State of Illinois
91st General Assembly

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 1        AN  ACT to amend the Telecommunications Excise Tax Act by
 2    changing Section 2.

 3        Be it enacted by the People of  the  State  of  Illinois,
 4    represented in the General Assembly:

 5        Section  5.   The  Telecommunications  Excise  Tax Act is
 6    amended by changing Section 2 as follows:

 7        (35 ILCS 630/2) (from Ch. 120, par. 2002)
 8        Sec. 2.  As used in  this  Article,  unless  the  context
 9    clearly requires otherwise:
10        (a)  "Gross  charge" means the amount paid for the act or
11    privilege of originating or receiving  telecommunications  in
12    this  State  and  for  all services and equipment provided in
13    connection therewith by a retailer, valued in  money  whether
14    paid in money or otherwise, including cash, credits, services
15    and property of every kind or nature, and shall be determined
16    without  any  deduction  on  account  of  the  cost  of  such
17    telecommunications,  the  cost  of  materials  used, labor or
18    service costs or  any  other  expense  whatsoever.   In  case
19    credit is extended, the amount thereof shall be included only
20    as  and  when  paid. "Gross charges" for private line service
21    shall include charges imposed at each  channel  point  within
22    this  State,  charges  for  the  channel mileage between each
23    channel point within this State, and charges for that portion
24    of  the  interstate  inter-office  channel  provided   within
25    Illinois. However, "gross charges" shall not include:
26             (1)  any amounts added to a purchaser's bill because
27        of  a charge made pursuant to (i) the tax imposed by this
28        Article; (ii) charges added to customers' bills  pursuant
29        to  the  provisions  of  Sections  9-221  or 9-222 of the
30        Public Utilities Act, as amended, or any similar  charges
31        added  to  customers'  bills  by  retailers  who  are not
                            -2-                LRB9103923PTpk
 1        subject to  rate  regulation  by  the  Illinois  Commerce
 2        Commission  for  the purpose of recovering any of the tax
 3        liabilities or other amounts specified in such provisions
 4        of such Act; or (iii) the tax imposed by Section 4251  of
 5        the Internal Revenue Code;
 6             (2)  charges  for  a  sent collect telecommunication
 7        received outside of the State;
 8             (3)  charges for leased time on equipment or charges
 9        for the storage of data  or  information  for  subsequent
10        retrieval  or  the  processing  of  data  or  information
11        intended  to  change its form or content.  Such equipment
12        includes, but is not limited to, the use of  calculators,
13        computers,    data   processing   equipment,   tabulating
14        equipment or accounting equipment and also  includes  the
15        usage of computers under a time-sharing agreement;
16             (4)  charges  for customer equipment, including such
17        equipment that is leased or rented by the  customer  from
18        any  source,  wherein  such charges are disaggregated and
19        separately identified from other charges;
20             (5)  charges to business enterprises certified under
21        Section 9-222.1 of the Public Utilities Act, as  amended,
22        to  the extent of such exemption and during the period of
23        time  specified  by  the  Department  of   Commerce   and
24        Community Affairs;
25             (6)  charges for telecommunications and all services
26        and  equipment provided in connection therewith between a
27        parent corporation and its wholly owned  subsidiaries  or
28        between  wholly  owned  subsidiaries when the tax imposed
29        under this Article has already been paid  to  a  retailer
30        and  only  to  the  extent  that  the charges between the
31        parent  corporation  and  wholly  owned  subsidiaries  or
32        between  wholly  owned  subsidiaries  represent   expense
33        allocation   between   the   corporations   and  not  the
34        generation of profit for the corporation  rendering  such
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 1        service;
 2             (7)  bad debts. Bad debt means any portion of a debt
 3        that  is  related  to  a  sale  at retail for which gross
 4        charges are not otherwise deductible or  excludable  that
 5        has  become  worthless  or  uncollectable,  as determined
 6        under applicable federal income tax  standards.   If  the
 7        portion  of  the  debt  deemed  to be bad is subsequently
 8        paid, the retailer shall report and pay the tax  on  that
 9        portion  during the reporting period in which the payment
10        is made;
11             (8)  charges   paid   by    inserting    coins    in
12        coin-operated telecommunication devices;
13             (9)  amounts  paid  by  telecommunications retailers
14        under  the  Telecommunications  Municipal  Infrastructure
15        Maintenance Fee Act;.
16             (10)  charges paid by a taxpayer who is receiving  a
17        grant  under  the  Senior  Citizens  and Disabled Persons
18        Property Tax Relief and Pharmaceutical Assistance Act  or
19        by the spouse of that taxpayer.
20        (b)  "Amount  paid"  means  the  amount  charged  to  the
21    taxpayer's  service address in this State regardless of where
22    such amount is billed or paid.
23        (c)  "Telecommunications", in  addition  to  the  meaning
24    ordinarily  and  popularly  ascribed to it, includes, without
25    limitation, messages or information transmitted  through  use
26    of  local, toll and wide area telephone service; private line
27    services;    channel    services;     telegraph     services;
28    teletypewriter;  computer  exchange services; cellular mobile
29    telecommunications   service;   specialized   mobile   radio;
30    stationary two way radio; paging service; or any  other  form
