and agency exclusions; taxpayer identification
16numbers; tax delinquency; corporate information; and death
17records.
18    The Inspector General shall enter into agreements with
19State agencies and departments, and is authorized to enter into
20agreements with federal agencies and departments, under which
21such agencies and departments shall share data necessary for
22medical assistance program integrity functions and oversight.
23The Inspector General shall enter into agreements with State
24agencies and departments, and is authorized to enter into
25agreements with federal agencies and departments, under which
26such agencies shall share data necessary for recipient and

 

 

HB4300- 917 -LRB099 14379 HLH 38474 b

1vendor screening, review, and investigation, including but not
2limited to vendor payment and recipient eligibility
3verification. The Inspector General shall develop, in
4cooperation with other State and federal agencies and
5departments, and in compliance with applicable federal laws and
6regulations, appropriate and effective methods to share such
7data. The Inspector General shall enter into agreements with
8State agencies and departments, and is authorized to enter into
9agreements with federal agencies and departments, including,
10but not limited to: the Secretary of State; the Department of
11Revenue; the Department of Public Health; the Department of
12Human Services; and the Department of Financial and
13Professional Regulation.
14    The Inspector General shall have the authority to deny
15payment, prevent overpayments, and recover overpayments.
16    The Inspector General shall have the authority to deny or
17suspend payment to, and deny, terminate, or suspend the
18eligibility of, any vendor who fails to grant the Inspector
19General timely access to full and complete records, including
20records of recipients under the medical assistance program for
21the most recent 6 years, in accordance with Section 140.28 of
22Title 89 of the Illinois Administrative Code, and other
23information for the purpose of audits, investigations, or other
24program integrity functions, after reasonable written request
25by the Inspector General.
26    (d) The Inspector General shall serve as the Department of

 

 

HB4300- 918 -LRB099 14379 HLH 38474 b

1Healthcare and Family Services' primary liaison with law
2enforcement, investigatory and prosecutorial agencies,
3including but not limited to the following:
4        (1) The Department of State Police.
5        (2) The Federal Bureau of Investigation and other
6    federal law enforcement agencies.
7        (3) The various Inspectors General of federal agencies
8    overseeing the programs administered by the Department of
9    Healthcare and Family Services.
10        (4) The various Inspectors General of any other State
11    agencies with responsibilities for portions of programs
12    primarily administered by the Department of Healthcare and
13    Family Services.
14        (5) The Offices of the several United States Attorneys
15    in Illinois.
16        (6) The several State's Attorneys.
17        (7) The offices of the Centers for Medicare and
18    Medicaid Services that administer the Medicare and
19    Medicaid integrity programs.
20    The Inspector General shall meet on a regular basis with
21these entities to share information regarding possible
22misconduct by any persons or entities involved with the public
23aid programs administered by the Department of Healthcare and
24Family Services.
25    (e) All investigations conducted by the Inspector General
26shall be conducted in a manner that ensures the preservation of

 

 

HB4300- 919 -LRB099 14379 HLH 38474 b

1evidence for use in criminal prosecutions. If the Inspector
2General determines that a possible criminal act relating to
3fraud in the provision or administration of the medical
4assistance program has been committed, the Inspector General
5shall immediately notify the Medicaid Fraud Control Unit. If
6the Inspector General determines that a possible criminal act
7has been committed within the jurisdiction of the Office, the
8Inspector General may request the special expertise of the
9Department of State Police. The Inspector General may present
10for prosecution the findings of any criminal investigation to
11the Office of the Attorney General, the Offices of the several
12United States Attorneys in Illinois or the several State's
13Attorneys.
14    (f) To carry out his or her duties as described in this
15Section, the Inspector General and his or her designees shall
16have the power to compel by subpoena the attendance and
17testimony of witnesses and the production of books, electronic
18records and papers as directly related to public assistance
19programs administered by the Department of Healthcare and
20Family Services or the Department of Human Services (as
21successor to the Department of Public Aid). No medical provider
22shall be compelled, however, to provide individual medical
23records of patients who are not clients of the Medical
24Assistance Program.
25    (g) The Inspector General shall report all convictions,
26terminations, and suspensions taken against vendors,

