Bill Text: IL HB4438 | 2023-2024 | 103rd General Assembly | Introduced

---

Bill Title: Amends the Gas Use Tax Law. Exempts certain business enterprises from taxation under the Act. Amends the Gas Revenue Tax Act. Provides that the definition of "gross receipts" does not include consideration received from certain business enterprises. Amends the Electricity Excise Tax Law. Provides that the tax under the Act is not imposed with respect to any use by the purchaser in the process of manufacturing or assembling tangible personal property for wholesale or for retail sale or lease. Effective immediately.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2024-04-05 - Rule 19(a) / Re-referred to Rules Committee [HB4438 Detail]

Download: Illinois-2023-HB4438-Introduced.html

---

103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB4438 Introduced , by Rep. Norine K. Hammond SYNOPSIS AS INTRODUCED:
35 ILCS 173/5-10
35 ILCS 615/1 from Ch. 120, par. 467.16
35 ILCS 640/2-4
Amends the Gas Use Tax Law. Exempts certain business enterprises from taxation under the Act. Amends the Gas Revenue Tax Act. Provides that the definition of "gross receipts" does not include consideration received from certain business enterprises. Amends the Electricity Excise Tax Law. Provides that the tax under the Act is not imposed with respect to any use by the purchaser in the process of manufacturing or assembling tangible personal property for wholesale or for retail sale or lease. Effective immediately.
LRB103 36261 HLH 66358 b
A BILL FOR
HB4438 LRB103 36261 HLH 66358 b
AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Gas Use Tax Law is amended by changing
Section 5-10 as follows:
(35 ILCS 173/5-10)
Sec. 5-10. Imposition of tax. Beginning October 1, 2003, a
tax is imposed upon the privilege of using in this State gas
obtained in a purchase of out-of-state gas at the rate of 2.4
cents per therm or 5% of the purchase price for the billing
period, whichever is the lower rate. Such tax rate shall be
referred to as the "self-assessing purchaser tax rate".
Beginning with bills issued by delivering suppliers on and
after October 1, 2003, purchasers may elect an alternative tax
rate of 2.4 cents per therm to be paid under the provisions of
Section 5-15 of this Law to a delivering supplier maintaining
a place of business in this State. Such tax rate shall be
referred to as the "alternate tax rate".
The tax imposed under this Section shall not apply to gas
used by business enterprises certified under Section 9-222.1
of the Public Utilities Act, as amended, to the extent of such
exemption and during the period of time specified by the
Department of Commerce and Economic Opportunity.

HB4438 - 2 - LRB103 36261 HLH 66358 b
The tax imposed under this Section does not apply to gas
used by any business enterprise that is properly assigned or
included within one of the following Standard Industrial
Classifications, as designated in the 1987 Standard Industrial
Classification Manual prepared by the federal Office of
Management and Budget: 10; 12; 13; 14; 21; 22; 23; 24; 25; 26;
27; 28; 29; 30; 31; 32; 33; 34; 35; 36; 37; 38; or 39.
(Source: P.A. 93-31, eff. 10-1-03; 94-793, eff. 5-19-06.)
Section 10. The Gas Revenue Tax Act is amended by changing
Section 1 as follows:
(35 ILCS 615/1) (from Ch. 120, par. 467.16)
Sec. 1. For the purposes of this Act: "Gross receipts"
means the consideration received for gas distributed,
supplied, furnished or sold to persons for use or consumption
and not for resale, and for all services (including the
transportation or storage of gas for an end-user) rendered in
connection therewith, and shall include cash, services and
property of every kind or nature, and shall be determined
without any deduction on account of the cost of the service,
product or commodity supplied, the cost of materials used,
labor or service costs, or any other expense whatsoever.
However, "gross receipts" shall not include receipts from:
(i) any minimum or other charge for gas or gas service
where the customer has taken no therms of gas;

