Illinois General Assembly - Full Text of SB2668
Illinois General Assembly

Previous General Assemblies

Full Text of SB2668  100th General Assembly


Sen. Dan McConchie

Filed: 4/13/2018





10000SB2668sam001LRB100 17737 HLH 38221 a


2    AMENDMENT NO. ______. Amend Senate Bill 2668 by replacing
3everything after the enacting clause with the following:
4    "Section 5. The Retailers' Occupation Tax Act is amended by
5changing Section 1 as follows:
6    (35 ILCS 120/1)  (from Ch. 120, par. 440)
7    Sec. 1. Definitions. "Sale at retail" means any transfer of
8the ownership of or title to tangible personal property to a
9purchaser, for the purpose of use or consumption, and not for
10the purpose of resale in any form as tangible personal property
11to the extent not first subjected to a use for which it was
12purchased, for a valuable consideration: Provided that the
13property purchased is deemed to be purchased for the purpose of
14resale, despite first being used, to the extent to which it is
15resold as an ingredient of an intentionally produced product or
16byproduct of manufacturing. For this purpose, slag produced as



10000SB2668sam001- 2 -LRB100 17737 HLH 38221 a

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
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



10000SB2668sam001- 3 -LRB100 17737 HLH 38221 a

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    "Sale at retail" does not include the selling of food at
18retail at schools to students, teachers, or staff.
19    The purchase, employment and transfer of such tangible
20personal property as newsprint and ink for the primary purpose
21of conveying news (with or without other information) is not a
22purchase, use or sale of tangible personal property.
23    A person whose activities are organized and conducted
24primarily as a not-for-profit service enterprise, and who
25engages in selling tangible personal property at retail
26(whether to the public or merely to members and their guests)



10000SB2668sam001- 4 -LRB100 17737 HLH 38221 a

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



10000SB2668sam001- 5 -LRB100 17737 HLH 38221 a

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



10000SB2668sam001- 6 -LRB100 17737 HLH 38221 a

1rule unit on account of the seller's duty to collect, from the
2purchasers, the tax that is imposed under any local use tax
3administered by the Department. Effective December 1, 1985,
4"selling price" shall include charges that are added to prices
5by sellers on account of the seller's tax liability under the
6Cigarette Tax Act, on account of the sellers' duty to collect,
7from the purchaser, the tax imposed under the Cigarette Use Tax
8Act, and on account of the seller's duty to collect, from the
9purchaser, any cigarette tax imposed by a home rule unit.
10    Notwithstanding any law to the contrary, for any motor
11vehicle, as defined in Section 1-146 of the Vehicle Code, that
12is sold on or after January 1, 2015 for the purpose of leasing
13the vehicle for a defined period that is longer than one year
14and (1) is a motor vehicle of the second division that: (A) is
15a self-contained motor vehicle designed or permanently
16converted to provide living quarters for recreational,
17camping, or travel use, with direct walk through access to the
18living quarters from the driver's seat; (B) is of the van
19configuration designed for the transportation of not less than
207 nor more than 16 passengers; or (C) has a gross vehicle
21weight rating of 8,000 pounds or less or (2) is a motor vehicle
22of the first division, "selling price" or "amount of sale"
23means the consideration received by the lessor pursuant to the
24lease contract, including amounts due at lease signing and all
25monthly or other regular payments charged over the term of the
26lease. Also included in the selling price is any amount



10000SB2668sam001- 7 -LRB100 17737 HLH 38221 a

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



10000SB2668sam001- 8 -LRB100 17737 HLH 38221 a

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



10000SB2668sam001- 9 -LRB100 17737 HLH 38221 a

1any other provision of this Act to the contrary, lessors shall
2file all returns and make all payments required under this
3paragraph to the Department by electronic means in the manner
4and form as required by the Department. This paragraph does not
5apply to leases of motor vehicles for which, at the time the
6lease is entered into, the term of the lease is not a defined
7period, including leases with a defined initial period with the
8option to continue the lease on a month-to-month or other basis
9beyond the initial defined period.
10    The phrase "like kind and character" shall be liberally
11construed (including but not limited to any form of motor
12vehicle for any form of motor vehicle, or any kind of farm or
13agricultural implement for any other kind of farm or
14agricultural implement), while not including a kind of item
15which, if sold at retail by that retailer, would be exempt from
16retailers' occupation tax and use tax as an isolated or
17occasional sale.
18    "Gross receipts" from the sales of tangible personal
19property at retail means the total selling price or the amount
20of such sales, as hereinbefore defined. In the case of charge
21and time sales, the amount thereof shall be included only as
22and when payments are received by the seller. Receipts or other
23consideration derived by a seller from the sale, transfer or
24assignment of accounts receivable to a wholly owned subsidiary
25will not be deemed payments prior to the time the purchaser
26makes payment on such accounts.



10000SB2668sam001- 10 -LRB100 17737 HLH 38221 a

1    "Department" means the Department of Revenue.
2    "Person" means any natural individual, firm, partnership,
3association, joint stock company, joint adventure, public or
4private corporation, limited liability company, or a receiver,
5executor, trustee, guardian or other representative appointed
6by order of any court.
7    The isolated or occasional sale of tangible personal
8property at retail by a person who does not hold himself out as
9being engaged (or who does not habitually engage) in selling
10such tangible personal property at retail, or a sale through a
11bulk vending machine, does not constitute engaging in a
12business of selling such tangible personal property at retail
13within the meaning of this Act; provided that any person who is
14engaged in a business which is not subject to the tax imposed
15by this Act because of involving the sale of or a contract to
16sell real estate or a construction contract to improve real
17estate or a construction contract to engineer, install, and
18maintain an integrated system of products, but who, in the
19course of conducting such business, transfers tangible
20personal property to users or consumers in the finished form in
21which it was purchased, and which does not become real estate
22or was not engineered and installed, under any provision of a
23construction contract or real estate sale or real estate sales
24agreement entered into with some other person arising out of or
25because of such nontaxable business, is engaged in the business
26of selling tangible personal property at retail to the extent



10000SB2668sam001- 11 -LRB100 17737 HLH 38221 a

1of the value of the tangible personal property so transferred.
2If, in such a transaction, a separate charge is made for the
3tangible personal property so transferred, the value of such
4property, for the purpose of this Act, shall be 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. Construction
9contracts for the improvement of real estate consisting of
10engineering, installation, and maintenance of voice, data,
11video, security, and all telecommunication systems do not
12constitute engaging in a business of selling tangible personal
13property at retail within the meaning of this Act if they are
14sold at one specified contract price.
15    A person who holds himself or herself out as being engaged
16(or who habitually engages) in selling tangible personal
17property at retail is a person engaged in the business of
18selling tangible personal property at retail hereunder with
19respect to such sales (and not primarily in a service
20occupation) notwithstanding the fact that such person designs
21and produces such tangible personal property on special order
22for the purchaser and in such a way as to render the property
23of value only to such purchaser, if such tangible personal
24property so produced on special order serves substantially the
25same function as stock or standard items of tangible personal
26property that are sold at retail.



10000SB2668sam001- 12 -LRB100 17737 HLH 38221 a

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