Sen. Thomas Cullerton

Filed: 3/12/2015

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 743

2    AMENDMENT NO. ______. Amend Senate Bill 743 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Use Tax Act is amended by changing Section
52 as 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

 

 

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

 

 

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

 

 

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1order is received in Illinois by a florist and the sale is for
2use or consumption, but the Illinois florist has a florist in
3another state deliver the property to the purchaser or the
4purchaser's donee in such other state.
5    Nonreusable tangible personal property that is used by
6persons engaged in the business of operating a restaurant,
7cafeteria, or drive-in is a sale for resale when it is
8transferred to customers in the ordinary course of business as
9part of the sale of food or beverages and is used to deliver,
10package, or consume food or beverages, regardless of where
11consumption of the food or beverages occurs. Examples of those
12items include, but are not limited to nonreusable, paper and
13plastic cups, plates, baskets, boxes, sleeves, buckets or other
14containers, utensils, straws, placemats, napkins, doggie bags,
15and wrapping or packaging materials that are transferred to
16customers as part of the sale of food or beverages in the
17ordinary course of business.
18    The purchase, employment and transfer of such tangible
19personal property as newsprint and ink for the primary purpose
20of conveying news (with or without other information) is not a
21purchase, use or sale of tangible personal property.
22    "Selling price" means the consideration for a sale valued
23in money whether received in money or otherwise, including
24cash, credits, property other than as hereinafter provided, and
25services, but not including the value of or credit given for
26traded-in tangible personal property where the item that is

 

 

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1traded-in is of like kind and character as that which is being
2sold, and shall be determined without any deduction on account
3of the cost of the property sold, the cost of materials used,
4labor or service cost or any other expense whatsoever, but does
5not include interest or finance charges which appear as
6separate items on the bill of sale or sales contract nor
7charges that are added to prices by sellers on account of the
8seller's tax liability under the "Retailers' Occupation Tax
9Act", or on account of the seller's duty to collect, from the
10purchaser, the tax that is imposed by this Act, or, except as
11otherwise provided with respect to any cigarette tax imposed by
12a home rule unit, on account of the seller's tax liability
13under any local occupation tax administered by the Department,
14or, except as otherwise provided with respect to any cigarette
15tax imposed by a home rule unit on account of the seller's duty
16to collect, from the purchasers, the tax that is imposed under
17any local use tax administered by the Department. Effective
18December 1, 1985, "selling price" shall include charges that
19are added to prices by sellers on account of the seller's tax
20liability under the Cigarette Tax Act, on account of the
21seller's duty to collect, from the purchaser, the tax imposed
22under the Cigarette Use Tax Act, and on account of the seller's
23duty to collect, from the purchaser, any cigarette tax imposed
24by a home rule unit.
25    Notwithstanding any law to the contrary, for any motor
26vehicle, as defined in Section 1-146 of the Vehicle Code, that

 

 

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1is sold on or after January 1, 2015 for the purpose of leasing
2the vehicle for a defined period that is longer than one year
3and (1) is a motor vehicle of the second division that: (A) is
4a self-contained motor vehicle designed or permanently
5converted to provide living quarters for recreational,
6camping, or travel use, with direct walk through access to the
7living quarters from the driver's seat; (B) is of the van
8configuration designed for the transportation of not less than
97 nor more than 16 passengers; or (C) has a gross vehicle
10weight rating of 8,000 pounds or less or (2) is a motor vehicle
11of the first division, "selling price" or "amount of sale"
12means the consideration received by the lessor pursuant to the
13lease contract, including amounts due at lease signing and all
14monthly or other regular payments charged over the term of the
15lease. Also included in the selling price is any amount
16received by the lessor from the lessee for the leased vehicle
17that is not calculated at the time the lease is executed,
18including, but not limited to, excess mileage charges and
19charges for excess wear and tear. For sales that occur in
20Illinois, with respect to any amount received by the lessor
21from the lessee for the leased vehicle that is not calculated
22at the time the lease is executed, the lessor who purchased the
23motor vehicle does not incur the tax imposed by the Use Tax Act
24on those amounts, and the retailer who makes the retail sale of
25the motor vehicle to the lessor is not required to collect the
26tax imposed by this Act or to pay the tax imposed by the

 

 

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

 

 