 

 

HB4300- 920 -LRB099 14379 HLH 38474 b

1contractors and medical providers to the Department of
2Healthcare and Family Services and to any agency responsible
3for licensing or regulating those persons or entities.
4    (h) The Inspector General shall make annual reports,
5findings, and recommendations regarding the Office's
6investigations into reports of fraud, waste, abuse,
7mismanagement, or misconduct relating to any programs
8administered by the Department of Healthcare and Family
9Services or the Department of Human Services (as successor to
10the Department of Public Aid) to the General Assembly and the
11Governor. These reports shall include, but not be limited to,
12the following information:
13        (1) Aggregate provider billing and payment
14    information, including the number of providers at various
15    Medicaid earning levels.
16        (2) The number of audits of the medical assistance
17    program and the dollar savings resulting from those audits.
18        (3) The number of prescriptions rejected annually
19    under the Department of Healthcare and Family Services'
20    Refill Too Soon program and the dollar savings resulting
21    from that program.
22        (4) Provider sanctions, in the aggregate, including
23    terminations and suspensions.
24        (5) A detailed summary of the investigations
25    undertaken in the previous fiscal year. These summaries
26    shall comply with all laws and rules regarding maintaining

 

 

HB4300- 921 -LRB099 14379 HLH 38474 b

1    confidentiality in the public aid programs.
2    (i) Nothing in this Section shall limit investigations by
3the Department of Healthcare and Family Services or the
4Department of Human Services that may otherwise be required by
5law or that may be necessary in their capacity as the central
6administrative authorities responsible for administration of
7their agency's programs in this State.
8    (j) The Inspector General may issue shields or other
9distinctive identification to his or her employees not
10exercising the powers of a peace officer if the Inspector
11General determines that a shield or distinctive identification
12is needed by an employee to carry out his or her
13responsibilities.
14    (k) The Office of Inspector General must realign its
15resources toward activities with the greatest potential to
16reduce or avoid unnecessary, wasteful, or fraudulent
17expenditures.
18(Source: P.A. 97-689, eff. 6-14-12; 98-8, eff. 5-3-13.)
 
19
ARTICLE 105. DEPARTMENT OF CORRECTIONS

 
20    Section 105-5. The Unified Code of Corrections is amended
21by changing Section 3-2-2 as follows:
 
22    (730 ILCS 5/3-2-2)  (from Ch. 38, par. 1003-2-2)
23    Sec. 3-2-2. Powers and Duties of the Department.

 

 

HB4300- 922 -LRB099 14379 HLH 38474 b

1    (1) In addition to the powers, duties and responsibilities
2which are otherwise provided by law, the Department shall have
3the following powers:
4        (a) To accept persons committed to it by the courts of
5    this State for care, custody, treatment and
6    rehabilitation, and to accept federal prisoners and aliens
7    over whom the Office of the Federal Detention Trustee is
8    authorized to exercise the federal detention function for
9    limited purposes and periods of time.
10        (b) To develop and maintain reception and evaluation
11    units for purposes of analyzing the custody and
12    rehabilitation needs of persons committed to it and to
13    assign such persons to institutions and programs under its
14    control or transfer them to other appropriate agencies. In
15    consultation with the Department of Alcoholism and
16    Substance Abuse (now the Department of Human Services), the
17    Department of Corrections shall develop a master plan for
18    the screening and evaluation of persons committed to its
19    custody who have alcohol or drug abuse problems, and for
20    making appropriate treatment available to such persons;
21    the Department shall report to the General Assembly on such
22    plan not later than April 1, 1987. The maintenance and
23    implementation of such plan shall be contingent upon the
24    availability of funds.
25        (b-1) To create and implement, on January 1, 2002, a
26    pilot program to establish the effectiveness of

