Illinois General Assembly - Full Text of SB2668
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Full Text of SB2668  100th General Assembly


Sen. Dan McConchie

Filed: 4/20/2018





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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



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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
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    "Sale at retail" does not include the selling of food at
18retail to students, teachers, or staff at a school serving some
19or all of grades kindergarten through 12.
20    The purchase, employment and transfer of such tangible
21personal property as newsprint and ink for the primary purpose
22of conveying news (with or without other information) is not a
23purchase, use or sale of tangible personal property.
24    A person whose activities are organized and conducted
25primarily as a not-for-profit service enterprise, and who
26engages in selling tangible personal property at retail



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



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



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1provided with respect to any cigarette tax imposed by a home
2rule unit on account of the seller's duty to collect, from the
3purchasers, the tax that is imposed under any local use tax
4administered by the Department. Effective December 1, 1985,
5"selling price" shall include charges that are added to prices
6by sellers on account of the seller's tax liability under the
7Cigarette Tax Act, on account of the sellers' duty to collect,
8from the purchaser, the tax imposed under the Cigarette Use Tax
9Act, and on account of the seller's duty to collect, from the
10purchaser, any cigarette tax imposed by a home rule unit.
11    Notwithstanding any law to the contrary, for any motor
12vehicle, as defined in Section 1-146 of the Vehicle Code, that
13is sold on or after January 1, 2015 for the purpose of leasing
14the vehicle for a defined period that is longer than one year
15and (1) is a motor vehicle of the second division that: (A) is
16a self-contained motor vehicle designed or permanently
17converted to provide living quarters for recreational,
18camping, or travel use, with direct walk through access to the
19living quarters from the driver's seat; (B) is of the van
20configuration designed for the transportation of not less than
217 nor more than 16 passengers; or (C) has a gross vehicle
22weight rating of 8,000 pounds or less or (2) is a motor vehicle
23of the first division, "selling price" or "amount of sale"
24means the consideration received by the lessor pursuant to the
25lease contract, including amounts due at lease signing and all
26monthly or other regular payments charged over the term of the



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



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



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



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



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1of selling tangible personal property at retail to the extent
2of the value of the tangible personal property so transferred.
3If, in such a transaction, a separate charge is made for the
4tangible personal property so transferred, the value of such
5property, for the purpose of this Act, shall be the amount so
6separately charged, but not less than the cost of such property
7to the transferor; if no separate charge is made, the value of
8such property, for the purposes of this Act, is the cost to the
9transferor of such tangible personal property. Construction
10contracts for the improvement of real estate consisting of
11engineering, installation, and maintenance of voice, data,
12video, security, and all telecommunication systems do not
13constitute engaging in a business of selling tangible personal
14property at retail within the meaning of this Act if they are
15sold at one specified contract price.
16    A person who holds himself or herself out as being engaged
17(or who habitually engages) in selling tangible personal
18property at retail is a person engaged in the business of
19selling tangible personal property at retail hereunder with
20respect to such sales (and not primarily in a service
21occupation) notwithstanding the fact that such person designs
22and produces such tangible personal property on special order
23for the purchaser and in such a way as to render the property
24of value only to such purchaser, if such tangible personal
25property so produced on special order serves substantially the
26same function as stock or standard items of tangible personal



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