State of Illinois
92nd General Assembly
Legislation

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[ Introduced ][ Engrossed ][ Senate Amendment 001 ]
[ Senate Amendment 002 ]


92_HB1273enr

 
HB1273 Enrolled                                LRB9203256SMdv

 1        AN ACT in relation to taxes.

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

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

 6        (35 ILCS 630/2) (from Ch. 120, par. 2002)
 7        Sec.  2.   As  used  in  this Article, unless the context
 8    clearly requires otherwise:
 9        (a)  "Gross charge" means the amount paid for the act  or
10    privilege  of  originating or receiving telecommunications in
11    this State and for all services  and  equipment  provided  in
12    connection  therewith  by a retailer, valued in money whether
13    paid in money or otherwise, including cash, credits, services
14    and property of every kind or nature, and shall be determined
15    without  any  deduction  on  account  of  the  cost  of  such
16    telecommunications, the cost  of  materials  used,  labor  or
17    service  costs  or  any  other  expense  whatsoever.  In case
18    credit is extended, the amount thereof shall be included only
19    as and when paid. "Gross charges" for  private  line  service
20    shall  include  charges  imposed at each channel point within
21    this State, charges for  the  channel  mileage  between  each
22    channel point within this State, and charges for that portion
23    of   the  interstate  inter-office  channel  provided  within
24    Illinois.  Charges  for  that  portion  of   the   interstate
25    inter-office channel provided in Illinois shall be determined
26    by  the retailer as follows:  (i) for interstate inter-office
27    channels having 2 channel termination  points,  only  one  of
28    which  is  in Illinois, 50% of the total charge imposed; (ii)
29    for interstate  inter-office  channels  having  more  than  2
30    channel  termination  points,  one  or  more  of which are in
31    Illinois, an amount equal to the total charge multiplied by a
 
HB1273 Enrolled            -2-                 LRB9203256SMdv
 1    fraction, the numerator of which is  the  number  of  channel
 2    termination  points  within  Illinois  and the denominator of
 3    which is the total number of channel termination  points;  or
 4    (iii)  any  other method that reasonably apportions the total
 5    charges for interstate inter-office channels among the states
 6    in which channel termination points  are  located.  Prior  to
 7    June  1,  2003, any apportionment method consistent with this
 8    paragraph  shall  be  accepted  as  a  reasonable  method  to
 9    determine the charges for  that  portion  of  the  interstate
10    inter-office   channel  provided  within  Illinois  for  that
11    period.  However, "gross charges" shall not  include  any  of
12    the following:
13             (1)  Any amounts added to a purchaser's bill because
14        of  a charge made pursuant to (i) the tax imposed by this
15        Article; (ii) charges added to customers' bills  pursuant
16        to  the  provisions  of  Sections  9-221  or 9-222 of the
17        Public Utilities Act, as amended, or any similar  charges
18        added  to  customers'  bills  by  retailers  who  are not
19        subject to  rate  regulation  by  the  Illinois  Commerce
20        Commission  for  the purpose of recovering any of the tax
21        liabilities or other amounts specified in such provisions
22        of such Act; (iii) the tax imposed by Section 4251 of the
23        Internal Revenue Code; (iv) 911 surcharges;  or  (v)  the
24        tax     imposed     by     the    Simplified    Municipal
25        Telecommunications Tax Act.;
26             (2)  Charges for a  sent  collect  telecommunication
27        received outside of the State.;
28             (3)  Charges for leased time on equipment or charges
29        for  the  storage  of  data or information for subsequent
30        retrieval  or  the  processing  of  data  or  information
31        intended to change its form or content.   Such  equipment
32        includes,  but is not limited to, the use of calculators,
33        computers,   data   processing   equipment,    tabulating
34        equipment  or  accounting equipment and also includes the
 
