093_SB0227sam001

 










                                     LRB093 04616 SJM 14436 a

 1                    AMENDMENT TO SENATE BILL 227

 2        AMENDMENT NO.     .  Amend Senate Bill 227  by  replacing
 3    everything after the enacting clause with the following:

 4        "Section  5.  The  Cigarette Tax Act is amended by adding
 5    Section 3-2 as follows:

 6        (35 ILCS 130/3-2 new)
 7        Sec. 3-2. Credit voucher for bad debts.
 8        (a) Definitions. As used in this Section:
 9        "Bad debt" means the taxes attributable to any portion of
10    a debt that is related to a sale of cigarettes subject to tax
11    under  Section  2  that  is  not  otherwise   deductible   or
12    excludable  for any tax purpose, that has become worthless or
13    uncollectible within  60  days  after  the  delivery  of  the
14    cigarettes  that  are represented by a claim. "Bad debt" does
15    not  include  any  interest  on  the  wholesale  price  of  a
16    cigarette, uncollectible amounts on property that remains  in
17    the  possession  of  the  distributor until the full purchase
18    price is paid, expenses incurred in attempting to collect any
19    account receivable or any portion of the debt recovered,  any
20    accounts  receivable that have been sold to a third party for
21    collection, or repossessed property.
22        "Reasonable collection practices" means that at  least  3
 
                            -2-      LRB093 04616 SJM 14436 a
 1    attempts  are  made  to collect the debt within 60 days after
 2    the delivery of the cigarettes by providing  written  notices
 3    with  one  being mailed within 30 days after the delivery and
 4    another being mailed within 45  days  after  delivery,  which
 5    shall be mailed by certified mail.
 6        "Written   notice"  means  notice  in  writing  from  the
 7    distributor to the retailer which shall include  a  statement
 8    that  a portion of the collection is for that amount of taxes
 9    charged by the State and represented by the stamp.
10        "Person" means an actual  person  and  any  successor  or
11    related party.
12        (b) The Department is authorized to issue credit vouchers
13    for  bad debts to applicants meeting the requirements of this
14    Section. Beginning on January  1,  2004,  a  distributor  may
15    submit  an application to the Department for a credit voucher
16    in the amount of bad debts from the tax imposed under Section
17    2. The amount of the requested credit must be charged off  as
18    uncollectible within 3 years after the stamps were first sold
19    to  the  distributor.  Any  claim for a credit voucher in the
20    amount of bad debts from the tax imposed under Section  2  is
21    subject  to  this  statute  of  limitations  and shall not be
22    allowed after 3 years after the stamp is first  sold  to  the
23    distributor.
24        (c)  The amount of the credit voucher shall be determined
25    using the following as guidelines:
26             (1) What is the amount of  the  taxes  owed  to  the
27        distributor?
28             (2) Who owed the amount to the distributor?
29             (3) Is the amount owed greater than $50?
30             (4)  Has  the  distributor  received a credit in any
31        other years as a result of a bad debt from  this  person?
32        If  yes,  the distributor is not eligible for the voucher
33        provided under this Section.
34             (5) Is the claim for a credit voucher made within 30
 
                            -3-      LRB093 04616 SJM 14436 a
 1        days after the determination that the debt is a bad  debt
 2        as defined by this Section?
 3        (d) A credit voucher issued under this Section shall have
 4    an expiration date of not less than 45 days after issuance.
 5        (e)  A  claim for a credit voucher must be made within 30
 6    days after the determination that the debt is a bad  debt  as
 7    defined by this Section.
 8        (f) Any claim for a bad debt submitted under this Section
 9    must contain all of the following:
10             (1) A copy of the original invoice that must contain
11        the  distributor's legal name and address, as well as the
12        legal name of the retailer.
13             (2) The name of the person who  is  responsible  for
14        the bad debt.
15             (3)  Evidence  that  the cigarettes described in the
16        invoice and containing stamps were received by the person
17        who is responsible for the bad debt.
18             (4) Evidence that the person who is responsible  for
19        the  bad  debt  did  not  pay the distributor for the bad
20        debt.
21             (5) Evidence that the  distributor  used  reasonable
22        collection practices in efforts to collect the bad debt.
23             (6)  Evidence that the claim for a credit voucher is
24        made within 30 days after the determination that the debt
25        is a bad debt as defined by this Section.
26        (g) Recapture.
27             (1) A bad debt is reduced by any  amounts  collected
28        by  the  distributor  from the retailer within the 60-day
29        period with respect to such debt, regardless  of  whether
30        the   amounts   so   collected  are  attributable  to  or
31        designated by the parties or other law as collected  with
32        respect to the taxes imposed under Section 2.
33             (2)   Any   amount  subsequently  collected  by  the
34        distributor from the retailer with respect to a debt that
 