 

 

HB4300- 923 -LRB099 14379 HLH 38474 b

1    pupillometer technology (the measurement of the pupil's
2    reaction to light) as an alternative to a urine test for
3    purposes of screening and evaluating persons committed to
4    its custody who have alcohol or drug problems. The pilot
5    program shall require the pupillometer technology to be
6    used in at least one Department of Corrections facility.
7    The Director may expand the pilot program to include an
8    additional facility or facilities as he or she deems
9    appropriate. A minimum of 4,000 tests shall be included in
10    the pilot program. The Department must report to the
11    General Assembly on the effectiveness of the program by
12    January 1, 2003.
13        (b-5) To develop, in consultation with the Department
14    of State Police, a program for tracking and evaluating each
15    inmate from commitment through release for recording his or
16    her gang affiliations, activities, or ranks.
17        (c) To maintain and administer all State correctional
18    institutions and facilities under its control and to
19    establish new ones as needed. Pursuant to its power to
20    establish new institutions and facilities, the Department
21    may, with the written approval of the Governor, authorize
22    the Department of Central Management Services to enter into
23    an agreement of the type described in subsection (d) of
24    Section 405-300 of the Department of Central Management
25    Services Law (20 ILCS 405/405-300). The Department shall
26    designate those institutions which shall constitute the

 

 

HB4300- 924 -LRB099 14379 HLH 38474 b

1    State Penitentiary System.
2        Pursuant to its power to establish new institutions and
3    facilities, the Department may authorize the Department of
4    Central Management Services to accept bids from counties
5    and municipalities for the construction, remodeling or
6    conversion of a structure to be leased to the Department of
7    Corrections for the purposes of its serving as a
8    correctional institution or facility. Such construction,
9    remodeling or conversion may be financed with revenue bonds
10    issued pursuant to the Industrial Building Revenue Bond Act
11    by the municipality or county. The lease specified in a bid
12    shall be for a term of not less than the time needed to
13    retire any revenue bonds used to finance the project, but
14    not to exceed 40 years. The lease may grant to the State
15    the option to purchase the structure outright.
16        Upon receipt of the bids, the Department may certify
17    one or more of the bids and shall submit any such bids to
18    the General Assembly for approval. Upon approval of a bid
19    by a constitutional majority of both houses of the General
20    Assembly, pursuant to joint resolution, the Department of
21    Central Management Services may enter into an agreement
22    with the county or municipality pursuant to such bid.
23        (c-5) To build and maintain regional juvenile
24    detention centers and to charge a per diem to the counties
25    as established by the Department to defray the costs of
26    housing each minor in a center. In this subsection (c-5),

 

 

HB4300- 925 -LRB099 14379 HLH 38474 b

1    "juvenile detention center" means a facility to house
2    minors during pendency of trial who have been transferred
3    from proceedings under the Juvenile Court Act of 1987 to
4    prosecutions under the criminal laws of this State in
5    accordance with Section 5-805 of the Juvenile Court Act of
6    1987, whether the transfer was by operation of law or
7    permissive under that Section. The Department shall
8    designate the counties to be served by each regional
9    juvenile detention center.
10        (d) To develop and maintain programs of control,
11    rehabilitation and employment of committed persons within
12    its institutions.
13        (d-5) To provide a pre-release job preparation program
14    for inmates at Illinois adult correctional centers.
15        (e) To establish a system of supervision and guidance
16    of committed persons in the community.
17        (f) To establish in cooperation with the Department of
18    Transportation to supply a sufficient number of prisoners
19    for use by the Department of Transportation to clean up the
20    trash and garbage along State, county, township, or
21    municipal highways as designated by the Department of
22    Transportation. The Department of Corrections, at the
23    request of the Department of Transportation, shall furnish
24    such prisoners at least annually for a period to be agreed
25    upon between the Director of Corrections and the Director
26    of Transportation. The prisoners used on this program shall

