Illinois General Assembly - Full Text of SB2066
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Full Text of SB2066  102nd General Assembly

SB2066 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB2066

 

Introduced 2/26/2021, by Sen. Cristina Castro

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 120/1  from Ch. 120, par. 440

    Amends the Retailers' Occupation Tax Act. Provides that a "marketplace facilitator" does not include a person licensed under the Auction License Act, except for an Internet auction listing service, as defined in the Auction License Act.


LRB102 16579 HLH 21976 b

 

 

A BILL FOR

 

SB2066LRB102 16579 HLH 21976 b

1    AN ACT concerning local government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
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
8of the 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
11property to the extent not first subjected to a use for which
12it was purchased, for a valuable consideration: Provided that
13the property purchased is deemed to be purchased for the
14purpose of resale, despite first being used, to the extent to
15which it is resold as an ingredient of an intentionally
16produced product or byproduct of manufacturing. For this
17purpose, slag produced as an incident to manufacturing pig
18iron or steel and sold is considered to be an intentionally
19produced byproduct of manufacturing. Transactions whereby the
20possession of the property is transferred but the seller
21retains the title as security for payment of the selling price
22shall be deemed to be sales.
23    "Sale at retail" shall be construed to include any

 

 

SB2066- 2 -LRB102 16579 HLH 21976 b

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

 

 

SB2066- 3 -LRB102 16579 HLH 21976 b

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

 

 

SB2066- 4 -LRB102 16579 HLH 21976 b

1extent of sales by such person of tangible personal property
2which is not sold or offered for sale by persons organized for
3profit. The selling of school books and school supplies by
4schools at retail to students is not "primarily for the
5purposes of" the school which does such selling. The
6provisions of this paragraph shall not apply to nor subject to
7taxation occasional dinners, socials or similar activities of
8a person organized and operated exclusively for charitable,
9religious or educational purposes, whether or not such
10activities are open to the public.
11    A person who is the recipient of a grant or contract under
12Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
13serves meals to participants in the federal Nutrition Program
14for the Elderly in return for contributions established in
15amount by the individual participant pursuant to a schedule of
16suggested fees as provided for in the federal Act is not
17engaged in the business of selling tangible personal property
18at retail with respect to such transactions.
19    "Purchaser" means anyone who, through a sale at retail,
20acquires the ownership of or title to tangible personal
21property for a valuable consideration.
22    "Reseller of motor fuel" means any person engaged in the
23business of selling or delivering or transferring title of
24motor fuel to another person other than for use or
25consumption. No person shall act as a reseller of motor fuel
26within this State without first being registered as a reseller

 

 

SB2066- 5 -LRB102 16579 HLH 21976 b

1pursuant to Section 2c or a retailer pursuant to Section 2a.
2    "Selling price" or the "amount of sale" means the
3consideration for a sale valued in money whether received in
4money or otherwise, including cash, credits, property, other
5than as hereinafter provided, and services, but, prior to
6January 1, 2020, not including the value of or credit given for
7traded-in tangible personal property where the item that is
8traded-in is of like kind and character as that which is being
9sold; beginning January 1, 2020, "selling price" includes the
10portion of the value of or credit given for traded-in motor
11vehicles of the First Division as defined in Section 1-146 of
12the Illinois Vehicle Code of like kind and character as that
13which is being sold that exceeds $10,000. "Selling price"
14shall be determined without any deduction on account of the
15cost of the property sold, the cost of materials used, labor or
16service cost or any other expense whatsoever, but does not
17include charges that are added to prices by sellers on account
18of the seller's tax liability under this Act, or on account of
19the seller's duty to collect, from the purchaser, the tax that
20is imposed by the Use Tax Act, or, except as otherwise provided
21with respect to any cigarette tax imposed by a home rule unit,
22on account of the seller's tax liability under any local
23occupation tax administered by the Department, or, except as
24otherwise provided with respect to any cigarette tax imposed
25by a home rule unit on account of the seller's duty to collect,
26from the purchasers, the tax that is imposed under any local

 

 

SB2066- 6 -LRB102 16579 HLH 21976 b

1use tax administered by the Department. Effective December 1,
21985, "selling price" shall include charges that are added to
3prices by sellers on account of the seller's tax liability
4under the Cigarette Tax Act, on account of the sellers' duty to
5collect, from the purchaser, the tax imposed under the
6Cigarette Use Tax Act, and on account of the seller's duty to
7collect, from the purchaser, any cigarette tax imposed by a
8home rule unit.
9    Notwithstanding any law to the contrary, for any motor
10vehicle, as defined in Section 1-146 of the Vehicle Code, that
11is sold on or after January 1, 2015 for the purpose of leasing
12the vehicle for a defined period that is longer than one year
13and (1) is a motor vehicle of the second division that: (A) is
14a self-contained motor vehicle designed or permanently
15converted to provide living quarters for recreational,
16camping, or travel use, with direct walk through access to the
17living quarters from the driver's seat; (B) is of the van
18configuration designed for the transportation of not less than
197 nor more than 16 passengers; or (C) has a gross vehicle
20weight rating of 8,000 pounds or less or (2) is a motor vehicle
21of the first division, "selling price" or "amount of sale"
22means the consideration received by the lessor pursuant to the
23lease contract, including amounts due at lease signing and all
24monthly or other regular payments charged over the term of the
25lease. Also included in the selling price is any amount
26received by the lessor from the lessee for the leased vehicle

