Illinois General Assembly - Full Text of HB3659
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Full Text of HB3659  96th General Assembly

HB3659enr 96TH GENERAL ASSEMBLY



 


 
HB3659 EnrolledLRB096 09388 RCE 19545 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. "Use" means the exercise by any person of any right
8or power over tangible personal property incident to the
9ownership of that property, except that it does not include the
10sale of such property in any form as tangible personal property
11in the regular course of business to the extent that such
12property is not first subjected to a use for which it was
13purchased, and does not include the use of such property by its
14owner for demonstration purposes: Provided that the property
15purchased is deemed to be purchased for the purpose of resale,
16despite first being used, to the extent to which it is resold
17as an ingredient of an intentionally produced product or
18by-product of manufacturing. "Use" does not mean the
19demonstration use or interim use of tangible personal property
20by a retailer before he sells that tangible personal property.
21For watercraft or aircraft, if the period of demonstration use
22or interim use by the retailer exceeds 18 months, the retailer
23shall pay on the retailers' original cost price the tax imposed

 

 

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1by this Act, and no credit for that tax is permitted if the
2watercraft or aircraft is subsequently sold by the retailer.
3"Use" does not mean the physical incorporation of tangible
4personal property, to the extent not first subjected to a use
5for which it was purchased, as an ingredient or constituent,
6into other tangible personal property (a) which is sold in the
7regular course of business or (b) which the person
8incorporating such ingredient or constituent therein has
9undertaken at the time of such purchase to cause to be
10transported in interstate commerce to destinations outside the
11State of Illinois: Provided that the property purchased is
12deemed to be purchased for the purpose of resale, despite first
13being used, to the extent to which it is resold as an
14ingredient of an intentionally produced product or by-product
15of 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    The phrase "like kind and character" shall be liberally
19construed (including but not limited to any form of motor
20vehicle for any form of motor vehicle, or any kind of farm or
21agricultural implement for any other kind of farm or
22agricultural implement), while not including a kind of item
23which, if sold at retail by that retailer, would be exempt from
24retailers' occupation tax and use tax as an isolated or
25occasional sale.
26    "Department" means the Department of Revenue.

 

 

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1    "Person" means any natural individual, firm, partnership,
2association, joint stock company, joint adventure, public or
3private corporation, limited liability company, or a receiver,
4executor, trustee, guardian or other representative appointed
5by order of any court.
6    "Retailer" means and includes every person engaged in the
7business of making sales at retail as defined in this Section.
8    A person who holds himself or herself out as being engaged
9(or who habitually engages) in selling tangible personal
10property at retail is a retailer hereunder with respect to such
11sales (and not primarily in a service occupation)
12notwithstanding the fact that such person designs and produces
13such tangible personal property on special order for the
14purchaser and in such a way as to render the property of value
15only to such purchaser, if such tangible personal property so
16produced on special order serves substantially the same
17function as stock or standard items of tangible personal
18property that are sold at retail.
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 a retailer with respect to such transactions, excepting only
24a person organized and operated exclusively for charitable,
25religious or educational purposes either (1), to the extent of
26sales by such person to its members, students, patients or

 

 

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1inmates of tangible personal property to be used primarily for
2the purposes of such person, or (2), to the extent of sales by
3such person of tangible personal property which is not sold or
4offered for sale by persons organized for profit. The selling
5of school books and school supplies by schools at retail to
6students is not "primarily for the purposes of" the school
7which does such selling. This paragraph does not apply to nor
8subject to taxation occasional dinners, social or similar
9activities of a person organized and operated exclusively for
10charitable, religious or educational purposes, whether or not
11such activities are open to the public.
12    A person who is the recipient of a grant or contract under
13Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
14serves meals to participants in the federal Nutrition Program
15for the Elderly in return for contributions established in
16amount by the individual participant pursuant to a schedule of
17suggested fees as provided for in the federal Act is not a
18retailer under this Act with respect to such transactions.
19    Persons who engage in the business of transferring tangible
20personal property upon the redemption of trading stamps are
21retailers hereunder when engaged in such business.
22    The isolated or occasional sale of tangible personal
23property at retail by a person who does not hold himself out as
24being engaged (or who does not habitually engage) in selling
25such tangible personal property at retail or a sale through a
26bulk vending machine does not make such person a retailer

 

 