 

 

HB4300- 926 -LRB099 14379 HLH 38474 b

1    be selected by the Director of Corrections on whatever
2    basis he deems proper in consideration of their term,
3    behavior and earned eligibility to participate in such
4    program - where they will be outside of the prison facility
5    but still in the custody of the Department of Corrections.
6    Prisoners convicted of first degree murder, or a Class X
7    felony, or armed violence, or aggravated kidnapping, or
8    criminal sexual assault, aggravated criminal sexual abuse
9    or a subsequent conviction for criminal sexual abuse, or
10    forcible detention, or arson, or a prisoner adjudged a
11    Habitual Criminal shall not be eligible for selection to
12    participate in such program. The prisoners shall remain as
13    prisoners in the custody of the Department of Corrections
14    and such Department shall furnish whatever security is
15    necessary. The Department of Transportation shall furnish
16    trucks and equipment for the highway cleanup program and
17    personnel to supervise and direct the program. Neither the
18    Department of Corrections nor the Department of
19    Transportation shall replace any regular employee with a
20    prisoner.
21        (g) To maintain records of persons committed to it and
22    to establish programs of research, statistics and
23    planning.
24        (h) To investigate the grievances of any person
25    committed to the Department, to inquire into any alleged
26    misconduct by employees or committed persons, and to

 

 

HB4300- 927 -LRB099 14379 HLH 38474 b

1    investigate the assets of committed persons to implement
2    Section 3-7-6 of this Code; and for these purposes it may
3    issue subpoenas and compel the attendance of witnesses and
4    the production of writings and papers, and may examine
5    under oath any witnesses who may appear before it; to also
6    investigate alleged violations of a parolee's or
7    releasee's conditions of parole or release; and for this
8    purpose it may issue subpoenas and compel the attendance of
9    witnesses and the production of documents only if there is
10    reason to believe that such procedures would provide
11    evidence that such violations have occurred.
12        If any person fails to obey a subpoena issued under
13    this subsection, the Director may apply to any circuit
14    court to secure compliance with the subpoena. The failure
15    to comply with the order of the court issued in response
16    thereto shall be punishable as contempt of court.
17        (i) To appoint and remove the chief administrative
18    officers, and administer programs of training and
19    development of personnel of the Department. Personnel
20    assigned by the Department to be responsible for the
21    custody and control of committed persons or to investigate
22    the alleged misconduct of committed persons or employees or
23    alleged violations of a parolee's or releasee's conditions
24    of parole shall be conservators of the peace for those
25    purposes, and shall have the full power of peace officers
26    outside of the facilities of the Department in the

 

 

HB4300- 928 -LRB099 14379 HLH 38474 b

1    protection, arrest, retaking and reconfining of committed
2    persons or where the exercise of such power is necessary to
3    the investigation of such misconduct or violations. This
4    subsection shall not apply to persons committed to the
5    Department of Juvenile Justice under the Juvenile Court Act
6    of 1987 on aftercare release.
7        (j) To cooperate with other departments and agencies
8    and with local communities for the development of standards
9    and programs for better correctional services in this
10    State.
11        (k) To administer all moneys and properties of the
12    Department.
13        (l) To report annually to the Governor on the committed
14    persons, institutions and programs of the Department.
15        (l-5) (Blank).
16        (m) To make all rules and regulations and exercise all
17    powers and duties vested by law in the Department.
18        (n) To establish rules and regulations for
19    administering a system of sentence credits, established in
20    accordance with Section 3-6-3, subject to review by the
21    Prisoner Review Board.
22        (o) To administer the distribution of funds from the
23    State Treasury to reimburse counties where State penal
24    institutions are located for the payment of assistant
25    state's attorneys' salaries under Section 4-2001 of the
26    Counties Code.

