99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
SB0743

 

Introduced 2/3/2015, by Sen. Thomas Cullerton

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/2  from Ch. 120, par. 439.2
35 ILCS 120/1  from Ch. 120, par. 440

    Amends the Use Tax Act and the Retailers' Occupation Tax Act. Provides that, with respect to tangible personal property that is sold for the purpose of leasing the property in Illinois for a defined period, the term "selling price" means the consideration received by the lessor pursuant to the lease contract, including amounts due at lease signing and all monthly or other regular payments charged over the term of the lease. Provides that, for those items of tangible personal property, "selling price" also includes amounts received from the lessee that are not calculated at the time the lease is executed.


LRB099 05718 HLH 25761 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB0743LRB099 05718 HLH 25761 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Use Tax Act is amended by changing Section 2
5as follows:
 
6    (35 ILCS 105/2)  (from Ch. 120, par. 439.2)
7    Sec. 2. Definitions.
8    "Use" means the exercise by any person of any right or
9power over tangible personal property incident to the ownership
10of that property, except that it does not include the sale of
11such property in any form as tangible personal property in the
12regular course of business to the extent that such property is
13not first subjected to a use for which it was purchased, and
14does not include the use of such property by its owner for
15demonstration purposes: Provided that the property purchased
16is deemed to be purchased for the purpose of resale, despite
17first being used, to the extent to which it is resold as an
18ingredient of an intentionally produced product or by-product
19of manufacturing. "Use" does not mean the demonstration use or
20interim use of tangible personal property by a retailer before
21he sells that tangible personal property. For watercraft or
22aircraft, if the period of demonstration use or interim use by
23the retailer exceeds 18 months, the retailer shall pay on the

 

 

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1retailers' original cost price the tax imposed by this Act, and
2no credit for that tax is permitted if the watercraft or
3aircraft is subsequently sold by the retailer. "Use" does not
4mean the physical incorporation of tangible personal property,
5to the extent not first subjected to a use for which it was
6purchased, as an ingredient or constituent, into other tangible
7personal property (a) which is sold in the regular course of
8business or (b) which the person incorporating such ingredient
9or constituent therein has undertaken at the time of such
10purchase to cause to be transported in interstate commerce to
11destinations outside the State of Illinois: Provided that the
12property purchased is deemed to be purchased for the purpose of
13resale, despite first being used, to the extent to which it is
14resold as an ingredient of an intentionally produced product or
15by-product of manufacturing.
16    "Watercraft" means a Class 2, Class 3, or Class 4
17watercraft as defined in Section 3-2 of the Boat Registration
18and Safety Act, a personal watercraft, or any boat equipped
19with an inboard motor.
20    "Purchase at retail" means the acquisition of the ownership
21of or title to tangible personal property through a sale at
22retail.
23    "Purchaser" means anyone who, through a sale at retail,
24acquires the ownership of tangible personal property for a
25valuable consideration.
26    "Sale at retail" means any transfer of the ownership of or

 

 

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1title to tangible personal property to a purchaser, for the
2purpose of use, and not for the purpose of resale in any form
3as tangible personal property to the extent not first subjected
4to a use for which it was purchased, for a valuable
5consideration: Provided that the property purchased is deemed
6to be purchased for the purpose of resale, despite first being
7used, to the extent to which it is resold as an ingredient of
8an intentionally produced product or by-product of
9manufacturing. For this purpose, slag produced as an incident
10to manufacturing pig iron or steel and sold is considered to be
11an intentionally produced by-product of manufacturing. "Sale
12at retail" includes any such transfer made for resale unless
13made in compliance with Section 2c of the Retailers' Occupation
14Tax Act, as incorporated by reference into Section 12 of this
15Act. Transactions whereby the possession of the property is
16transferred but the seller retains the title as security for
17payment of the selling price are sales.
18    "Sale at retail" shall also be construed to include any
19Illinois florist's sales transaction in which the purchase
20order is received in Illinois by a florist and the sale is for
21use or consumption, but the Illinois florist has a florist in
22another state deliver the property to the purchaser or the
23purchaser's donee in such other state.
24    Nonreusable tangible personal property that is used by
25persons engaged in the business of operating a restaurant,
26cafeteria, or drive-in is a sale for resale when it is