HB1273 Enrolled            -3-                 LRB9203256SMdv
 1        usage of computers under a time-sharing agreement.;
 2             (4)  Charges for customer equipment, including  such
 3        equipment  that  is leased or rented by the customer from
 4        any source, wherein such charges  are  disaggregated  and
 5        separately identified from other charges.;
 6             (5)  Charges to business enterprises certified under
 7        Section  9-222.1 of the Public Utilities Act, as amended,
 8        to the extent of such exemption and during the period  of
 9        time   specified   by  the  Department  of  Commerce  and
10        Community Affairs.;
11             (6)  Charges for telecommunications and all services
12        and equipment provided in connection therewith between  a
13        parent  corporation  and its wholly owned subsidiaries or
14        between wholly owned subsidiaries when  the  tax  imposed
15        under  this  Article  has already been paid to a retailer
16        and only to the  extent  that  the  charges  between  the
17        parent  corporation  and  wholly  owned  subsidiaries  or
18        between   wholly  owned  subsidiaries  represent  expense
19        allocation  between  the   corporations   and   not   the
20        generation  of  profit for the corporation rendering such
21        service.;
22             (7)  Bad debts. Bad debt means any portion of a debt
23        that is related to a  sale  at  retail  for  which  gross
24        charges  are  not otherwise deductible or excludable that
25        has become  worthless  or  uncollectable,  as  determined
26        under  applicable  federal  income tax standards.  If the
27        portion of the debt deemed  to  be  bad  is  subsequently
28        paid,  the  retailer shall report and pay the tax on that
29        portion during the reporting period in which the  payment
30        is made.;
31             (8)  Charges    paid    by    inserting   coins   in
32        coin-operated telecommunication devices.;
33             (9)  Amounts paid  by  telecommunications  retailers
34        under  the  Telecommunications  Municipal  Infrastructure
 
HB1273 Enrolled            -4-                 LRB9203256SMdv
 1        Maintenance Fee Act.
 2             (10)  Charges    for    nontaxable    services    or
 3        telecommunications  if  (i)  those charges are aggregated
 4        with  other  charges  for  telecommunications  that   are
 5        taxable,  (ii) those charges are not separately stated on
 6        the customer bill or invoice, and (iii) the retailer  can
 7        reasonably   identify   the  nontaxable  charges  on  the
 8        retailer's books and records kept in the  regular  course
 9        of  business. If the nontaxable charges cannot reasonably
10        be identified, the gross charge from  the  sale  of  both
11        taxable  and  nontaxable  services  or telecommunications
12        billed on a combined basis shall  be  attributed  to  the
13        taxable  services  or  telecommunications.  The burden of
14        proving nontaxable charges shall be on  the  retailer  of
15        the telecommunications.
16        (b)  "Amount  paid"  means  the  amount  charged  to  the
17    taxpayer's  service address in this State regardless of where
18    such amount is billed or paid.
19        (c)  "Telecommunications", in  addition  to  the  meaning
20    ordinarily  and  popularly  ascribed to it, includes, without
21    limitation, messages or information transmitted  through  use
22    of  local, toll and wide area telephone service; private line
23    services;    channel    services;     telegraph     services;
24    teletypewriter;  computer  exchange services; cellular mobile
25    telecommunications   service;   specialized   mobile   radio;
26    stationary two way radio; paging service; or any  other  form
27    of  mobile and portable one-way or two-way communications; or
28    any  other  transmission  of  messages  or   information   by
29    electronic or similar means, between or among points by wire,
30    cable,  fiber-optics,  laser,  microwave, radio, satellite or
31    similar facilities.  As used  in  this  Act,  "private  line"
32    means  a dedicated non-traffic sensitive service for a single
33    customer, that entitles the customer to exclusive or priority
34    use of a communications channel or group  of  channels,  from
 
HB1273 Enrolled            -5-                 LRB9203256SMdv
 1    one  or  more  specified  locations  to  one  or  more  other
 2    specified  locations.  The definition of "telecommunications"
 3    shall not include value  added  services  in  which  computer
 4    processing applications are used to act on the form, content,
 5    code  and protocol of the information for purposes other than
 6    transmission.    "Telecommunications"   shall   not   include
 7    purchases  of  telecommunications  by  a   telecommunications
 8    service  provider  for use as a component part of the service
 9    provided  by  him  to  the  ultimate  retail   consumer   who
10    originates    or    terminates    the    taxable   end-to-end
11    communications.  Carrier  access  charges,  right  of  access
12    charges, charges for use of inter-company facilities, and all
13    telecommunications  resold  in  the  subsequent provision of,
14    used  as  a  component  of,  or  integrated  into  end-to-end
15    telecommunications service shall be non-taxable as sales  for
16    resale.
17        (d)  "Interstate     telecommunications"     means    all
18    telecommunications that either originate or terminate outside
19    this State.
20        (e)  "Intrastate    telecommunications"     means     all
21    telecommunications  that  originate and terminate within this
22    State.
23        (f)  "Department" means the Department of Revenue of  the
24    State of Illinois.
25        (g)  "Director"  means  the  Director  of Revenue for the
26    Department of Revenue of the State of Illinois.
27        (h)  "Taxpayer"  means  a  person  who  individually   or
28    through  his  agents,  employees or permittees engages in the
29    act   or    privilege    of    originating    or    receiving
30    telecommunications  in  this  State  and  who  incurs  a  tax
31    liability under this Article.
32        (i)  "Person"  means any natural individual, firm, trust,
33    estate, partnership, association, joint stock company,  joint
34    venture,   corporation,   limited  liability  company,  or  a
 