HB4438 - 3 - LRB103 36261 HLH 66358 b
(ii) any charge for a dishonored check;
(iii) any finance or credit charge, penalty or charge
for delayed payment, or discount for prompt payment;
(iv) any charge for reconnection of service or for
replacement or relocation of facilities;
(v) any advance or contribution in aid of
construction;
(vi) repair, inspection or servicing of equipment
located on customer premises;
(vii) leasing or rental of equipment, the leasing or
rental of which is not necessary to distributing,
furnishing, supplying, selling, transporting or storing
gas;
(viii) any sale to a customer if the taxpayer is
prohibited by federal or State constitution, treaty,
convention, statute or court decision from recovering the
related tax liability from such customer;
(ix) any charges added to customers' bills pursuant to
the provisions of Section 9-221 or Section 9-222 of the
Public Utilities Act, as amended, or any charges added to
customers' bills by taxpayers who are not subject to rate
regulation by the Illinois Commerce Commission for the
purpose of recovering any of the tax liabilities or other
amounts specified in such provisions of such Act; and
(x) prior to October 1, 2003, any charge for gas or gas
services to a customer who acquired contractual rights for

HB4438 - 4 - LRB103 36261 HLH 66358 b
the direct purchase of gas or gas services originating
from an out-of-state supplier or source on or before March
1, 1995, except for those charges solely related to the
local distribution of gas by a public utility. This
exemption includes any charge for gas or gas service,
except for those charges solely related to the local
distribution of gas by a public utility, to a customer who
maintained an account with a public utility (as defined in
Section 3-105 of the Public Utilities Act) for the
transportation of customer-owned gas on or before March 1,
1995. The provisions of this amendatory Act of 1997 are
intended to clarify, rather than change, existing law as
to the meaning and scope of this exemption. This exemption
(x) expires on September 30, 2003.
In case credit is extended, the amount thereof shall be
included only as and when payments are received.
"Gross receipts" shall not include consideration received
from business enterprises certified under Section 9-222.1 of
the Public Utilities Act, as amended, to the extent of such
exemption and during the period of time specified by the
Department of Commerce and Economic Opportunity.
"Gross receipts" does not include consideration received
from any business enterprise that is properly assigned or
included within one of the following Standard Industrial
Classifications, as designated in the 1987 Standard Industrial
Classification Manual prepared by the federal Office of

HB4438 - 5 - LRB103 36261 HLH 66358 b
Management and Budget: 10; 12; 13; 14; 21; 22; 23; 24; 25; 26;
27; 28; 29; 30; 31; 32; 33; 34; 35; 36; 37; 38; or 39.
"Department" means the Department of Revenue of the State
of Illinois.
"Director" means the Director of Revenue for the
Department of Revenue of the State of Illinois.
"Taxpayer" means a person engaged in the business of
distributing, supplying, furnishing or selling gas for use or
consumption and not for resale.
"Person" means any natural individual, firm, trust,
estate, partnership, association, joint stock company, joint
adventure, corporation, limited liability company, or a
receiver, trustee, guardian or other representative appointed
by order of any court, or any city, town, county or other
political subdivision of this State.
"Invested capital" means that amount equal to (i) the
average of the balances at the beginning and end of each
taxable period of the taxpayer's total stockholder's equity
and total long-term debt, less investments in and advances to
all corporations, as set forth on the balance sheets included
in the taxpayer's annual report to the Illinois Commerce
Commission for the taxable period; (ii) multiplied by a
fraction determined under Sections 301 and 304(a) of the
"Illinois Income Tax Act" and reported on the Illinois income
tax return for the taxable period ending in or with the taxable
period in question. However, notwithstanding the income tax

HB4438 - 6 - LRB103 36261 HLH 66358 b
return reporting requirement stated above, beginning July 1,
1979, no taxpayer's denominators used to compute the sales,
property or payroll factors under subsection (a) of Section
304 of the Illinois Income Tax Act shall include payroll,
property or sales of any corporate entity other than the
taxpayer for the purposes of determining an allocation for the
invested capital tax. This amendatory Act of 1982, Public Act
82-1024, is not intended to and does not make any change in the
meaning of any provision of this Act, it having been the intent
of the General Assembly in initially enacting the definition
of "invested capital" to provide for apportionment of the
invested capital of each company, based solely upon the sales,
property and payroll of that company.
"Taxable period" means each period which ends after the
effective date of this Act and which is covered by an annual
report filed by the taxpayer with the Illinois Commerce
Commission.
(Source: P.A. 93-31, eff. 10-1-03; 94-793, eff. 5-19-06.)
Section 15. The Electricity Excise Tax Law is amended by
changing Section 2-4 as follows:
(35 ILCS 640/2-4)
Sec. 2-4. Tax imposed.
(a) Except as provided in subsection (b), a tax is imposed
on the privilege of using in this State electricity purchased