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1value of or credit given for traded-in tangible personal
2property owned by the lessee, regardless of whether the
3trade-in value thereof is assigned by the lessee to the lessor.
4In the case of a motor vehicle that is sold for the purpose of
5leasing for a defined period of longer than one year, the sale
6occurs at the time of the delivery of the vehicle, regardless
7of the due date of any lease payments. A lessor who incurs a
8Retailers' Occupation Tax liability on the sale of a motor
9vehicle coming off lease may not take a credit against that
10liability for the Use Tax the lessor paid upon the purchase of
11the motor vehicle (or for any tax the lessor paid with respect
12to any amount received by the lessor from the lessee for the
13leased vehicle that was not calculated at the time the lease
14was executed) if the selling price of the motor vehicle at the
15time of purchase was calculated using the definition of
16"selling price" as defined in this paragraph. Notwithstanding
17any other provision of this Act to the contrary, lessors shall
18file all returns and make all payments required under this
19paragraph to the Department by electronic means in the manner
20and form as required by the Department. This paragraph does not
21apply to leases of motor vehicles for which, at the time the
22lease is entered into, the term of the lease is not a defined
23period, including leases with a defined initial period with the
24option to continue the lease on a month-to-month or other basis
25beyond the initial defined period.
26    Notwithstanding any other provision of law, for any

 

 

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1tangible personal property that is sold on or after July 1,
22015 to a merchant who will act as lessor of that tangible
3personal property under a rental-purchase agreement, as
4defined in Section 1 of the Rental-Purchase Agreement Act,
5"selling price" or "amount of sale" means consideration
6received by the merchant pursuant to the rental-purchase
7agreement, including amounts due at signing and all monthly or
8other regular payments charged over the term of the agreement.
9The retailer who makes the retail sale of that property to the
10merchant is not required to collect the tax imposed by this Act
11or to pay the tax imposed by the Retailers' Occupation Tax Act
12on those amounts. The merchant assumes the liability for
13reporting, collecting, and remitting tax on the selling price
14directly to the Department in the same form and manner in which
15the retailer would have reported and paid such tax if the
16retailer had been required to pay the tax to the Department.
17The merchant must file the return and pay the tax to the
18Department by the due date otherwise required by this Act for
19returns other than transaction returns. A merchant who incurs a
20retailers' occupation tax liability on the sale of the tangible
21personal property at the end of the rental-purchase agreement
22may not take a credit against that liability for the use tax
23the merchant paid upon the purchase of the tangible personal
24property (or for any tax the merchant paid with respect to any
25amount received by the merchant from the consumer for the
26leased property that was not calculated at the time the

 

 

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1rental-purchase agreement was executed) if the selling price of
2the property at the time of purchase was calculated using the
3definition of "selling price" as defined in this paragraph;
4however, the merchant may file for a one-time credit with the
5Department for the use tax paid on and after July 1, 2014 and
6prior to July 1, 2015.
7    The phrase "like kind and character" shall be liberally
8construed (including but not limited to any form of motor
9vehicle for any form of motor vehicle, or any kind of farm or
10agricultural implement for any other kind of farm or
11agricultural implement), while not including a kind of item
12which, if sold at retail by that retailer, would be exempt from
13retailers' occupation tax and use tax as an isolated or
14occasional sale.
15    "Department" means the Department of Revenue.
16    "Person" means any natural individual, firm, partnership,
17association, joint stock company, joint adventure, public or
18private corporation, limited liability company, or a receiver,
19executor, trustee, guardian or other representative appointed
20by order of any court.
21    "Retailer" means and includes every person engaged in the
22business of making sales at retail as defined in this Section.
23    A person who holds himself or herself out as being engaged
24(or who habitually engages) in selling tangible personal
25property at retail is a retailer hereunder with respect to such
26sales (and not primarily in a service occupation)

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    activities in the state in which the retail business
2    engaging in such activities is located would constitute
3    maintaining a place of business in that state.
4    "Bulk vending machine" means a vending machine, containing
5unsorted confections, nuts, toys, or other items designed
6primarily to be used or played with by children which, when a
7coin or coins of a denomination not larger than $0.50 are
8inserted, are dispensed in equal portions, at random and
9without selection by the customer.
10(Source: P.A. 98-628, eff. 1-1-15; 98-1080, eff. 8-26-14;
1198-1089, eff. 1-1-15; revised 10-1-14.)
 
12    Section 10. The Retailers' Occupation Tax Act is amended by
13changing Section 1 as follows:
 
14    (35 ILCS 120/1)  (from Ch. 120, par. 440)
15    Sec. 1. Definitions. "Sale at retail" means any transfer of
16the ownership of or title to tangible personal property to a
17purchaser, for the purpose of use or consumption, and not for
18the purpose of resale in any form as tangible personal property
19to the extent not first subjected to a use for which it was
20purchased, for a valuable consideration: Provided that the
21property purchased is deemed to be purchased for the purpose of
22resale, despite first being used, to the extent to which it is
23resold as an ingredient of an intentionally produced product or
24byproduct of manufacturing. For this purpose, slag produced as