 

 

HB4300- 929 -LRB099 14379 HLH 38474 b

1        (p) To exchange information with the Department of
2    Human Services and the Department of Healthcare and Family
3    Services for the purpose of verifying living arrangements
4    and for other purposes directly connected with the
5    administration of this Code and the Illinois Public Aid
6    Code.
7        (q) To establish a diversion program.
8        The program shall provide a structured environment for
9    selected technical parole or mandatory supervised release
10    violators and committed persons who have violated the rules
11    governing their conduct while in work release. This program
12    shall not apply to those persons who have committed a new
13    offense while serving on parole or mandatory supervised
14    release or while committed to work release.
15        Elements of the program shall include, but shall not be
16    limited to, the following:
17            (1) The staff of a diversion facility shall provide
18        supervision in accordance with required objectives set
19        by the facility.
20            (2) Participants shall be required to maintain
21        employment.
22            (3) Each participant shall pay for room and board
23        at the facility on a sliding-scale basis according to
24        the participant's income.
25            (4) Each participant shall:
26                (A) provide restitution to victims in

 

 

HB4300- 930 -LRB099 14379 HLH 38474 b

1            accordance with any court order;
2                (B) provide financial support to his
3            dependents; and
4                (C) make appropriate payments toward any other
5            court-ordered obligations.
6            (5) Each participant shall complete community
7        service in addition to employment.
8            (6) Participants shall take part in such
9        counseling, educational and other programs as the
10        Department may deem appropriate.
11            (7) Participants shall submit to drug and alcohol
12        screening.
13            (8) The Department shall promulgate rules
14        governing the administration of the program.
15        (r) To enter into intergovernmental cooperation
16    agreements under which persons in the custody of the
17    Department may participate in a county impact
18    incarceration program established under Section 3-6038 or
19    3-15003.5 of the Counties Code.
20        (r-5) (Blank).
21        (r-10) To systematically and routinely identify with
22    respect to each streetgang active within the correctional
23    system: (1) each active gang; (2) every existing inter-gang
24    affiliation or alliance; and (3) the current leaders in
25    each gang. The Department shall promptly segregate leaders
26    from inmates who belong to their gangs and allied gangs.

 

 

HB4300- 931 -LRB099 14379 HLH 38474 b

1    "Segregate" means no physical contact and, to the extent
2    possible under the conditions and space available at the
3    correctional facility, prohibition of visual and sound
4    communication. For the purposes of this paragraph (r-10),
5    "leaders" means persons who:
6            (i) are members of a criminal streetgang;
7            (ii) with respect to other individuals within the
8        streetgang, occupy a position of organizer,
9        supervisor, or other position of management or
10        leadership; and
11            (iii) are actively and personally engaged in
12        directing, ordering, authorizing, or requesting
13        commission of criminal acts by others, which are
14        punishable as a felony, in furtherance of streetgang
15        related activity both within and outside of the
16        Department of Corrections.
17    "Streetgang", "gang", and "streetgang related" have the
18    meanings ascribed to them in Section 10 of the Illinois
19    Streetgang Terrorism Omnibus Prevention Act.
20        (s) To operate a super-maximum security institution,
21    in order to manage and supervise inmates who are disruptive
22    or dangerous and provide for the safety and security of the
23    staff and the other inmates.
24        (t) To monitor any unprivileged conversation or any
25    unprivileged communication, whether in person or by mail,
26    telephone, or other means, between an inmate who, before

 

 