 

 

SB2066- 7 -LRB102 16579 HLH 21976 b

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

 

 

SB2066- 8 -LRB102 16579 HLH 21976 b

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

 

 

SB2066- 9 -LRB102 16579 HLH 21976 b

1Act to the contrary, lessors shall file all returns and make
2all payments required under this paragraph to the Department
3by electronic means in the manner and form as required by the
4Department. This paragraph does not apply to leases of motor
5vehicles for which, at the time the lease is entered into, the
6term of the lease is not a defined period, including leases
7with a defined initial period with the option to continue the
8lease on a month-to-month or other basis beyond the initial
9defined 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
23other consideration derived by a seller from the sale,
24transfer or assignment of accounts receivable to a wholly
25owned subsidiary will not be deemed payments prior to the time
26the purchaser makes payment on such accounts.

 

 

SB2066- 10 -LRB102 16579 HLH 21976 b

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
21in which it was purchased, and which does not become real
22estate or was not engineered and installed, under any
23provision of a construction contract or real estate sale or
24real estate sales agreement entered into with some other
25person arising out of or because of such nontaxable business,
26is engaged in the business of selling tangible personal

 

 

SB2066- 11 -LRB102 16579 HLH 21976 b

1property at retail to the extent of the value of the tangible
2personal property so transferred. If, in such a transaction, a
3separate charge is made for the tangible personal property so
4transferred, the value of such property, for the purpose of
5this Act, shall be the amount so separately charged, but not
6less than the cost of such property to the transferor; if no
7separate charge is made, the value of such property, for the
8purposes of this Act, is the cost to the transferor of such
9tangible personal property. Construction contracts for the
10improvement of real estate consisting of engineering,
11installation, and maintenance of voice, data, video, security,
12and all telecommunication systems do not constitute engaging
13in a business of selling tangible personal property at retail
14within the meaning of this Act if they are sold at one
15specified 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

 

 

SB2066- 12 -LRB102 16579 HLH 21976 b

1property that are sold at retail.
2    Persons who engage in the business of transferring
3tangible personal property upon the redemption of trading
4stamps are engaged in the business of selling such property at
5retail and shall be liable for and shall pay the tax imposed by
6this Act on the basis of the retail value of the property
7transferred upon 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    "Remote retailer" means a retailer that does not maintain
15within this State, directly or by a subsidiary, an office,
16distribution house, sales house, warehouse or other place of
17business, or any agent or other representative operating
18within this State under the authority of the retailer or its
19subsidiary, irrespective of whether such place of business or
20agent is located here permanently or temporarily or whether
21such retailer or subsidiary is licensed to do business in this
22State.
23    "Marketplace" means a physical or electronic place, forum,
24platform, application, or other method by which a marketplace
25seller sells or offers to sell items.
26    "Marketplace facilitator" means a person who, pursuant to

 

 

SB2066- 13 -LRB102 16579 HLH 21976 b

1an agreement with an unrelated third-party marketplace seller,
2directly or indirectly through one or more affiliates
3facilitates a retail sale by an unrelated third party
4marketplace seller by:
5        (1) listing or advertising for sale by the marketplace
6    seller in a marketplace, tangible personal property that
7    is subject to tax under this Act; and
8        (2) either directly or indirectly, through agreements
9    or arrangements with third parties, collecting payment
10    from the customer and transmitting that payment to the
11    marketplace seller regardless of whether the marketplace
12    facilitator receives compensation or other consideration
13    in exchange for its services.
14    A person who provides advertising services, including
15listing products for sale, is not considered a marketplace
16facilitator, so long as the advertising service platform or
17forum does not engage, directly or indirectly through one or
18more affiliated persons, in the activities described in
19paragraph (2) of this definition of "marketplace facilitator".
20    "Marketplace facilitator" does not include a person
21licensed under the Auction License Act. This exception does
22not include an Internet auction listing service, as defined in
23Section 5-10 of the Auction License Act.
24    "Marketplace seller" means a person that makes sales
25through a marketplace operated by an unrelated third party
26marketplace facilitator.

 

 

SB2066- 14 -LRB102 16579 HLH 21976 b

1(Source: P.A. 101-31, eff. 6-28-19; 101-604, eff. 1-1-20.)