                            -4-      LRB093 04616 SJM 14436 a
 1        gave  rise  to  a  credit  voucher,  regardless  of   any
 2        designation of the parties or other law, shall be treated
 3        as reimbursement for the taxes imposed under Section 2.
 4             (3)  In  the case of a partially worthless debt, the
 5        amount of the debt attributable to  taxes  imposed  under
 6        Section  2  shall  be  treated to the extent possible, as
 7        attributable to the non-worthless portion of such debt.
 8        (h) Any person aggrieved by any action of the  Department
 9    under this Section may protest the action by making a written
10    request  for  a  hearing  within  60  days after the original
11    action. If the hearing is not requested in writing within  60
12    days, the original action is final.
13        (i)  An  application  for  a  credit  voucher  under this
14    Section must be signed by the claimant and verified.

15        Section 10. The Cigarette  Use  Tax  Act  is  amended  by
16    adding Section 3-2 as follows:

17        (35 ILCS 135/3-2 new)
18        Sec. 3-2. Credit voucher for bad debts.
19        (a) Definitions. As used in this Section:
20        "Bad debt" means the taxes attributable to any portion of
21    a debt that is related to a sale of cigarettes subject to tax
22    under   Section   2  that  is  not  otherwise  deductible  or
23    excludable for any tax purpose, that has become worthless  or
24    uncollectible  within  60  days  after  the  delivery  of the
25    cigarettes that are represented by a claim. "Bad  debt"  does
26    not  include  any  interest  on  the  wholesale  price  of  a
27    cigarette,  uncollectible amounts on property that remains in
28    the possession of the distributor  until  the  full  purchase
29    price is paid, expenses incurred in attempting to collect any
30    account  receivable or any portion of the debt recovered, any
31    accounts receivable that have been sold to a third party  for
32    collection, or repossessed property.
 
                            -5-      LRB093 04616 SJM 14436 a
 1        "Reasonable  collection  practices" means that at least 3
 2    attempts are made to collect the debt within  60  days  after
 3    the  delivery  of the cigarettes by providing written notices
 4    with one being mailed within 30 days after the  delivery  and
 5    another  being  mailed  within  45 days after delivery, which
 6    shall be mailed by certified mail.
 7        "Written  notice"  means  notice  in  writing  from   the
 8    distributor  to  the retailer which shall include a statement
 9    that a portion of the collection is for that amount of  taxes
10    charged by the State and represented by the stamp.
11        "Person"  means  an  actual  person  and any successor or
12    related party.
13        (b) The Department is authorized to issue credit vouchers
14    for bad debts to applicants meeting the requirements of  this
15    Section.  Beginning  on  January  1,  2004, a distributor may
16    submit an application to the Department for a credit  voucher
17    in the amount of bad debts from the tax imposed under Section
18    2.  The amount of the requested credit must be charged off as
19    uncollectible within 3 years after the stamps were first sold
20    to the distributor. Any claim for a  credit  voucher  in  the
21    amount  of  bad debts from the tax imposed under Section 2 is
22    subject to this statute  of  limitations  and  shall  not  be
23    allowed  after  3  years after the stamp is first sold to the
24    distributor.
25        (c) The amount of the credit voucher shall be  determined
26    using the following as guidelines:
27             (1)  What  is  the  amount  of the taxes owed to the
28        distributor?
29             (2) Who owed the amount to the distributor?
30             (3) Is the amount owed greater than $50?
31             (4) Has the distributor received  a  credit  in  any
32        other  years  as a result of a bad debt from this person?
33        If yes, the distributor is not eligible for  the  voucher
34        provided under this Section.
 