HB1273 Enrolled            -6-                 LRB9203256SMdv
 1    receiver, trustee, guardian or other representative appointed
 2    by order of any court, the  Federal  and  State  governments,
 3    including  State universities created by statute or any city,
 4    town, county or other political subdivision of this State.
 5        (j)  "Purchase  at   retail"   means   the   acquisition,
 6    consumption  or  use  of  telecommunication through a sale at
 7    retail.
 8        (k)  "Sale at retail" means the  transmitting,  supplying
 9    or  furnishing  of  telecommunications  and  all services and
10    equipment   provided   in   connection   therewith   for    a
11    consideration  to  persons  other  than the Federal and State
12    governments, and State universities created  by  statute  and
13    other  than between a parent corporation and its wholly owned
14    subsidiaries or between wholly owned subsidiaries  for  their
15    use or consumption and not for resale.
16        (l)  "Retailer"  means  and includes every person engaged
17    in the business of making sales at retail as defined in  this
18    Article.    The  Department  may,  in  its  discretion,  upon
19    application, authorize  the  collection  of  the  tax  hereby
20    imposed  by  any retailer not maintaining a place of business
21    within  this  State,  who,  to  the   satisfaction   of   the
22    Department,  furnishes adequate security to insure collection
23    and payment of the  tax.   Such  retailer  shall  be  issued,
24    without  charge,  a  permit  to  collect  such  tax.  When so
25    authorized, it shall be the duty of such retailer to  collect
26    the  tax upon all of the gross charges for telecommunications
27    in this State in the same manner  and  subject  to  the  same
28    requirements  as  a  retailer maintaining a place of business
29    within  this  State.   The  permit  may  be  revoked  by  the
30    Department at its discretion.
31        (m)  "Retailer maintaining a place of  business  in  this
32    State",  or  any  like  term, means and includes any retailer
33    having or maintaining within this State,  directly  or  by  a
34    subsidiary,  an office, distribution facilities, transmission
 
HB1273 Enrolled            -7-                 LRB9203256SMdv
 1    facilities,  sales  office,  warehouse  or  other  place   of
 2    business,  or  any  agent  or  other representative operating
 3    within this State under the authority of the retailer or  its
 4    subsidiary, irrespective of whether such place of business or
 5    agent  or other representative is located here permanently or
 6    temporarily,  or  whether  such  retailer  or  subsidiary  is
 7    licensed to do business in this State.
 8        (n)  "Service   address"   means    the    location    of
 9    telecommunications       equipment     from     which     the
10    telecommunications  services  are  originated  or  at   which
11    telecommunications  services  are received by a taxpayer.  In
12    the event this may not be a defined location, as in the  case
13    of  mobile  phones, paging systems, maritime systems, service
14    address means the customer's place of primary use as  defined
15    in  the  Mobile  Telecommunications  Sourcing Conformity Act.
16    For air-to-ground systems and the like, service address shall
17    mean  the  location  of  a  taxpayer's  primary  use  of  the
18    telecommunications equipment as defined by telephone  number,
19    authorization  code,  or location in Illinois where bills are
20    sent.
21        (o)  "Prepaid telephone calling  arrangements"  mean  the
22    right to exclusively purchase telephone or telecommunications
23    services  that  must  be  paid  for in advance and enable the
24    origination  of  one  or  more  intrastate,  interstate,   or
25    international  telephone  calls  or  other telecommunications
26    using an access  number,  an  authorization  code,  or  both,
27    whether  manually or electronically dialed, for which payment
28    to a retailer must be made in advance, provided that,  unless
29    recharged,  no  further service is provided once that prepaid
30    amount of  service  has  been  consumed.   Prepaid  telephone
31    calling  arrangements  include  the  recharge  of  a  prepaid
32    calling   arrangement.   For  purposes  of  this  subsection,
33    "recharge" means the purchase of additional prepaid telephone
34    or telecommunications services whether or not  the  purchaser
 
HB1273 Enrolled            -8-                 LRB9203256SMdv
 1    acquires  a  different  access  number or authorization code.
 2    "Prepaid telephone calling arrangement" does not  include  an
 3    arrangement  whereby  a customer purchases a payment card and
 4    pursuant to which the service provider reflects the amount of
 5    such purchase as a  credit  on  an  invoice  issued  to  that
 6    customer under an existing subscription plan.
 7    (Source:  P.A.  91-870,  eff.  6-22-00;  92-474, eff. 8-1-02;
 8    92-526, eff. 1-1-03.)

