Bill Text: IL HB1236 | 2017-2018 | 100th General Assembly | Introduced

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Bill Title: Amends the Illinois Municipal Code. Makes a technical change in a Section concerning municipal occupation and privilege taxes.

Sponsorship: Partisan Bill (Democrat 1)

Status: (Failed) 2019-01-08 - Session Sine Die [HB1236 Detail]

Download: Illinois-2017-HB1236-Introduced.html

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100TH GENERAL ASSEMBLY State of Illinois 2017 and 2018 HB1236 Introduced , by Rep. Michael J. Madigan SYNOPSIS AS INTRODUCED:
65 ILCS 5/8-11-2 from Ch. 24, par. 8-11-2
Amends the Illinois Municipal Code. Makes a technical change in a Section concerning municipal occupation and privilege taxes.
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A BILL FOR
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AN ACT concerning local government.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Municipal Code is amended by
changing Section 8-11-2 as follows:
(65 ILCS 5/8-11-2) (from Ch. 24, par. 8-11-2)
Sec. 8-11-2. The The corporate authorities of any
municipality may tax any or all of the following occupations or
privileges:
1. (Blank).
2. Persons engaged in the business of distributing,
supplying, furnishing, or selling gas for use or
consumption within the corporate limits of a municipality
of 500,000 or fewer population, and not for resale, at a
rate not to exceed 5% of the gross receipts therefrom.
2a. Persons engaged in the business of distributing,
supplying, furnishing, or selling gas for use or
consumption within the corporate limits of a municipality
of over 500,000 population, and not for resale, at a rate
not to exceed 8% of the gross receipts therefrom. If
imposed, this tax shall be paid in monthly payments.
3. The privilege of using or consuming electricity
acquired in a purchase at retail and used or consumed

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within the corporate limits of the municipality at rates
not to exceed the following maximum rates, calculated on a
monthly basis for each purchaser:
(i) For the first 2,000 kilowatt-hours used or
consumed in a month; 0.61 cents per kilowatt-hour;
(ii) For the next 48,000 kilowatt-hours used or
consumed in a month; 0.40 cents per kilowatt-hour;
(iii) For the next 50,000 kilowatt-hours used or
consumed in a month; 0.36 cents per kilowatt-hour;
(iv) For the next 400,000 kilowatt-hours used or
consumed in a month; 0.35 cents per kilowatt-hour;
(v) For the next 500,000 kilowatt-hours used or
consumed in a month; 0.34 cents per kilowatt-hour;
(vi) For the next 2,000,000 kilowatt-hours used or
consumed in a month; 0.32 cents per kilowatt-hour;
(vii) For the next 2,000,000 kilowatt-hours used
or consumed in a month; 0.315 cents per kilowatt-hour;
(viii) For the next 5,000,000 kilowatt-hours used
or consumed in a month; 0.31 cents per kilowatt-hour;
(ix) For the next 10,000,000 kilowatt-hours used
or consumed in a month; 0.305 cents per kilowatt-hour;
and
(x) For all electricity used or consumed in excess
of 20,000,000 kilowatt-hours in a month, 0.30 cents per
kilowatt-hour.
If a municipality imposes a tax at rates lower than

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either the maximum rates specified in this Section or the
alternative maximum rates promulgated by the Illinois
Commerce Commission, as provided below, the tax rates shall
be imposed upon the kilowatt hour categories set forth
above with the same proportional relationship as that which
exists among such maximum rates. Notwithstanding the
foregoing, until December 31, 2008, no municipality shall
establish rates that are in excess of rates reasonably
calculated to produce revenues that equal the maximum total
revenues such municipality could have received under the
tax authorized by this subparagraph in the last full
calendar year prior to August 1, 1998 (the effective date
of Section 65 of Public Act 90-561) this amendatory Act of
1997; provided that this shall not be a limitation on the
amount of tax revenues actually collected by such
municipality.
Upon the request of the corporate authorities of a
municipality, the Illinois Commerce Commission shall,
within 90 days after receipt of such request, promulgate
alternative rates for each of these kilowatt-hour
categories that will reflect, as closely as reasonably
practical for that municipality, the distribution of the
tax among classes of purchasers as if the tax were based on
a uniform percentage of the purchase price of electricity.
A municipality that has adopted an ordinance imposing a tax
pursuant to subparagraph 3 as it existed prior to August 1,