                            -6-      LRB093 04616 SJM 14436 a
 1             (5) Is the claim for a credit voucher made within 30
 2        days  after the determination that the debt is a bad debt
 3        as defined by this Section?
 4        (d) A credit voucher issued under this Section shall have
 5    an expiration date of not less than 45 days after issuance.
 6        (e) A claim for a credit voucher must be made  within  30
 7    days  after  the determination that the debt is a bad debt as
 8    defined by this Section.
 9        (f) Any claim for a bad debt submitted under this Section
10    must contain all of the following:
11             (1) A copy of the original invoice that must contain
12        the distributor's legal name and address, as well as  the
13        legal name of the retailer.
14             (2)  The  name  of the person who is responsible for
15        the bad debt.
16             (3) Evidence that the cigarettes  described  in  the
17        invoice and containing stamps were received by the person
18        who is responsible for the bad debt.
19             (4)  Evidence that the person who is responsible for
20        the bad debt did not pay  the  distributor  for  the  bad
21        debt.
22             (5)  Evidence  that  the distributor used reasonable
23        collection practices in efforts to collect the bad debt.
24             (6) Evidence that the claim for a credit voucher  is
25        made within 30 days after the determination that the debt
26        is a bad debt as defined by this Section.
27        (g) Recapture.
28             (1)  A  bad debt is reduced by any amounts collected
29        by the distributor from the retailer  within  the  60-day
30        period  with  respect to such debt, regardless of whether
31        the  amounts  so  collected  are   attributable   to   or
32        designated  by the parties or other law as collected with
33        respect to the taxes imposed under Section 2.
34             (2)  Any  amount  subsequently  collected   by   the
 
                            -7-      LRB093 04616 SJM 14436 a
 1        distributor from the retailer with respect to a debt that
 2        gave   rise  to  a  credit  voucher,  regardless  of  any
 3        designation of the parties or other law, shall be treated
 4        as reimbursement for the taxes imposed under Section 2.
 5             (3) In the case of a partially worthless  debt,  the
 6        amount  of  the  debt attributable to taxes imposed under
 7        Section 2 shall be treated to  the  extent  possible,  as
 8        attributable to the non-worthless portion of such debt.
 9        (h)  Any person aggrieved by any action of the Department
10    under this Section may protest the action by making a written
11    request for a hearing  within  60  days  after  the  original
12    action.  If the hearing is not requested in writing within 60
13    days, the original action is final.
14        (i) An  application  for  a  credit  voucher  under  this
15    Section must be signed by the claimant and verified.

16        Section  15.  The  Tobacco  Products  Tax  Act of 1995 is
17    amended by adding Section 10-32 as follows:

18        (35 ILCS 143/10-32 new)
19        Sec. 3-2. Credit voucher for bad debts.
20        (a) Definitions. As used in this Section:
21        "Bad debt" means the taxes attributable to any portion of
22    a debt that is related to a sale of cigarettes subject to tax
23    under Section 10-10  that  is  not  otherwise  deductible  or
24    excludable  for any tax purpose, that has become worthless or
25    uncollectible within  60  days  after  the  delivery  of  the
26    cigarettes  that  are represented by a claim. "Bad debt" does
27    not  include  any  interest  on  the  wholesale  price  of  a
28    cigarette, uncollectible amounts on property that remains  in
29    the  possession  of  the  distributor until the full purchase
30    price is paid, expenses incurred in attempting to collect any
31    account receivable or any portion of the debt recovered,  any
32    accounts  receivable that have been sold to a third party for
 