 9        Section   10.  The   Telecommunications    Infrastructure
10    Maintenance  Fee  Act  is  amended  by changing Section 10 as
11    follows:

12        (35 ILCS 635/10)
13        Sec. 10.  Definitions.
14        (a)  "Gross  charges"  means  the  amount   paid   to   a
15    telecommunications  retailer  for  the  act  or  privilege of
16    originating or receiving telecommunications in this State and
17    for all services rendered in connection therewith, valued  in
18    money  whether  paid  in  money or otherwise, including cash,
19    credits, services, and property of every kind or nature,  and
20    shall  be  determined without any deduction on account of the
21    cost of such telecommunications, the cost  of  the  materials
22    used,   labor   or   service  costs,  or  any  other  expense
23    whatsoever.  In case credit is extended, the  amount  thereof
24    shall  be included only as and when paid. "Gross charges" for
25    private line service shall include charges  imposed  at  each
26    channel  point  within  this  State,  charges for the channel
27    mileage between each channel point  within  this  State,  and
28    charges  for  that  portion  of  the  interstate inter-office
29    channel provided within Illinois. Charges for that portion of
30    the interstate  inter-office  channel  provided  in  Illinois
31    shall  be  determined  by  the  retailer as follows:  (i) for
32    interstate inter-office channels having 2 channel termination
 
HB1273 Enrolled            -9-                 LRB9203256SMdv
 1    points, only one of which is in Illinois, 50%  of  the  total
 2    charge  imposed;  (ii)  for  interstate inter-office channels
 3    having more than 2 channel termination points, one or more of
 4    which  are in Illinois, an amount equal to the  total  charge
 5    multiplied  by  a  fraction,  the  numerator  of which is the
 6    number of channel termination points within Illinois and  the
 7    denominator   of   which  is  the  total  number  of  channel
 8    termination points; or (iii) any other method that reasonably
 9    apportions the  total  charges  for  interstate  inter-office
10    channels among the states in which channel termination points
11    are  located. Prior to June 1, 2003, any apportionment method
12    consistent  with  this  paragraph  shall  be  accepted  as  a
13    reasonable method to determine the charges for  that  portion
14    of   the  interstate  inter-office  channel  provided  within
15    Illinois for that period. However, "gross charges" shall  not
16    include any of the following:
17             (1)  Any amounts added to a purchaser's bill because
18        of  a  charge  made  under:  (i)  the fee imposed by this
19        Section, (ii) additional charges added to  a  purchaser's
20        bill under Section 9-221 or 9-222 of the Public Utilities
21        Act,  (iii)  the  tax  imposed  by the Telecommunications
22        Excise Tax Act, (iv) 911 surcharges, (v) the tax  imposed
23        by Section 4251 of the Internal Revenue Code, or (vi) the
24        tax     imposed     by     the    Simplified    Municipal
25        Telecommunications Tax Act.;
26             (2)  Charges for a  sent  collect  telecommunication
27        received outside of this State.;
28             (3)  Charges for leased time on equipment or charges
29        for  the  storage  of  data  or information or subsequent
30        retrieval  or  the  processing  of  data  or  information
31        intended to change its form or content.   Such  equipment
32        includes,  but is not limited to, the use of calculators,
33        computers,   data   processing   equipment,    tabulating
34        equipment,  or accounting equipment and also includes the
 
HB1273 Enrolled            -10-                LRB9203256SMdv
 1        usage of computers under a time-sharing agreement.;
 2             (4)  Charges for customer equipment, including  such
 3        equipment  that  is leased or rented by the customer from
 4        any source, wherein such charges  are  disaggregated  and
 5        separately identified from other charges.;
 6             (5)  Charges to business enterprises certified under
 7        Section 9-222.1 of the Public Utilities Act to the extent
 8        of such exemption and during the period of time specified
 9        by the Department of Commerce and Community Affairs.;
10             (6)  Charges for telecommunications and all services
11        and  equipment provided in connection therewith between a
12        parent corporation and its wholly owned  subsidiaries  or
13        between wholly owned subsidiaries, and only to the extent
14        that  the  charges  between  the  parent  corporation and
15        wholly  owned  subsidiaries  or  between   wholly   owned
16        subsidiaries  represent  expense  allocation  between the
17        corporations and not the generation of profit other  than
18        a   regulatory   required   profit  for  the  corporation
19        rendering such services.;
20             (7)  Bad debts ("bad debt" means any  portion  of  a
21        debt  that is related to a sale at retail for which gross
22        charges are not otherwise deductible or  excludable  that
23        has  become  worthless  or  uncollectible,  as determined
24        under applicable federal income  tax  standards;  if  the
25        portion  of  the  debt  deemed  to be bad is subsequently
26        paid, the retailer shall report and pay the tax  on  that
27        portion  during the reporting period in which the payment
28        is made).; or
29             (8)  Charges   paid   by    inserting    coins    in
30        coin-operated telecommunication devices.
31             (9)  Charges     for    nontaxable    services    or
32        telecommunications if (i) those  charges  are  aggregated
33        with   other  charges  for  telecommunications  that  are
34        taxable, (ii) those charges are not separately stated  on
 