 

 

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1transferred to customers in the ordinary course of business as
2part of the sale of food or beverages and is used to deliver,
3package, or consume food or beverages, regardless of where
4consumption of the food or beverages occurs. Examples of those
5items include, but are not limited to nonreusable, paper and
6plastic cups, plates, baskets, boxes, sleeves, buckets or other
7containers, utensils, straws, placemats, napkins, doggie bags,
8and wrapping or packaging materials that are transferred to
9customers as part of the sale of food or beverages in the
10ordinary course of business.
11    The purchase, employment and transfer of such tangible
12personal property as newsprint and ink for the primary purpose
13of conveying news (with or without other information) is not a
14purchase, use or sale of tangible personal property.
15    "Selling price" means the consideration for a sale valued
16in money whether received in money or otherwise, including
17cash, credits, property other than as hereinafter provided, and
18services, but not including the value of or credit given for
19traded-in tangible personal property where the item that is
20traded-in is of like kind and character as that which is being
21sold, and shall be determined without any deduction on account
22of the cost of the property sold, the cost of materials used,
23labor or service cost or any other expense whatsoever, but does
24not include interest or finance charges which appear as
25separate items on the bill of sale or sales contract nor
26charges that are added to prices by sellers on account of the

 

 

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1seller's tax liability under the "Retailers' Occupation Tax
2Act", or on account of the seller's duty to collect, from the
3purchaser, the tax that is imposed by this Act, or, except as
4otherwise provided with respect to any cigarette tax imposed by
5a home rule unit, on account of the seller's tax liability
6under any local occupation tax administered by the Department,
7or, except as otherwise provided with respect to any cigarette
8tax imposed by a home rule unit on account of the seller's duty
9to collect, from the purchasers, the tax that is imposed under
10any local use tax administered by the Department. Effective
11December 1, 1985, "selling price" shall include charges that
12are added to prices by sellers on account of the seller's tax
13liability under the Cigarette Tax Act, on account of the
14seller's duty to collect, from the purchaser, the tax imposed
15under the Cigarette Use Tax Act, and on account of the seller's
16duty to collect, from the purchaser, any cigarette tax imposed
17by a home rule unit.
18    Notwithstanding any law to the contrary, with respect to
19tangible personal property that is sold for any motor vehicle,
20as defined in Section 1-146 of the Vehicle Code, that is sold
21on or after January 1, 2015 for the purpose of leasing the
22property in Illinois vehicle for a defined period that is
23longer than one year and (1) is a motor vehicle of the second
24division that: (A) is a self-contained motor vehicle designed
25or permanently converted to provide living quarters for
26recreational, camping, or travel use, with direct walk through

 

 

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1access to the living quarters from the driver's seat; (B) is of
2the van configuration designed for the transportation of not
3less than 7 nor more than 16 passengers; or (C) has a gross
4vehicle weight rating of 8,000 pounds or less or (2) is a motor
5vehicle of the first division, "selling price" or "amount of
6sale" means the consideration received by the lessor pursuant
7to the lease contract, including amounts due at lease signing
8and all monthly or other regular payments charged over the term
9of the lease. Also included in the selling price is any amount
10received by the lessor from the lessee for the use of the
11property leased vehicle that is not calculated at the time the
12lease is executed, including, but not limited to, excess
13mileage charges and charges for excess wear and tear. The For
14sales that occur in Illinois, with respect to any amount
15received by the lessor from the lessee for the leased vehicle
16that is not calculated at the time the lease is executed, the
17lessor who purchased the motor vehicle does not incur the tax
18imposed by the Use Tax Act on those amounts, and the retailer
19who makes the retail sale of the property motor vehicle to the
20lessor is not required to collect the tax imposed by this Act
21or to pay the tax imposed by the Retailers' Occupation Tax Act
22on those amounts. However, the lessor who purchased the
23property motor vehicle assumes the liability for reporting and
24paying the tax on the selling price those amounts directly to
25the Department in the same form (Illinois Retailers' Occupation
26Tax, and local retailers' occupation taxes, if applicable) in