HB4300- 932 -LRB099 14379 HLH 38474 b

1    commitment to the Department, was a member of an organized
2    gang and any other person without the need to show cause or
3    satisfy any other requirement of law before beginning the
4    monitoring, except as constitutionally required. The
5    monitoring may be by video, voice, or other method of
6    recording or by any other means. As used in this
7    subdivision (1)(t), "organized gang" has the meaning
8    ascribed to it in Section 10 of the Illinois Streetgang
9    Terrorism Omnibus Prevention Act.
10        As used in this subdivision (1)(t), "unprivileged
11    conversation" or "unprivileged communication" means a
12    conversation or communication that is not protected by any
13    privilege recognized by law or by decision, rule, or order
14    of the Illinois Supreme Court.
15        (u) To establish a Women's and Children's Pre-release
16    Community Supervision Program for the purpose of providing
17    housing and services to eligible female inmates, as
18    determined by the Department, and their newborn and young
19    children.
20        (u-5) To issue an order, whenever a person committed to
21    the Department absconds or absents himself or herself,
22    without authority to do so, from any facility or program to
23    which he or she is assigned. The order shall be certified
24    by the Director, the Supervisor of the Apprehension Unit,
25    or any person duly designated by the Director, with the
26    seal of the Department affixed. The order shall be directed

 

 

HB4300- 933 -LRB099 14379 HLH 38474 b

1    to all sheriffs, coroners, and police officers, or to any
2    particular person named in the order. Any order issued
3    pursuant to this subdivision (1) (u-5) shall be sufficient
4    warrant for the officer or person named in the order to
5    arrest and deliver the committed person to the proper
6    correctional officials and shall be executed the same as
7    criminal process.
8        (v) To do all other acts necessary to carry out the
9    provisions of this Chapter.
10    (2) The Department of Corrections shall by January 1, 1998,
11consider building and operating a correctional facility within
12100 miles of a county of over 2,000,000 inhabitants, especially
13a facility designed to house juvenile participants in the
14impact incarceration program.
15    (3) When the Department lets bids for contracts for medical
16services to be provided to persons committed to Department
17facilities by a health maintenance organization, medical
18service corporation, or other health care provider, the bid may
19only be let to a health care provider that has obtained an
20irrevocable letter of credit or performance bond issued by a
21company whose bonds have an investment grade or higher rating
22by a bond rating organization.
23    (4) When the Department lets bids for contracts for food or
24commissary services to be provided to Department facilities,
25the bid may only be let to a food or commissary services
26provider that has obtained an irrevocable letter of credit or

 

 

HB4300- 934 -LRB099 14379 HLH 38474 b

1performance bond issued by a company whose bonds have an
2investment grade or higher rating by a bond rating
3organization.
4    (5) On and after the date 6 months after August 16, 2013
5(the effective date of Public Act 98-488), as provided in the
6Executive Order 1 (2012) Implementation Act, all of the powers,
7duties, rights, and responsibilities related to State
8healthcare purchasing under this Code that were transferred
9from the Department of Corrections to the Department of
10Healthcare and Family Services by Executive Order 3 (2005) are
11transferred back to the Department of Corrections; however,
12powers, duties, rights, and responsibilities related to State
13healthcare purchasing under this Code that were exercised by
14the Department of Corrections before the effective date of
15Executive Order 3 (2005) but that pertain to individuals
16resident in facilities operated by the Department of Juvenile
17Justice are transferred to the Department of Juvenile Justice.
18    (6) Beginning July 1, 2016, the Department of Corrections
19shall implement measures to ensure that the Department
20establishes and maintains adequate staffing levels of
21correctional officers at its institutions and facilities such
22that no officer shall perform more than 2 hours of overtime
23work per week. Beginning with the effective date of this
24amendatory Act of the 99th General Assembly, a number of
25correctional officers shall be added incrementally with
26subsequent additions established until the adequate staffing

 

 

HB4300- 935 -LRB099 14379 HLH 38474 b

1level is reached. Anytime the number of correctional officers
2drops below a level in which an officer must work more than 2
3hours of overtime per week, the Department shall immediately
4implement hiring procedures to reestablish the number of
5correctional officers back to a level in which an officer may
6not perform more than 2 hours of overtime per week.
7(Source: P.A. 97-697, eff. 6-22-12; 97-800, eff. 7-13-12;
897-802, eff. 7-13-12; 98-463, eff. 8-16-13; 98-488, eff.
98-16-13; 98-558, eff. 1-1-14; 98-756, eff. 7-16-14.)
 