HB1273 Enrolled            -11-                LRB9203256SMdv
 1        the  customer bill or invoice, and (iii) the retailer can
 2        reasonably  identify  the  nontaxable  charges   on   the
 3        retailer's  books  and records kept in the regular course
 4        of business. If the nontaxable charges cannot  reasonably
 5        be  identified,  the  gross  charge from the sale of both
 6        taxable and  nontaxable  services  or  telecommunications
 7        billed  on  a  combined  basis shall be attributed to the
 8        taxable services or  telecommunications.  The  burden  of
 9        proving  nontaxable  charges  shall be on the retailer of
10        the telecommunications.
11        (a-5)  "Department"  means  the  Illinois  Department  of
12    Revenue.
13        (b)  "Telecommunications" includes, but  is  not  limited
14    to, messages or information transmitted through use of local,
15    toll,  and  wide  area  telephone  service, channel services,
16    telegraph services, teletypewriter service, computer exchange
17    services, private line  services,  specialized  mobile  radio
18    services,   or   any   other   transmission  of  messages  or
19    information by electronic or similar means, between or  among
20    points by wire, cable, fiber optics, laser, microwave, radio,
21    satellite, or similar facilities.  Unless the context clearly
22    requires  otherwise,  "telecommunications" shall also include
23    wireless   telecommunications   as    hereinafter    defined.
24    "Telecommunications"  shall  not include value added services
25    in which computer processing applications are used to act  on
26    the  form, content, code, and protocol of the information for
27    purposes other than transmission.  "Telecommunications" shall
28    not   include   purchase   of   telecommunications    by    a
29    telecommunications  service  provider  for use as a component
30    part of the service provided by him or her  to  the  ultimate
31    retail  consumer  who originates or terminates the end-to-end
32    communications.  Retailer access  charges,  right  of  access
33    charges,  charges for use of intercompany facilities, and all
34    telecommunications resold in  the  subsequent  provision  and
 
HB1273 Enrolled            -12-                LRB9203256SMdv
 1    used  as  a  component  of,  or  integrated  into, end-to-end
 2    telecommunications service shall not  be  included  in  gross
 3    charges  as sales for resale.  "Telecommunications" shall not
 4    include the provision  of  cable  services  through  a  cable
 5    system as defined in the Cable Communications Act of 1984 (47
 6    U.S.C.  Sections  521  and  following)  as  now  or hereafter
 7    amended or through an open video system  as  defined  in  the
 8    Rules  of  the  Federal  Communications Commission (47 C.D.F.
 9    76.1550  and  following)  as  now   or   hereafter   amended.
10    Beginning   January   1,   2001,  prepaid  telephone  calling
11    arrangements shall  not  be  considered  "telecommunications"
12    subject  to  the tax imposed under this Act.  For purposes of
13    this Section, "prepaid telephone calling arrangements"  means
14    that  term  as  defined  in  Section  2-27  of the Retailers'
15    Occupation Tax Act.
16        (c)  "Wireless  telecommunications"   includes   cellular
17    mobile  telephone  services,  personal  wireless  services as
18    defined in Section 704(C) of the  Telecommunications  Act  of
19    1996  (Public  Law  No. 104-104) as now or hereafter amended,
20    including all commercial mobile radio  services,  and  paging
21    services.
22        (d)  "Telecommunications   retailer"   or  "retailer"  or
23    "carrier" means and includes  every  person  engaged  in  the
24    business  of  making sales of telecommunications at retail as
25    defined  in  this  Section.   The  Department  may,  in   its
26    discretion,  upon  applications,  authorize the collection of
27    the fee hereby imposed by  any  retailer  not  maintaining  a
28    place of business within this State, who, to the satisfaction
29    of  the  Department,  furnishes  adequate  security to insure
30    collection and payment of the fee.  When  so  authorized,  it
31    shall be the duty of such retailer to pay the fee upon all of
32    the  gross  charges for telecommunications in the same manner
33    and  subject  to  the  same  requirements   as   a   retailer
34    maintaining a place of business within this State.
 