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1hereunder. However, any person who is engaged in a business
2which is not subject to the tax imposed by the "Retailers'
3Occupation Tax Act" because of involving the sale of or a
4contract to sell real estate or a construction contract to
5improve real estate, but who, in the course of conducting such
6business, transfers tangible personal property to users or
7consumers in the finished form in which it was purchased, and
8which does not become real estate, under any provision of a
9construction contract or real estate sale or real estate sales
10agreement entered into with some other person arising out of or
11because of such nontaxable business, is a retailer to the
12extent of the value of the tangible personal property so
13transferred. If, in such transaction, a separate charge is made
14for the tangible personal property so transferred, the value of
15such property, for the purposes of this Act, is 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.
20    "Retailer maintaining a place of business in this State",
21or any like term, means and includes any of the following
22retailers:
23        1. A retailer having or maintaining within this State,
24    directly or by a subsidiary, an office, distribution house,
25    sales house, warehouse or other place of business, or any
26    agent or other representative operating within this State

 

 

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1    under the authority of the retailer or its subsidiary,
2    irrespective of whether such place of business or agent or
3    other representative is located here permanently or
4    temporarily, or whether such retailer or subsidiary is
5    licensed to do business in this State. However, the
6    ownership of property that is located at the premises of a
7    printer with which the retailer has contracted for printing
8    and that consists of the final printed product, property
9    that becomes a part of the final printed product, or copy
10    from which the printed product is produced shall not result
11    in the retailer being deemed to have or maintain an office,
12    distribution house, sales house, warehouse, or other place
13    of business within this State.
14        1.1. Beginning July 1, 2011, a retailer having a
15    contract with a person located in this State under which
16    the person, for a commission or other consideration based
17    upon the sale of tangible personal property by the
18    retailer, directly or indirectly refers potential
19    customers to the retailer by a link on the person's
20    Internet website. The provisions of this paragraph 1.1
21    shall apply only if the cumulative gross receipts from
22    sales of tangible personal property by the retailer to
23    customers who are referred to the retailer by all persons
24    in this State under such contracts exceed $10,000 during
25    the preceding 4 quarterly periods ending on the last day of
26    March, June, September, and December.

 

 

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

 

 

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

 

 

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1    "Bulk vending machine" means a vending machine, containing
2unsorted confections, nuts, toys, or other items designed
3primarily to be used or played with by children which, when a
4coin or coins of a denomination not larger than $0.50 are
5inserted, are dispensed in equal portions, at random and
6without selection by the customer.
7(Source: P.A. 94-1074, eff. 12-26-06; 95-723, eff. 6-23-08.)
 
8    Section 10. The Service Use Tax Act is amended by changing
9Section 2 as follows:
 
10    (35 ILCS 110/2)  (from Ch. 120, par. 439.32)
11    Sec. 2. "Use" means the exercise by any person of any right
12or power over tangible personal property incident to the
13ownership of that property, but does not include the sale or
14use for demonstration by him of that property in any form as
15tangible personal property in the regular course of business.
16"Use" does not mean the interim use of tangible personal
17property nor the physical incorporation of tangible personal
18property, as an ingredient or constituent, into other tangible
19personal property, (a) which is sold in the regular course of
20business or (b) which the person incorporating such ingredient
21or constituent therein has undertaken at the time of such
22purchase to cause to be transported in interstate commerce to
23destinations outside the State of Illinois.
24    "Purchased from a serviceman" means the acquisition of the

 

 

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1ownership of, or title to, tangible personal property through a
2sale of service.
3    "Purchaser" means any person who, through a sale of
4service, acquires the ownership of, or title to, any tangible
5personal property.
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 or her by his or her subcontractor
15is equal to 50% of the subcontractor's charges to the
16serviceman in the absence of proof of the consideration paid by
17the subcontractor for the purchase of such property.
18    "Selling price" means the consideration for a sale valued
19in money whether received in money or otherwise, including
20cash, credits and service, and shall be determined without any
21deduction on account of the serviceman's cost of the property
22sold, the cost of materials used, labor or service cost or any
23other expense whatsoever, but does not include interest or
24finance charges which appear as separate items on the bill of
25sale or sales contract nor charges that are added to prices by
26sellers on account of the seller's duty to collect, from the

 

 