10
ARTICLE 995. NON-ACCELERATION

 
11    Section 995-95. No acceleration or delay. Where this Act
12makes changes in a statute that is represented in this Act by
13text that is not yet or no longer in effect (for example, a
14Section represented by multiple versions), the use of that text
15does not accelerate or delay the taking effect of (i) the
16changes made by this Act or (ii) provisions derived from any
17other Public Act.
 
18
ARTICLE 999. EFFECTIVE DATE

 
19    Section 999-999. Effective date. This Act takes effect upon
20becoming law.

 

 

HB4300- 936 -LRB099 14379 HLH 38474 b

1 INDEX
2 Statutes amended in order of appearance
3    New Act
4    20 ILCS 605/605-300 rep.
5    20 ILCS 663/55 new
6    35 ILCS 5/203from Ch. 120, par. 2-203
7    35 ILCS 5/304from Ch. 120, par. 3-304
8    35 ILCS 5/309 new
9    35 ILCS 5/901from Ch. 120, par. 9-901
10    35 ILCS 5/1501from Ch. 120, par. 15-1501
11    35 ILCS 200/3-40
12    35 ILCS 200/4-20
13    35 ILCS 745/10
14    55 ILCS 5/3-10007from Ch. 34, par. 3-10007
15    55 ILCS 5/4-6001from Ch. 34, par. 4-6001
16    55 ILCS 5/4-6002from Ch. 34, par. 4-6002
17    55 ILCS 5/4-6003from Ch. 34, par. 4-6003
18    55 ILCS 5/4-8002from Ch. 34, par. 4-8002
19    705 ILCS 105/27.3from Ch. 25, par. 27.3
20    805 ILCS 180/50-10
21    35 ILCS 5/1501from Ch. 120, par. 15-1501
22    20 ILCS 415/7dfrom Ch. 127, par. 63b107d
23    20 ILCS 3105/6from Ch. 127, par. 776
24    20 ILCS 3501/801-15
25    20 ILCS 3960/4from Ch. 111 1/2, par. 1154

 

 

HB4300- 937 -LRB099 14379 HLH 38474 b

1    40 ILCS 5/2-127from Ch. 108 1/2, par. 2-127
2    40 ILCS 5/14-134from Ch. 108 1/2, par. 14-134
3    40 ILCS 5/15-159from Ch. 108 1/2, par. 15-159
4    40 ILCS 5/16-167from Ch. 108 1/2, par. 16-167
5    40 ILCS 5/18-158from Ch. 108 1/2, par. 18-158
6    70 ILCS 210/14from Ch. 85, par. 1234
7    70 ILCS 210/23.1from Ch. 85, par. 1243.1
8    70 ILCS 1810/12from Ch. 19, par. 163
9    105 ILCS 5/14-7.02from Ch. 122, par. 14-7.02
10    110 ILCS 205/5from Ch. 144, par. 185
11    110 ILCS 310/1from Ch. 144, par. 41
12    110 ILCS 520/4from Ch. 144, par. 654
13    110 ILCS 660/5-20
14    110 ILCS 665/10-20
15    110 ILCS 670/15-20
16    110 ILCS 675/20-20
17    110 ILCS 680/25-20
18    110 ILCS 685/30-20
19    110 ILCS 690/35-20
20    110 ILCS 805/2-5from Ch. 122, par. 102-5
21    110 ILCS 947/15
22    225 ILCS 320/7from Ch. 111, par. 1106
23    225 ILCS 320/39from Ch. 111, par. 1137
24    230 ILCS 5/5from Ch. 8, par. 37-5
25    230 ILCS 10/5from Ch. 120, par. 2405
26    820 ILCS 305/8.3

 

 