HB1273 Enrolled            -13-                LRB9203256SMdv
 1        (e)  "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        (f)  "Sale of telecommunications  at  retail"  means  the
13    transmitting,  supplying, or furnishing of telecommunications
14    and all services  rendered  in  connection  therewith  for  a
15    consideration,  other  than  between a parent corporation and
16    its  wholly  owned  subsidiaries  or  between  wholly   owned
17    subsidiaries,   when  the  gross  charge  made  by  one  such
18    corporation to another such corporation is not  greater  than
19    the  gross  charge  paid  to  the  retailer  for their use or
20    consumption and not for sale.
21        (g)  "Service   address"   means    the    location    of
22    telecommunications  equipment  from  which telecommunications
23    services  are  originated  or  at  which   telecommunications
24    services are received.  If this is not a defined location, as
25    in  the  case of wireless telecommunications, paging systems,
26    maritime systems, service address means the customer's  place
27    of  primary  use  as defined in the Mobile Telecommunications
28    Sourcing Conformity Act.  For air-to-ground systems, and  the
29    like,  "service  address"  shall  mean  the  location  of the
30    customer's primary use of the telecommunications equipment as
31    defined by the location in Illinois where bills are sent.
32    (Source: P.A. 91-870,  eff.  6-22-00;  92-474,  eff.  8-1-02;
33    92-526, eff. 1-1-03.)
 
HB1273 Enrolled            -14-                LRB9203256SMdv
 1        Section  15.  The Simplified Municipal Telecommunications
 2    Tax Act is amended by changing Section 5-7 as follows:

 3        (35 ILCS 636/5-7)
 4        Sec.  5-7.   Definitions.   For  purposes  of  the  taxes
 5    authorized by this Act:
 6        "Amount paid" means the amount charged to the  taxpayer's
 7    service address in such municipality regardless of where such
 8    amount is billed or paid.
 9        "Department" means the Illinois Department of Revenue.
10        "Gross  charge"  means  the  amount  paid  for the act or
11    privilege of originating or receiving  telecommunications  in
12    such municipality and for all services and equipment provided
13    in  connection  therewith  by  a  retailer,  valued  in money
14    whether paid in money or otherwise, including cash,  credits,
15    services  and  property of every kind or nature, and shall be
16    determined without any deduction on account of  the  cost  of
17    such  telecommunications,  the  cost  of  the materials used,
18    labor or service costs or any other expense  whatsoever.   In
19    case credit is extended, the amount thereof shall be included
20    only  as  and  when  paid.  "Gross  charges" for private line
21    service shall include charges imposed at each  channel  point
22    within  this  State,  charges for the channel mileage between
23    each channel point within this State, and  charges  for  that
24    portion  of  the  interstate  inter-office  channel  provided
25    within  Illinois.  Charges for that portion of the interstate
26    inter-office channel provided in Illinois shall be determined
27    by the retailer as follows:  (i) for interstate  inter-office
28    channels  having  2  channel  termination points, only one of
29    which is in Illinois, 50% of the total charge  imposed;  (ii)
30    for  interstate  inter-office  channels  having  more  than 2
31    channel termination points, one  or  more  of  which  are  in
32    Illinois, an amount equal to the total charge multiplied by a
33    fraction,  the  numerator  of  which is the number of channel
 
HB1273 Enrolled            -15-                LRB9203256SMdv
 1    termination points within Illinois  and  the  denominator  of
 2    which  is  the total number of channel termination points; or
 3    (iii) any other method that reasonably apportions  the  total
 4    charges for interstate inter-office channels among the states
 5    in  which  channel  termination  points are located. Prior to
 6    June 1, 2003, any apportionment method consistent  with  this
 7    paragraph  shall  be  accepted  as  a  reasonable  method  to
 8    determine  the  charges  for  that  portion of the interstate
 9    inter-office  channel  provided  within  Illinois  for   that
10    period.  However, "gross charge" shall not include any of the
11    following:
12             (1)  Any amounts added to a purchaser's bill because
13        of a charge made pursuant to: (i) the tax imposed by this
14        Act, (ii)  the  tax  imposed  by  the  Telecommunications
15        Excise  Tax Act, (iii) the tax imposed by Section 4251 of
16        the Internal Revenue Code, (iv) 911  surcharges,  or  (v)
17        charges   added  to  customers'  bills  pursuant  to  the
18        provisions of  Section  9-221  or  9-222  of  the  Public
19        Utilities  Act,  as amended, or any similar charges added
20        to customers' bills by retailers who are not  subject  to
21        rate  regulation  by the Illinois Commerce Commission for
22        the purpose of recovering any of the tax  liabilities  or
23        other amounts specified in those provisions of the Public
24        Utilities Act.;
25             (2)  Charges  for  a  sent collect telecommunication
26        received outside of such municipality.;
27             (3)  Charges for leased time on equipment or charges
28        for the storage of data  or  information  for  subsequent
29        retrieval  or  the  processing  of  data  or  information
30        intended  to  change its form or content.  Such equipment
31        includes, but is not limited to, the use of  calculators,
32        computers,    data   processing   equipment,   tabulating
33        equipment or accounting equipment and also  includes  the
34        usage of computers under a time-sharing agreement.;
 