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1purchaser, the tax that is imposed by this Act.
2    "Department" means the Department of Revenue.
3    "Person" means any natural individual, firm, partnership,
4association, joint stock company, joint venture, public or
5private corporation, limited liability company, and any
6receiver, executor, trustee, guardian or other representative
7appointed by order of any court.
8    "Sale of service" means any transaction except:
9        (1) a retail sale of tangible personal property taxable
10    under the Retailers' Occupation Tax Act or under the Use
11    Tax Act.
12        (2) a sale of tangible personal property for the
13    purpose of resale made in compliance with Section 2c of the
14    Retailers' Occupation Tax Act.
15        (3) except as hereinafter provided, a sale or transfer
16    of tangible personal property as an incident to the
17    rendering of service for or by any governmental body, or
18    for or by any corporation, society, association,
19    foundation or institution organized and operated
20    exclusively for charitable, religious or educational
21    purposes or any not-for-profit corporation, society,
22    association, foundation, institution or organization which
23    has no compensated officers or employees and which is
24    organized and operated primarily for the recreation of
25    persons 55 years of age or older. A limited liability
26    company may qualify for the exemption under this paragraph

 

 

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1    only if the limited liability company is organized and
2    operated exclusively for educational purposes.
3        (4) a sale or transfer of tangible personal property as
4    an incident to the rendering of service for interstate
5    carriers for hire for use as rolling stock moving in
6    interstate commerce or by lessors under a lease of one year
7    or longer, executed or in effect at the time of purchase of
8    personal property, to interstate carriers for hire for use
9    as rolling stock moving in interstate commerce so long as
10    so used by such interstate carriers for hire, and equipment
11    operated by a telecommunications provider, licensed as a
12    common carrier by the Federal Communications Commission,
13    which is permanently installed in or affixed to aircraft
14    moving in interstate commerce.
15        (4a) a sale or transfer of tangible personal property
16    as an incident to the rendering of service for owners,
17    lessors, or shippers of tangible personal property which is
18    utilized by interstate carriers for hire for use as rolling
19    stock moving in interstate commerce so long as so used by
20    interstate carriers for hire, and equipment operated by a
21    telecommunications provider, licensed as a common carrier
22    by the Federal Communications Commission, which is
23    permanently installed in or affixed to aircraft moving in
24    interstate commerce.
25        (4a-5) on and after July 1, 2003 and through June 30,
26    2004, a sale or transfer of a motor vehicle of the second

 

 

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

 

 

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1    by the manufacturer or some other person, or whether such
2    sale or lease is made apart from or as an incident to the
3    seller's engaging in a service occupation and the
4    applicable tax is a Service Use Tax or Service Occupation
5    Tax, rather than Use Tax or Retailers' Occupation Tax.
6        (5a) the repairing, reconditioning or remodeling, for
7    a common carrier by rail, of tangible personal property
8    which belongs to such carrier for hire, and as to which
9    such carrier receives the physical possession of the
10    repaired, reconditioned or remodeled item of tangible
11    personal property in Illinois, and which such carrier
12    transports, or shares with another common carrier in the
13    transportation of such property, out of Illinois on a
14    standard uniform bill of lading showing the person who
15    repaired, reconditioned or remodeled the property to a
16    destination outside Illinois, for use outside Illinois.
17        (5b) a sale or transfer of tangible personal property
18    which is produced by the seller thereof on special order in
19    such a way as to have made the applicable tax the Service
20    Occupation Tax or the Service Use Tax, rather than the
21    Retailers' Occupation Tax or the Use Tax, for an interstate
22    carrier by rail which receives the physical possession of
23    such property in Illinois, and which transports such
24    property, or shares with another common carrier in the
25    transportation of such property, out of Illinois on a
26    standard uniform bill of lading showing the seller of the

 

 

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1    property as the shipper or consignor of such property to a
2    destination outside Illinois, for use outside Illinois.
3        (6) until July 1, 2003, a sale or transfer of
4    distillation machinery and equipment, sold as a unit or kit
5    and assembled or installed by the retailer, which machinery
6    and equipment is certified by the user to be used only for
7    the production of ethyl alcohol that will be used for
8    consumption as motor fuel or as a component of motor fuel
9    for the personal use of such user and not subject to sale
10    or resale.
11        (7) at the election of any serviceman not required to
12    be otherwise registered as a retailer under Section 2a of
13    the Retailers' Occupation Tax Act, made for each fiscal
14    year sales of service in which the aggregate annual cost
15    price of tangible personal property transferred as an
16    incident to the sales of service is less than 35%, or 75%
17    in the case of servicemen transferring prescription drugs
18    or servicemen engaged in graphic arts production, of the
19    aggregate annual total gross receipts from all sales of
20    service. The purchase of such tangible personal property by
21    the serviceman shall be subject to tax under the Retailers'
22    Occupation Tax Act and the Use Tax Act. However, if a
23    primary serviceman who has made the election described in
24    this paragraph subcontracts service work to a secondary
25    serviceman who has also made the election described in this
26    paragraph, the primary serviceman does not incur a Use Tax