HB4300- 938 -LRB099 14379 HLH 38474 b

1    820 ILCS 305/13.1from Ch. 48, par. 138.13-1
2    820 ILCS 305/14.1from Ch. 48, par. 138.14-1
3    35 ILCS 105/3-55from Ch. 120, par. 439.3-55
4    35 ILCS 110/2from Ch. 120, par. 439.32
5    35 ILCS 115/2from Ch. 120, par. 439.102
6    35 ILCS 120/2-5
7    35 ILCS 105/3-55from Ch. 120, par. 439.3-55
8    35 ILCS 105/3-60from Ch. 120, par. 439.3-60
9    35 ILCS 110/3-45from Ch. 120, par. 439.33-45
10    35 ILCS 110/3-50from Ch. 120, par. 439.33-50
11    35 ILCS 115/2from Ch. 120, par. 439.102
12    35 ILCS 120/2-5
13    35 ILCS 120/2-50from Ch. 120, par. 441-50
14    35 ILCS 105/3-10
15    35 ILCS 110/3-10from Ch. 120, par. 439.33-10
16    35 ILCS 115/3-10from Ch. 120, par. 439.103-10
17    35 ILCS 120/2-10
18    20 ILCS 655/5.3from Ch. 67 1/2, par. 608
19    35 ILCS 105/9from Ch. 120, par. 439.9
20    35 ILCS 110/9from Ch. 120, par. 439.39
21    35 ILCS 115/9from Ch. 120, par. 439.109
22    35 ILCS 120/3from Ch. 120, par. 442
23    35 ILCS 130/2from Ch. 120, par. 453.2
24    35 ILCS 135/3from Ch. 120, par. 453.33
25    35 ILCS 145/6from Ch. 120, par. 481b.36
26    35 ILCS 505/2bfrom Ch. 120, par. 418b

 

 

HB4300- 939 -LRB099 14379 HLH 38474 b

1    35 ILCS 505/6from Ch. 120, par. 422
2    35 ILCS 505/6afrom Ch. 120, par. 422a
3    35 ILCS 630/6from Ch. 120, par. 2006
4    235 ILCS 5/8-2from Ch. 43, par. 159
5    35 ILCS 105/2from Ch. 120, par. 439.2
6    35 ILCS 110/2from Ch. 120, par. 439.32
7    35 ILCS 120/1from Ch. 120, par. 440
8    35 ILCS 145/2from Ch. 120, par. 481b.32
9    30 ILCS 105/12-2from Ch. 127, par. 148-2
10    35 ILCS 16/40
11    20 ILCS 1605/7.9 new
12    35 ILCS 5/201from Ch. 120, par. 2-201
13    35 ILCS 105/3-5
14    35 ILCS 105/3-50from Ch. 120, par. 439.3-50
15    35 ILCS 110/2from Ch. 120, par. 439.32
16    35 ILCS 115/2from Ch. 120, par. 439.102
17    35 ILCS 120/2-45from Ch. 120, par. 441-45
18    35 ILCS 5/220
19    20 ILCS 2505/2505-760 new
20    35 ILCS 105/3-5
21    35 ILCS 110/3-5
22    35 ILCS 115/3-5
23    35 ILCS 120/2-5
24    35 ILCS 640/2-4
25    305 ILCS 5/5-5from Ch. 23, par. 5-5
26    305 ILCS 5/5-5.2from Ch. 23, par. 5-5.2

 

 

HB4300- 940 -LRB099 14379 HLH 38474 b

1    305 ILCS 5/5-5b.1a new
2    305 ILCS 5/5-5b.2 new
3    305 ILCS 5/5-30.3 new
4    305 ILCS 5/5A-2from Ch. 23, par. 5A-2
5    305 ILCS 5/5A-12.2
6    305 ILCS 5/5A-12.5
7    305 ILCS 5/12-13.1
8    730 ILCS 5/3-2-2from Ch. 38, par. 1003-2-2