HB1273 Enrolled            -16-                LRB9203256SMdv
 1             (4)  Charges  for customer equipment, including such
 2        equipment that is leased or rented by the  customer  from
 3        any  source,  wherein  such charges are disaggregated and
 4        separately identified from other charges.;
 5             (5)  Charges to business  enterprises  certified  as
 6        exempt  under Section 9-222.1 of the Public Utilities Act
 7        to the extent of such exemption and during the period  of
 8        time   specified   by  the  Department  of  Commerce  and
 9        Community Affairs.;
10             (6)  Charges for telecommunications and all services
11        and equipment provided in connection therewith between  a
12        parent  corporation  and its wholly owned subsidiaries or
13        between wholly owned subsidiaries when  the  tax  imposed
14        under  this  Act  has already been paid to a retailer and
15        only to the extent that the charges  between  the  parent
16        corporation  and  wholly  owned  subsidiaries  or between
17        wholly owned subsidiaries  represent  expense  allocation
18        between the corporations and not the generation of profit
19        for the corporation rendering such service.;
20             (7)  Bad  debts  ("bad  debt" means any portion of a
21        debt that is related to a sale at retail for which  gross
22        charges  are  not otherwise deductible or excludable that
23        has become  worthless  or  uncollectible,  as  determined
24        under  applicable  federal  income  tax standards; if the
25        portion of the debt deemed  to  be  bad  is  subsequently
26        paid,  the  retailer shall report and pay the tax on that
27        portion during the reporting period in which the  payment
28        is made).;
29             (8)  Charges    paid    by    inserting   coins   in
30        coin-operated telecommunication devices.; or
31             (9)  Amounts paid  by  telecommunications  retailers
32        under  the  Telecommunications Infrastructure Maintenance
33        Fee Act.
34             (10)  Charges    for    nontaxable    services    or
 
HB1273 Enrolled            -17-                LRB9203256SMdv
 1        telecommunications if (i) those  charges  are  aggregated
 2        with   other  charges  for  telecommunications  that  are
 3        taxable, (ii) those charges are not separately stated  on
 4        the  customer bill or invoice, and (iii) the retailer can
 5        reasonably  identify  the  nontaxable  charges   on   the
 6        retailer's  books  and records kept in the regular course
 7        of business. If the nontaxable charges cannot  reasonably
 8        be  identified,  the  gross  charge from the sale of both
 9        taxable and  nontaxable  services  or  telecommunications
10        billed  on  a  combined  basis shall be attributed to the
11        taxable services or  telecommunications.  The  burden  of
12        proving  nontaxable  charges  shall be on the retailer of
13        the telecommunications.
14        "Interstate      telecommunications"      means       all
15    telecommunications that either originate or terminate outside
16    this State.
17        "Intrastate       telecommunications"      means      all
18    telecommunications that originate and terminate  within  this
19    State.
20        "Person"  means  any  natural  individual,  firm,  trust,
21    estate,  partnership, association, joint stock company, joint
22    venture,  corporation,  limited  liability  company,   or   a
23    receiver,   trustee,   guardian,   or   other  representative
24    appointed by order  of  any  court,  the  Federal  and  State
25    governments, including State universities created by statute,
26    or  any city, town, county, or other political subdivision of
27    this State.
28        "Purchase at retail" means the  acquisition,  consumption
29    or use of telecommunications through a sale at retail.
30        "Retailer" means and includes every person engaged in the
31    business  of  making  sales  at  retail  as  defined  in this
32    Section.  The  Department  may,  in  its   discretion,   upon
33    application,  authorize  the  collection  of  the  tax hereby
34    imposed by any retailer not maintaining a place  of  business
 