HB4438 - 7 - LRB103 36261 HLH 66358 b
for use or consumption and not for resale, other than by
municipal corporations owning and operating a local
transportation system for public service, at the following
rates per kilowatt-hour delivered to the purchaser:
(i) For the first 2000 kilowatt-hours used or consumed
in a month: 0.330 cents per kilowatt-hour;
(ii) For the next 48,000 kilowatt-hours used or
consumed in a month: 0.319 cents per kilowatt-hour;
(iii) For the next 50,000 kilowatt-hours used or
consumed in a month: 0.303 cents per kilowatt-hour;
(iv) For the next 400,000 kilowatt-hours used or
consumed in a month: 0.297 cents per kilowatt-hour;
(v) For the next 500,000 kilowatt-hours used or
consumed in a month: 0.286 cents per kilowatt-hour;
(vi) For the next 2,000,000 kilowatt-hours used or
consumed in a month: 0.270 cents per kilowatt-hour;
(vii) For the next 2,000,000 kilowatt-hours used or
consumed in a month: 0.254 cents per kilowatt-hour;
(viii) For the next 5,000,000 kilowatt-hours used or
consumed in a month: 0.233 cents per kilowatt-hour;
(ix) For the next 10,000,000 kilowatt-hours used or
consumed in a month: 0.207 cents per kilowatt-hour;
(x) For all electricity in excess of 20,000,000
kilowatt-hours used or consumed in a month: 0.202 cents
per kilowatt-hour.
Provided, that in lieu of the foregoing rates, the tax is

HB4438 - 8 - LRB103 36261 HLH 66358 b
imposed on a self-assessing purchaser at the rate of 5.1% of
the self-assessing purchaser's purchase price for all
electricity distributed, supplied, furnished, sold,
transmitted and delivered to the self-assessing purchaser in a
month.
(b) A tax is imposed on the privilege of using in this
State electricity purchased from a municipal system or
electric cooperative, as defined in Article XVII of the Public
Utilities Act, which has not made an election as permitted by
either Section 17-200 or Section 17-300 of such Act, at the
lesser of 0.32 cents per kilowatt hour of all electricity
distributed, supplied, furnished, sold, transmitted, and
delivered by such municipal system or electric cooperative to
the purchaser or 5% of each such purchaser's purchase price
for all electricity distributed, supplied, furnished, sold,
transmitted, and delivered by such municipal system or
electric cooperative to the purchaser, whichever is the lower
rate as applied to each purchaser in each billing period.
(c) The tax imposed by this Section 2-4 is not imposed with
respect to any use of electricity by business enterprises
certified under Section 9-222.1 or 9-222.1A of the Public
Utilities Act, as amended, to the extent of such exemption and
during the time specified by the Department of Commerce and
Economic Opportunity; or with respect to any transaction in
interstate commerce, or otherwise, to the extent to which such
transaction may not, under the Constitution and statutes of

HB4438 - 9 - LRB103 36261 HLH 66358 b
the United States, be made the subject of taxation by this
State.
(d) The tax imposed by this Section 2-4 is not imposed with
respect to any use of electricity at a REV Illinois Project
site that has received a certification for tax exemption from
the Department of Commerce and Economic Opportunity pursuant
to Section 95 of the Reimagining Energy and Vehicles in
Illinois Act, to the extent of such exemption, which shall be
no more than 10 years.
(e) The tax imposed by this Section 2-4 is not imposed with
respect to any use of electricity at a project site that has
received a certification for tax exemption from the Department
of Commerce and Economic Opportunity pursuant to the
Manufacturing Illinois Chips for Real Opportunity (MICRO) Act,
to the extent of such exemption, which shall be no more than 10
years.
(f) The tax imposed by this Section 2-4 is not imposed with
respect to any use by the purchaser in the process of
manufacturing or assembling tangible personal property for
wholesale or for retail sale or lease.
(Source: P.A. 102-669, eff. 11-16-21; 102-700, eff. 4-19-22;
102-1125, eff. 2-3-23.)