31    of  mobile and portable one-way or two-way communications; or
32    any  other  transmission  of  messages  or   information   by
33    electronic or similar means, between or among points by wire,
34    cable,  fiber-optics,  laser,  microwave, radio, satellite or
                            -4-                LRB9103923PTpk
 1    similar facilities. As used in this Act, "private line" means
 2    a  dedicated  non-traffic  sensitive  service  for  a  single
 3    customer, that entitles the customer to exclusive or priority
 4    use of a communications channel or group  of  channels,  from
 5    one  or  more  specified  locations  to  one  or  more  other
 6    specified  locations.  The definition of "telecommunications"
 7    shall not include value  added  services  in  which  computer
 8    processing applications are used to act on the form, content,
 9    code  and protocol of the information for purposes other than
10    transmission.   "Telecommunications"   shall   not    include
11    purchases   of  telecommunications  by  a  telecommunications
12    service provider for use as a component part of  the  service
13    provided   by   him  to  the  ultimate  retail  consumer  who
14    originates   or    terminates    the    taxable    end-to-end
15    communications.  Carrier  access  charges,  right  of  access
16    charges, charges for use of inter-company facilities, and all
17    telecommunications  resold  in  the  subsequent provision of,
18    used  as  a  component  of,  or  integrated  into  end-to-end
19    telecommunications service shall be non-taxable as sales  for
20    resale.
21        (d)  "Interstate     telecommunications"     means    all
22    telecommunications that either originate or terminate outside
23    this State.
24        (e)  "Intrastate    telecommunications"     means     all
25    telecommunications  that  originate and terminate within this
26    State.
27        (f)  "Department" means the Department of Revenue of  the
28    State of Illinois.
29        (g)  "Director"  means  the  Director  of Revenue for the
30    Department of Revenue of the State of Illinois.
31        (h)  "Taxpayer"  means  a  person  who  individually   or
32    through  his  agents,  employees or permittees engages in the
33    act   or    privilege    of    originating    or    receiving
34    telecommunications  in  this  State  and  who  incurs  a  tax
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 1    liability under this Article.
 2        (i)  "Person"  means any natural individual, firm, trust,
 3    estate, partnership, association, joint stock company,  joint
 4    venture,   corporation,   limited  liability  company,  or  a
 5    receiver, trustee, guardian or other representative appointed
 6    by order of any court, the  Federal  and  State  governments,
 7    including  State universities created by statute or any city,
 8    town, county or other political subdivision of this State.
 9        (j)  "Purchase  at   retail"   means   the   acquisition,
10    consumption  or  use  of  telecommunication through a sale at
11    retail.
12        (k)  "Sale at retail" means the  transmitting,  supplying
13    or  furnishing  of  telecommunications  and  all services and
14    equipment   provided   in   connection   therewith   for    a
15    consideration  to  persons  other  than the Federal and State
16    governments, and State universities created  by  statute  and
17    other  than between a parent corporation and its wholly owned
18    subsidiaries or between wholly owned subsidiaries  for  their
19    use or consumption and not for resale.
20        (l)  "Retailer"  means  and includes every person engaged
21    in the business of making sales at retail as defined in  this
22    Article.    The  Department  may,  in  its  discretion,  upon
23    application, authorize  the  collection  of  the  tax  hereby
24    imposed  by  any retailer not maintaining a place of business
25    within  this  State,  who,  to  the   satisfaction   of   the
26    Department,  furnishes adequate security to insure collection
27    and payment of the  tax.   Such  retailer  shall  be  issued,
28    without  charge,  a  permit  to  collect  such  tax.  When so
29    authorized, it shall be the duty of such retailer to  collect
30    the  tax upon all of the gross charges for telecommunications
31    in this State in the same manner  and  subject  to  the  same
32    requirements  as  a  retailer maintaining a place of business
33    within  this  State.   The  permit  may  be  revoked  by  the
34    Department at its discretion.
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 1        (m)  "Retailer maintaining a place of  business  in  this
 2    State",  or  any  like  term, means and includes any retailer
 3    having or maintaining within this State,  directly  or  by  a
 4    subsidiary,  an office, distribution facilities, transmission
 5    facilities,  sales  office,  warehouse  or  other  place   of
 6    business,  or  any  agent  or  other representative operating
 7    within this State under the authority of the retailer or  its
 8    subsidiary, irrespective of whether such place of business or
 9    agent  or other representative is located here permanently or
10    temporarily,  or  whether  such  retailer  or  subsidiary  is
11    licensed to do business in this State.
12        (n)  "Service   address"   means    the    location    of
13    telecommunications      equipment      from     which     the
14    telecommunications  services  are  originated  or  at   which
15    telecommunications  services  are received by a taxpayer.  In
16    the event this may not be a defined location, as in the  case
17    of   mobile   phones,   paging   systems,  maritime  systems,
18    air-to-ground systems and the  like,  service  address  shall
19    mean  the  location  of  a  taxpayer's  primary  use  of  the
20    telecommunications  equipment as defined by telephone number,
21    authorization code, or location in Illinois where  bills  are
22    sent.
23    (Source: P.A. 90-562, eff. 12-16-97.)

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