HB1273 Enrolled            -18-                LRB9203256SMdv
 1    within   this   State,   who,  to  the  satisfaction  of  the
 2    Department, furnishes adequate security to insure  collection
 3    and  payment  of  the  tax.   Such  retailer shall be issued,
 4    without charge, a  permit  to  collect  such  tax.   When  so
 5    authorized,  it shall be the duty of such retailer to collect
 6    the tax upon all of the gross charges for  telecommunications
 7    in  this  State  in  the  same manner and subject to the same
 8    requirements as a retailer maintaining a  place  of  business
 9    within  this  State.   The  permit  may  be  revoked  by  the
10    Department at its discretion.
11        "Retailer maintaining a place of business in this State",
12    or  any  like term, means and includes any retailer having or
13    maintaining within this State, directly or by  a  subsidiary,
14    an  office, distribution facilities, transmission facilities,
15    sales office, warehouse or other place of  business,  or  any
16    agent  or  other  representative  operating within this State
17    under the  authority  of  the  retailer  or  its  subsidiary,
18    irrespective  of  whether  such place of business or agent or
19    other  representative  is   located   here   permanently   or
20    temporarily,  or  whether  such  retailer  or  subsidiary  is
21    licensed to do business in this State.
22        "Sale  at  retail"  means  the transmitting, supplying or
23    furnishing  of  telecommunications  and  all   services   and
24    equipment    provided   in   connection   therewith   for   a
25    consideration, to persons other than the  Federal  and  State
26    governments,  and  State  universities created by statute and
27    other than between a parent corporation and its wholly  owned
28    subsidiaries  or  between wholly owned subsidiaries for their
29    use or consumption and not for resale.
30        "Service    address"    means     the     location     of
31    telecommunications  equipment  from  which telecommunications
32    services  are  originated  or  at  which   telecommunications
33    services  are  received by a taxpayer.  In the event this may
34    not be a defined location, as in the case of  mobile  phones,
 
HB1273 Enrolled            -19-                LRB9203256SMdv
 1    paging  systems,  and maritime systems, service address means
 2    the customer's place of primary use as defined in the  Mobile
 3    Telecommunications     Sourcing    Conformity    Act.     For
 4    air-to-ground systems and the like, "service  address"  shall
 5    mean  the  location  of  a  taxpayer's  primary  use  of  the
 6    telecommunications  equipment as defined by telephone number,
 7    authorization code, or location in Illinois where  bills  are
 8    sent.
 9        "Taxpayer" means a person who individually or through his
10    or her agents, employees, or permittees engages in the act or
11    privilege of originating or receiving telecommunications in a
12    municipality  and who incurs a tax liability as authorized by
13    this Act.
14        "Telecommunications",  in   addition   to   the   meaning
15    ordinarily  and  popularly  ascribed to it, includes, without
16    limitation, messages or information transmitted  through  use
17    of local, toll, and wide area telephone service, private line
18    services,     channel     services,    telegraph    services,
19    teletypewriter, computer exchange services,  cellular  mobile
20    telecommunications   service,   specialized   mobile   radio,
21    stationary  two-way  radio, paging service, or any other form
22    of mobile and portable one-way or two-way communications,  or
23    any   other   transmission  of  messages  or  information  by
24    electronic or similar means, between or among points by wire,
25    cable, fiber optics, laser, microwave, radio,  satellite,  or
26    similar  facilities.   As  used  in  this Act, "private line"
27    means a dedicated non-traffic sensitive service for a  single
28    customer, that entitles the customer to exclusive or priority
29    use  of  a  communications channel or group of channels, from
30    one  or  more  specified  locations  to  one  or  more  other
31    specified locations.  The definition of  "telecommunications"
32    shall  not  include  value  added  services in which computer
33    processing applications are used to act on the form, content,
34    code, and protocol of the information for purposes other than
 
HB1273 Enrolled            -20-                LRB9203256SMdv
 1    transmission.    "Telecommunications"   shall   not   include
 2    purchases  of  telecommunications  by  a   telecommunications
 3    service  provider  for use as a component part of the service
 4    provided by such provider to the ultimate retail consumer who
 5    originates   or    terminates    the    taxable    end-to-end
 6    communications.   Carrier  access  charges,  right  of access
 7    charges, charges for use of inter-company facilities, and all
 8    telecommunications resold in  the  subsequent  provision  of,
 9    used  as  a  component  of,  or  integrated  into, end-to-end
10    telecommunications service shall be non-taxable as sales  for
11    resale.   Prepaid telephone calling arrangements shall not be
12    considered "telecommunications" subject to  the  tax  imposed
13    under  this  Act.   For  purposes  of  this Section, "prepaid
14    telephone calling arrangements" means that term as defined in
15    Section 2-27 of the  Retailers'  Occupation  Occupations  Tax
16    Act.
17    (Source: P.A. 92-526, eff. 7-1-02; revised 2-25-02.)

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