 

 

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1    liability if the secondary serviceman (i) has paid or will
2    pay Use Tax on his or her cost price of any tangible
3    personal property transferred to the primary serviceman
4    and (ii) certifies that fact in writing to the primary
5    serviceman.
6    Tangible personal property transferred incident to the
7completion of a maintenance agreement is exempt from the tax
8imposed pursuant to this Act.
9    Exemption (5) also includes machinery and equipment used in
10the general maintenance or repair of such exempt machinery and
11equipment or for in-house manufacture of exempt machinery and
12equipment. For the purposes of exemption (5), each of these
13terms shall have the following meanings: (1) "manufacturing
14process" shall mean the production of any article of tangible
15personal property, whether such article is a finished product
16or an article for use in the process of manufacturing or
17assembling a different article of tangible personal property,
18by procedures commonly regarded as manufacturing, processing,
19fabricating, or refining which changes some existing material
20or materials into a material with a different form, use or
21name. In relation to a recognized integrated business composed
22of a series of operations which collectively constitute
23manufacturing, or individually constitute manufacturing
24operations, the manufacturing process shall be deemed to
25commence with the first operation or stage of production in the
26series, and shall not be deemed to end until the completion of

 

 

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

 

 

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

 

 

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1number issued by the Department.
2    The purchase, employment and transfer of such tangible
3personal property as newsprint and ink for the primary purpose
4of conveying news (with or without other information) is not a
5purchase, use or sale of service or of tangible personal
6property within the meaning of this Act.
7    "Serviceman" means any person who is engaged in the
8occupation of making sales of service.
9    "Sale at retail" means "sale at retail" as defined in the
10Retailers' Occupation Tax Act.
11    "Supplier" means any person who makes sales of tangible
12personal property to servicemen for the purpose of resale as an
13incident to a sale of service.
14    "Serviceman maintaining a place of business in this State",
15or any like term, means and includes any serviceman:
16        1. having or maintaining within this State, directly or
17    by a subsidiary, an office, distribution house, sales
18    house, warehouse or other place of business, or any agent
19    or other representative operating within this State under
20    the authority of the serviceman or its subsidiary,
21    irrespective of whether such place of business or agent or
22    other representative is located here permanently or
23    temporarily, or whether such serviceman or subsidiary is
24    licensed to do business in this State;
25        1.1. beginning July 1, 2011, having a contract with a
26    person located in this State under which the person, for a

 

 

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1    commission or other consideration based on the sale of
2    service by the serviceman, directly or indirectly refers
3    potential customers to the serviceman by a link on the
4    person's Internet website. The provisions of this
5    paragraph 1.1 shall apply only if the cumulative gross
6    receipts from sales of service by the serviceman to
7    customers who are referred to the serviceman by all persons
8    in this State under such contracts exceed $10,000 during
9    the preceding 4 quarterly periods ending on the last day of
10    March, June, September, and December;
11        1.2. beginning July 1, 2011, having a contract with a
12    person located in this State under which:
13            A. the serviceman sells the same or substantially
14        similar line of services as the person located in this
15        State and does so using an identical or substantially
16        similar name, trade name, or trademark as the person
17        located in this State; and
18            B. the serviceman provides a commission or other
19        consideration to the person located in this State based
20        upon the sale of services by the serviceman.
21    The provisions of this paragraph 1.2 shall apply only if
22    the cumulative gross receipts from sales of service by the
23    serviceman to customers in this State under all such
24    contracts exceed $10,000 during the preceding 4 quarterly
25    periods ending on the last day of March, June, September,
26    and December;

 

 

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

 

 

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1    transmitted or distributed over a cable television system
2    in this State; or
3        8. engaging in activities in Illinois, which
4    activities in the state in which the supply business
5    engaging in such activities is located would constitute
6    maintaining a place of business in that state.
7(Source: P.A. 92-484, eff. 8-23-01; 93-23, eff. 6-20-03; 93-24,
8eff. 6-20-03; 93-1033, eff. 9-3-04.)
 
9    Section 97. Severability. The provisions of this Act are
10severable under Section 1.31 of the Statute on Statutes.
 
11    Section 99. Effective date. This Act takes effect upon
12becoming law.