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1998 (the effective date of Section 65 of Public Act
90-561) this amendatory Act of 1997 may, rather than
imposing the tax permitted by Public Act 90-561 this
amendatory Act of 1997, continue to impose the tax pursuant
to that ordinance with respect to gross receipts received
from residential customers through July 31, 1999, and with
respect to gross receipts from any non-residential
customer until the first bill issued to such customer for
delivery services in accordance with Section 16-104 of the
Public Utilities Act but in no case later than the last
bill issued to such customer before December 31, 2000. No
ordinance imposing the tax permitted by Public Act 90-561
this amendatory Act of 1997 shall be applicable to any
non-residential customer until the first bill issued to
such customer for delivery services in accordance with
Section 16-104 of the Public Utilities Act but in no case
later than the last bill issued to such non-residential
customer before December 31, 2000.
4. Persons engaged in the business of distributing,
supplying, furnishing, or selling water for use or
consumption within the corporate limits of the
municipality, and not for resale, at a rate not to exceed
5% of the gross receipts therefrom.
None of the taxes authorized by this Section may be imposed
with respect to any transaction in interstate commerce or
otherwise to the extent to which the business or privilege may

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not, under the constitution and statutes of the United States,
be made the subject of taxation by this State or any political
sub-division thereof; nor shall any persons engaged in the
business of distributing, supplying, furnishing, selling or
transmitting gas, water, or electricity, or using or consuming
electricity acquired in a purchase at retail, be subject to
taxation under the provisions of this Section for those
transactions that are or may become subject to taxation under
the provisions of the "Municipal Retailers' Occupation Tax Act"
authorized by Section 8-11-1; nor shall any tax authorized by
this Section be imposed upon any person engaged in a business
or on any privilege unless the tax is imposed in like manner
and at the same rate upon all persons engaged in businesses of
the same class in the municipality, whether privately or
municipally owned or operated, or exercising the same privilege
within the municipality.
Any of the taxes enumerated in this Section may be in
addition to the payment of money, or value of products or
services furnished to the municipality by the taxpayer as
compensation for the use of its streets, alleys, or other
public places, or installation and maintenance therein,
thereon or thereunder of poles, wires, pipes, or other
equipment used in the operation of the taxpayer's business.
(a) If the corporate authorities of any home rule
municipality have adopted an ordinance that imposed a tax on
public utility customers, between July 1, 1971, and October 1,

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1981, on the good faith belief that they were exercising
authority pursuant to Section 6 of Article VII of the 1970
Illinois Constitution, that action of the corporate
authorities shall be declared legal and valid, notwithstanding
a later decision of a judicial tribunal declaring the ordinance
invalid. No municipality shall be required to rebate, refund,
or issue credits for any taxes described in this paragraph, and
those taxes shall be deemed to have been levied and collected
in accordance with the Constitution and laws of this State.
(b) In any case in which (i) prior to October 19, 1979, the
corporate authorities of any municipality have adopted an
ordinance imposing a tax authorized by this Section (or by the
predecessor provision of the "Revised Cities and Villages Act")
and have explicitly or in practice interpreted gross receipts
to include either charges added to customers' bills pursuant to
the provision of paragraph (a) of Section 36 of the Public
Utilities Act or 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 paragraph (a) of
Section 36 of that Act, and (ii) on or after October 19, 1979,
a judicial tribunal has construed gross receipts to exclude all
or part of those charges, then neither that those municipality
nor any taxpayer who paid the tax shall be required to rebate,
refund, or issue credits for any tax imposed or charge
collected from customers pursuant to the municipality's