 

 

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1which the retailer would have reported and paid such tax if the
2retailer had accounted for the tax to the Department. The For
3amounts received by the lessor from the lessee that are not
4calculated at the time the lease is executed, the lessor must
5file the return and pay the tax to the Department by the due
6date otherwise required by this Act for returns other than
7transaction returns. If the retailer is entitled under this Act
8to a discount for collecting and remitting the tax imposed
9under this Act to the Department with respect to the sale of
10the property motor vehicle to the lessor, then the right to the
11discount provided in this Act shall be transferred to the
12lessor with respect to the tax paid by the lessor for any
13amount received by the lessor from the lessee for the leased
14property vehicle that is not calculated at the time the lease
15is executed; provided that the discount is only allowed if the
16return is timely filed and for amounts timely paid. With
17respect to tangible personal property that is sold for the
18purpose of leasing the property in Illinois for a defined
19period, the sale occurs at the time the consideration is
20received by the lessor. This paragraph does not apply to leases
21for which, at the time the lease is entered into, the term of
22the lease is not a defined period, including leases with a
23defined initial period with the option to continue the lease on
24a month-to-month or other basis beyond the initial defined
25period.
26     The "selling price" of a motor vehicle that is sold on or

 

 

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

 

 

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

 

 

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1purchaser and in such a way as to render the property of value
2only to such purchaser, if such tangible personal property so
3produced on special order serves substantially the same
4function as stock or standard items of tangible personal
5property that are sold at retail.
6    A person whose activities are organized and conducted
7primarily as a not-for-profit service enterprise, and who
8engages in selling tangible personal property at retail
9(whether to the public or merely to members and their guests)
10is a retailer with respect to such transactions, excepting only
11a person organized and operated exclusively for charitable,
12religious or educational purposes either (1), to the extent of
13sales by such person to its members, students, patients or
14inmates of tangible personal property to be used primarily for
15the purposes of such person, or (2), to the extent of sales by
16such person of tangible personal property which is not sold or
17offered for sale by persons organized for profit. The selling
18of school books and school supplies by schools at retail to
19students is not "primarily for the purposes of" the school
20which does such selling. This paragraph does not apply to nor
21subject to taxation occasional dinners, social or similar
22activities of a person organized and operated exclusively for
23charitable, religious or educational purposes, whether or not
24such activities are open to the public.
25    A person who is the recipient of a grant or contract under
26Title VII of the Older Americans Act of 1965 (P.L. 92-258) and

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    maintaining a place of business in that state.
2    "Bulk vending machine" means a vending machine, containing
3unsorted confections, nuts, toys, or other items designed
4primarily to be used or played with by children which, when a
5coin or coins of a denomination not larger than $0.50 are
6inserted, are dispensed in equal portions, at random and
7without selection by the customer.
8(Source: P.A. 98-628, eff. 1-1-15; 98-1080, eff. 8-26-14;
998-1089, eff. 1-1-15; revised 10-1-14.)
 
10    Section 10. The Retailers' Occupation Tax Act is amended by
11changing Section 1 as follows:
 
12    (35 ILCS 120/1)  (from Ch. 120, par. 440)
13    Sec. 1. Definitions. "Sale at retail" means any transfer of
14the ownership of or title to tangible personal property to a
15purchaser, for the purpose of use or consumption, and not for
16the purpose of resale in any form as tangible personal property
17to the extent not first subjected to a use for which it was
18purchased, for a valuable consideration: Provided that the
19property purchased is deemed to be purchased for the purpose of
20resale, despite first being used, to the extent to which it is
21resold as an ingredient of an intentionally produced product or
22byproduct of manufacturing. For this purpose, slag produced as
23an incident to manufacturing pig iron or steel and sold is
24considered to be an intentionally produced byproduct of