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1administered by the Department. Effective December 1, 1985,
2"selling price" shall include charges that are added to prices
3by sellers on account of the seller's tax liability under the
4Cigarette Tax Act, on account of the sellers' duty to collect,
5from the purchaser, the tax imposed under the Cigarette Use Tax
6Act, and on account of the seller's duty to collect, from the
7purchaser, any cigarette tax imposed by a home rule unit.
8    Notwithstanding any law to the contrary, for any motor
9vehicle, as defined in Section 1-146 of the Vehicle Code, that
10is sold on or after January 1, 2015 for the purpose of leasing
11the vehicle for a defined period that is longer than one year
12and (1) is a motor vehicle of the second division that: (A) is
13a self-contained motor vehicle designed or permanently
14converted to provide living quarters for recreational,
15camping, or travel use, with direct walk through access to the
16living quarters from the driver's seat; (B) is of the van
17configuration designed for the transportation of not less than
187 nor more than 16 passengers; or (C) has a gross vehicle
19weight rating of 8,000 pounds or less or (2) is a motor vehicle
20of the first division, "selling price" or "amount of sale"
21means the consideration received by the lessor pursuant to the
22lease contract, including amounts due at lease signing and all
23monthly or other regular payments charged over the term of the
24lease. Also included in the selling price is any amount
25received by the lessor from the lessee for the leased vehicle
26that is not calculated at the time the lease is executed,

 

 

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

 

 

09900SB0743sam001- 24 -LRB099 05718 HLH 31076 a

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

 

 

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1file all returns and make all payments required under this
2paragraph to the Department by electronic means in the manner
3and form as required by the Department. This paragraph does not
4apply to leases of motor vehicles for which, at the time the
5lease is entered into, the term of the lease is not a defined
6period, including leases with a defined initial period with the
7option to continue the lease on a month-to-month or other basis
8beyond the initial defined period.
9    Notwithstanding any other provision of law, for any
10tangible personal property that is sold on or after July 1,
112015 to a merchant who will act as lessor of that tangible
12personal property under a rental-purchase agreement, as
13defined in Section 1 of the Rental-Purchase Agreement Act,
14"selling price" or "amount of sale" means consideration
15received by the merchant pursuant to the rental-purchase
16agreement, including amounts due at signing and all monthly or
17other regular payments charged over the term of the agreement.
18The retailer who makes the retail sale of that property to the
19merchant is not required to collect the tax imposed by the Use
20Tax Act or to pay the tax imposed by this Act on those amounts.
21The merchant assumes the liability for reporting, collecting,
22and remitting tax on the selling price directly to the
23Department in the same form and manner in which the retailer
24would have reported and paid such tax if the retailer had been
25required to pay the tax to the Department. The merchant must
26file the return and pay the tax to the Department by the due

 

 

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1date otherwise required by this Act for returns other than
2transaction returns. A merchant who incurs a retailers'
3occupation tax liability on the sale of the tangible personal
4property at the end of the rental-purchase agreement may not
5take a credit against that liability for the use tax the
6merchant paid upon the purchase of the tangible personal
7property (or for any tax the merchant paid with respect to any
8amount received by the merchant from the consumer for the
9leased property that was not calculated at the time the
10rental-purchase agreement was executed) if the selling price of
11the property at the time of purchase was calculated using the
12definition of "selling price" as defined in this paragraph;
13however, the merchant may file for a one-time credit with the
14Department for the use tax paid on and after July 1, 2014 and
15prior to July 1, 2015.
16    The phrase "like kind and character" shall be liberally
17construed (including but not limited to any form of motor
18vehicle for any form of motor vehicle, or any kind of farm or
19agricultural implement for any other kind of farm or
20agricultural implement), while not including a kind of item
21which, if sold at retail by that retailer, would be exempt from
22retailers' occupation tax and use tax as an isolated or
23occasional sale.
24    "Gross receipts" from the sales of tangible personal
25property at retail means the total selling price or the amount
26of such sales, as hereinbefore defined. In the case of charge

 

 

09900SB0743sam001- 27 -LRB099 05718 HLH 31076 a

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

 

 

09900SB0743sam001- 28 -LRB099 05718 HLH 31076 a

1which it was purchased, and which does not become real estate
2or was not engineered and installed, under any provision of a
3construction contract or real estate sale or real estate sales
4agreement entered into with some other person arising out of or
5because of such nontaxable business, is engaged in the business
6of selling tangible personal property at retail to the extent
7of the value of the tangible personal property so transferred.
8If, in such a transaction, a separate charge is made for the
9tangible personal property so transferred, the value of such
10property, for the purpose of this Act, shall be the amount so
11separately charged, but not less than the cost of such property
12to the transferor; if no separate charge is made, the value of
13such property, for the purposes of this Act, is the cost to the
14transferor of such tangible personal property. Construction
15contracts for the improvement of real estate consisting of
16engineering, installation, and maintenance of voice, data,
17video, security, and all telecommunication systems do not
18constitute engaging in a business of selling tangible personal
19property at retail within the meaning of this Act if they are
20sold at one specified contract price.
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 person engaged in the business of
24selling tangible personal property at retail hereunder with
25respect to such sales (and not primarily in a service
26occupation) notwithstanding the fact that such person designs

 

 

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