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interpretation prior to October 19, 1979. This paragraph
reflects a legislative finding that it would be contrary to the
public interest to require a municipality or its taxpayers to
refund taxes or charges attributable to the municipality's more
inclusive interpretation of gross receipts prior to October 19,
1979, and is not intended to prescribe or limit judicial
construction of this Section. The legislative finding set forth
in this subsection does not apply to taxes imposed after
January 1, 1996 (the effective date of Public Act 89-325) this
amendatory Act of 1995.
(c) The tax authorized by subparagraph 3 shall be collected
from the purchaser by the person maintaining a place of
business in this State who delivers the electricity to the
purchaser. This tax shall constitute a debt of the purchaser to
the person who delivers the electricity to the purchaser and if
unpaid, is recoverable in the same manner as the original
charge for delivering the electricity. Any tax required to be
collected pursuant to an ordinance authorized by subparagraph 3
and any such tax collected by a person delivering electricity
shall constitute a debt owed to the municipality by such person
delivering the electricity, provided, that the person
delivering electricity shall be allowed credit for such tax
related to deliveries of electricity the charges for which are
written off as uncollectible, and provided further, that if
such charges are thereafter collected, the delivering supplier
shall be obligated to remit such tax. For purposes of this

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subsection (c), any partial payment not specifically
identified by the purchaser shall be deemed to be for the
delivery of electricity. Persons delivering electricity shall
collect the tax from the purchaser by adding such tax to the
gross charge for delivering the electricity, in the manner
prescribed by the municipality. Persons delivering electricity
shall also be authorized to add to such gross charge an amount
equal to 3% of the tax to reimburse the person delivering
electricity for the expenses incurred in keeping records,
billing customers, preparing and filing returns, remitting the
tax and supplying data to the municipality upon request. If the
person delivering electricity fails to collect the tax from the
purchaser, then the purchaser shall be required to pay the tax
directly to the municipality in the manner prescribed by the
municipality. Persons delivering electricity who file returns
pursuant to this paragraph (c) shall, at the time of filing
such return, pay the municipality the amount of the tax
collected pursuant to subparagraph 3.
(d) For the purpose of the taxes enumerated in this
Section:
"Gross receipts" means the consideration received for
distributing, supplying, furnishing or selling gas for use or
consumption and not for resale, and the consideration received
for distributing, supplying, furnishing or selling water for
use or consumption and not for resale, and for all services
rendered in connection therewith valued in money, whether

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received in money or otherwise, including cash, credit,
services and property of every kind and material and for all
services rendered therewith, 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 cost, or any other expenses whatsoever. "Gross
receipts" shall not include that portion of the consideration
received for distributing, supplying, furnishing, or selling
gas or water to business enterprises described in paragraph (e)
of this Section to the extent and during the period in which
the exemption authorized by paragraph (e) is in effect or for
school districts or units of local government described in
paragraph (f) during the period in which the exemption
authorized in paragraph (f) is in effect.
For utility bills issued on or after May 1, 1996, but
before May 1, 1997, and for receipts from those utility bills,
"gross receipts" does not include one-third of (i) amounts
added to customers' bills under Section 9-222 of the Public
Utilities Act, or (ii) amounts 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 described in Section 9-222 of the Public
Utilities Act. For utility bills issued on or after May 1,
1997, but before May 1, 1998, and for receipts from those
utility bills, "gross receipts" does not include two-thirds of
(i) amounts added to customers' bills under Section 9-222 of