 

 

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1manufacturing. Transactions whereby the possession of the
2property is transferred but the seller retains the title as
3security for payment of the selling price shall be deemed to be
4sales.
5    "Sale at retail" shall be construed to include any transfer
6of the ownership of or title to tangible personal property to a
7purchaser, for use or consumption by any other person to whom
8such purchaser may transfer the tangible personal property
9without a valuable consideration, and to include any transfer,
10whether made for or without a valuable consideration, for
11resale in any form as tangible personal property unless made in
12compliance with Section 2c of this Act.
13    Sales of tangible personal property, which property, to the
14extent not first subjected to a use for which it was purchased,
15as an ingredient or constituent, goes into and forms a part of
16tangible personal property subsequently the subject of a "Sale
17at retail", are not sales at retail as defined in this Act:
18Provided that the property purchased is deemed to be purchased
19for the purpose of resale, despite first being used, to the
20extent to which it is resold as an ingredient of an
21intentionally produced product or byproduct of manufacturing.
22    "Sale at retail" shall be construed to include any Illinois
23florist's sales transaction in which the purchase order is
24received in Illinois by a florist and the sale is for use or
25consumption, but the Illinois florist has a florist in another
26state deliver the property to the purchaser or the purchaser's

 

 

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1donee in such other state.
2    Nonreusable tangible personal property that is used by
3persons engaged in the business of operating a restaurant,
4cafeteria, or drive-in is a sale for resale when it is
5transferred to customers in the ordinary course of business as
6part of the sale of food or beverages and is used to deliver,
7package, or consume food or beverages, regardless of where
8consumption of the food or beverages occurs. Examples of those
9items include, but are not limited to nonreusable, paper and
10plastic cups, plates, baskets, boxes, sleeves, buckets or other
11containers, utensils, straws, placemats, napkins, doggie bags,
12and wrapping or packaging materials that are transferred to
13customers as part of the sale of food or beverages in the
14ordinary course of business.
15    The purchase, employment and transfer of such tangible
16personal property as newsprint and ink for the primary purpose
17of conveying news (with or without other information) is not a
18purchase, use or sale of tangible personal property.
19    A person whose activities are organized and conducted
20primarily as a not-for-profit service enterprise, and who
21engages in selling tangible personal property at retail
22(whether to the public or merely to members and their guests)
23is engaged in the business of selling tangible personal
24property at retail with respect to such transactions, excepting
25only a person organized and operated exclusively for
26charitable, religious or educational purposes either (1), to

 

 

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1the extent of sales by such person to its members, students,
2patients or inmates of tangible personal property to be used
3primarily for the purposes of such person, or (2), to the
4extent of sales by such person of tangible personal property
5which is not sold or offered for sale by persons organized for
6profit. The selling of school books and school supplies by
7schools at retail to students is not "primarily for the
8purposes of" the school which does such selling. The provisions
9of this paragraph shall not apply to nor subject to taxation
10occasional dinners, socials or similar activities of a person
11organized and operated exclusively for charitable, religious
12or educational purposes, whether or not such activities are
13open to the public.
14    A person who is the recipient of a grant or contract under
15Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
16serves meals to participants in the federal Nutrition Program
17for the Elderly in return for contributions established in
18amount by the individual participant pursuant to a schedule of
19suggested fees as provided for in the federal Act is not
20engaged in the business of selling tangible personal property
21at retail with respect to such transactions.
22    "Purchaser" means anyone who, through a sale at retail,
23acquires the ownership of or title to tangible personal
24property for a valuable consideration.
25    "Reseller of motor fuel" means any person engaged in the
26business of selling or delivering or transferring title of

 

 