                            -8-      LRB093 04616 SJM 14436 a
 1    collection, or repossessed property.
 2        "Reasonable collection practices" means that at  least  3
 3    attempts  are  made  to collect the debt within 60 days after
 4    the delivery of the cigarettes by providing  written  notices
 5    with  one  being mailed within 30 days after the delivery and
 6    another being mailed within 45  days  after  delivery,  which
 7    shall be mailed by certified mail.
 8        "Written   notice"  means  notice  in  writing  from  the
 9    distributor to the retailer which shall include  a  statement
10    that  a portion of the collection is for that amount of taxes
11    charged by the State and represented by the stamp.
12        "Person" means an actual  person  and  any  successor  or
13    related party.
14        (b) The Department is authorized to issue credit vouchers
15    for  bad debts to applicants meeting the requirements of this
16    Section. Beginning on January  1,  2004,  a  distributor  may
17    submit  an application to the Department for a credit voucher
18    in the amount of bad debts from the tax imposed under Section
19    10-10. The amount of the requested credit must be charged off
20    as uncollectible within 3 years after the stamps  were  first
21    sold  to  the  distributor. Any claim for a credit voucher in
22    the amount of bad debts from the tax  imposed  under  Section
23    10-10 is subject to this statute of limitations and shall not
24    be allowed after 3 years after the stamp is first sold to the
25    distributor.
26        (c)  The amount of the credit voucher shall be determined
27    using the following as guidelines:
28             (1) What is the amount of  the  taxes  owed  to  the
29        distributor?
30             (2) Who owed the amount to the distributor?
31             (3) Is the amount owed greater than $50?
32             (4)  Has  the  distributor  received a credit in any
33        other years as a result of a bad debt from  this  person?
34        If  yes,  the distributor is not eligible for the voucher
 
                            -9-      LRB093 04616 SJM 14436 a
 1        provided under this Section.
 2             (5) Is the claim for a credit voucher made within 30
 3        days after the determination that the debt is a bad  debt
 4        as defined by this Section?
 5        (d) A credit voucher issued under this Section shall have
 6    an expiration date of not less than 45 days after issuance.
 7        (e)  A  claim for a credit voucher must be made within 30
 8    days after the determination that the debt is a bad  debt  as
 9    defined by this Section.
10        (f) Any claim for a bad debt submitted under this Section
11    must contain all of the following:
12             (1) A copy of the original invoice that must contain
13        the  distributor's legal name and address, as well as the
14        legal name of the retailer.
15             (2) The name of the person who  is  responsible  for
16        the bad debt.
17             (3)  Evidence  that  the cigarettes described in the
18        invoice and containing stamps were received by the person
19        who is responsible for the bad debt.
20             (4) Evidence that the person who is responsible  for
21        the  bad  debt  did  not  pay the distributor for the bad
22        debt.
23             (5) Evidence that the  distributor  used  reasonable
24        collection practices in efforts to collect the bad debt.
25             (6)  Evidence that the claim for a credit voucher is
26        made within 30 days after the determination that the debt
27        is a bad debt as defined by this Section.
28        (g) Recapture.
29             (1) A bad debt is reduced by any  amounts  collected
30        by  the  distributor  from the retailer within the 60-day
31        period with respect to such debt, regardless  of  whether
32        the   amounts   so   collected  are  attributable  to  or
33        designated by the parties or other law as collected  with
34        respect to the taxes imposed under Section 10-10.
 
                            -10-     LRB093 04616 SJM 14436 a
 1             (2)   Any   amount  subsequently  collected  by  the
 2        distributor from the retailer with respect to a debt that
 3        gave  rise  to  a  credit  voucher,  regardless  of   any
 4        designation of the parties or other law, shall be treated
 5        as  reimbursement  for  the  taxes  imposed under Section
 6        10-10.
 7             (3) In the case of a partially worthless  debt,  the
 8        amount  of  the  debt attributable to taxes imposed under
 9        Section 10-10 shall be treated to the extent possible, as
10        attributable to the non-worthless portion of such debt.
11        (h) Any person aggrieved by any action of the  Department
12    under this Section may protest the action by making a written
13    request  for  a  hearing  within  60  days after the original
14    action. If the hearing is not requested in writing within  60
15    days, the original action is final.
16        (i)  An  application  for  a  credit  voucher  under this
17    Section must be signed by the claimant and verified.

18        Section 99. Effective date. This Act  takes  effect  upon
19    becoming law.".