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1motor fuel to another person other than for use or consumption.
2No person shall act as a reseller of motor fuel within this
3State without first being registered as a reseller pursuant to
4Section 2c or a retailer pursuant to Section 2a.
5    "Selling price" or the "amount of sale" means the
6consideration for a sale valued in money whether received in
7money or otherwise, including cash, credits, property, other
8than as hereinafter provided, and services, but not including
9the value of or credit given for traded-in tangible personal
10property where the item that is traded-in is of like kind and
11character as that which is being sold, and shall be determined
12without any deduction on account of the cost of the property
13sold, the cost of materials used, labor or service cost or any
14other expense whatsoever, but does not include charges that are
15added to prices by sellers on account of the seller's tax
16liability under this Act, or on account of the seller's duty to
17collect, from the purchaser, the tax that is imposed by the Use
18Tax Act, or, except as otherwise provided with respect to any
19cigarette tax imposed by a home rule unit, on account of the
20seller's tax liability under any local occupation tax
21administered by the Department, or, except as otherwise
22provided with respect to any cigarette tax imposed by a home
23rule unit on account of the seller's duty to collect, from the
24purchasers, the tax that is imposed under any local use tax
25administered by the Department. Effective December 1, 1985,
26"selling price" shall include charges that are added to prices

 

 

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1by sellers on account of the seller's tax liability under the
2Cigarette Tax Act, on account of the sellers' duty to collect,
3from the purchaser, the tax imposed under the Cigarette Use Tax
4Act, and on account of the seller's duty to collect, from the
5purchaser, any cigarette tax imposed by a home rule unit.
6    Notwithstanding any law to the contrary, with respect to
7tangible personal property that is sold for any motor vehicle,
8as defined in Section 1-146 of the Vehicle Code, that is sold
9on or after January 1, 2015 for the purpose of leasing the
10property in Illinois vehicle for a defined period that is
11longer than one year and (1) is a motor vehicle of the second
12division that: (A) is a self-contained motor vehicle designed
13or permanently converted to provide living quarters for
14recreational, camping, or travel use, with direct walk through
15access to the living quarters from the driver's seat; (B) is of
16the van configuration designed for the transportation of not
17less than 7 nor more than 16 passengers; or (C) has a gross
18vehicle weight rating of 8,000 pounds or less or (2) is a motor
19vehicle of the first division, "selling price" or "amount of
20sale" means the consideration received by the lessor pursuant
21to the lease contract, including amounts due at lease signing
22and all monthly or other regular payments charged over the term
23of the lease. Also included in the selling price is any amount
24received by the lessor from the lessee for the use of the
25property leased vehicle that is not calculated at the time the
26lease is executed, including, but not limited to, excess

 

 

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

 

 

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1amount received by the lessor from the lessee for the leased
2property vehicle that is not calculated at the time the lease
3is executed; provided that the discount is only allowed if the
4return is timely filed and for amounts timely paid. With
5respect to tangible personal property that is sold for the
6purpose of leasing the property in Illinois for a defined
7period, the sale occurs at the time the consideration is
8received by the lessor. This paragraph does not apply to leases
9for which, at the time the lease is entered into, the term of
10the lease is not a defined period, including leases with a
11defined initial period with the option to continue the lease on
12a month-to-month or other basis beyond the initial defined
13period.
14    The "selling price" of a motor vehicle that is sold on or
15after January 1, 2015 for the purpose of leasing for a defined
16period of longer than one year shall not be reduced by the
17value of or credit given for traded-in tangible personal
18property owned by the lessor, nor shall it be reduced by the
19value of or credit given for traded-in tangible personal
20property owned by the lessee, regardless of whether the
21trade-in value thereof is assigned by the lessee to the lessor.
22In the case of a motor vehicle that is sold for the purpose of
23leasing for a defined period of longer than one year, the sale
24occurs at the time of the delivery of the vehicle, regardless
25of the due date of any lease payments. A lessor who incurs a
26Retailers' Occupation Tax liability on the sale of a motor

 

 

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

 

 

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

 

 

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

 

 

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