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the Public Utilities Act, or (ii) amount 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 described in Section 9-222 of the
Public Utilities Act. For utility bills issued on or after May
1, 1998, and for receipts from those utility bills, "gross
receipts" does not include (i) amounts added to customers'
bills under Section 9-222 of the Public Utilities Act, or (ii)
amounts 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
described in Section 9-222 of the Public Utilities Act.
For purposes of this Section "gross receipts" shall not
include amounts added to customers' bills under Section 9-221
of the Public Utilities Act. This paragraph is not intended to
nor does it make any change in the meaning of "gross receipts"
for the purposes of this Section, but is intended to remove
possible ambiguities, thereby confirming the existing meaning
of "gross receipts" prior to January 1, 1996 (the effective
date of Public Act 89-325) this amendatory Act of 1995.
"Person" as used in this Section means any natural
individual, firm, trust, estate, partnership, association,
joint stock company, joint adventure, corporation, limited
liability company, municipal corporation, the State or any of
its political subdivisions, any State university created by
statute, or a receiver, trustee, guardian or other

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representative appointed by order of any court.
"Person maintaining a place of business in this State"
shall mean any person having or maintaining within this State,
directly or by a subsidiary or other affiliate, an office,
generation facility, distribution facility, transmission
facility, sales office or other place of business, or any
employee, agent, or other representative operating within this
State under the authority of the person or its subsidiary or
other affiliate, irrespective of whether such place of business
or agent or other representative is located in this State
permanently or temporarily, or whether such person, subsidiary
or other affiliate is licensed or qualified to do business in
this State.
"Public utility" shall have the meaning ascribed to it in
Section 3-105 of the Public Utilities Act and shall include
alternative retail electric suppliers as defined in Section
16-102 of that Act.
"Purchase at retail" shall mean any acquisition of
electricity by a purchaser for purposes of use or consumption,
and not for resale, but shall not include the use of
electricity by a public utility directly in the generation,
production, transmission, delivery or sale of electricity.
"Purchaser" shall mean any person who uses or consumes,
within the corporate limits of the municipality, electricity
acquired in a purchase at retail.
(e) Any municipality that imposes taxes upon public

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utilities or upon the privilege of using or consuming
electricity pursuant to this Section whose territory includes
any part of an enterprise zone or federally designated Foreign
Trade Zone or Sub-Zone may, by a majority vote of its corporate
authorities, exempt from those taxes for a period not exceeding
20 years any specified percentage of gross receipts of public
utilities received from, or electricity used or consumed by,
business enterprises that:
(1) either (i) make investments that cause the creation
of a minimum of 200 full-time equivalent jobs in Illinois,
(ii) make investments of at least $175,000,000 that cause
the creation of a minimum of 150 full-time equivalent jobs
in Illinois, or (iii) make investments that cause the
retention of a minimum of 1,000 full-time jobs in Illinois;
and
(2) are either (i) located in an Enterprise Zone
established pursuant to the Illinois Enterprise Zone Act or
(ii) Department of Commerce and Economic Opportunity
designated High Impact Businesses located in a federally
designated Foreign Trade Zone or Sub-Zone; and
(3) are certified by the Department of Commerce and
Economic Opportunity as complying with the requirements
specified in clauses (1) and (2) of this paragraph (e).
Upon adoption of the ordinance authorizing the exemption,
the municipal clerk shall transmit a copy of that ordinance to
the Department of Commerce and Economic Opportunity. The

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Department of Commerce and Economic Opportunity shall
determine whether the business enterprises located in the
municipality meet the criteria prescribed in this paragraph. If
the Department of Commerce and Economic Opportunity determines
that the business enterprises meet the criteria, it shall grant
certification. The Department of Commerce and Economic
Opportunity shall act upon certification requests within 30
days after receipt of the ordinance.
Upon certification of the business enterprise by the
Department of Commerce and Economic Opportunity, the
Department of Commerce and Economic Opportunity shall notify
the Department of Revenue of the certification. The Department
of Revenue shall notify the public utilities of the exemption
status of the gross receipts received from, and the electricity
used or consumed by, the certified business enterprises. Such
exemption status shall be effective within 3 months after
certification.
(f) A municipality that imposes taxes upon public utilities
or upon the privilege of using or consuming electricity under
this Section and whose territory includes part of another unit
of local government or a school district may by ordinance
exempt the other unit of local government or school district
from those taxes.
(g) The amendment of this Section by Public Act 84-127
shall take precedence over any other amendment of this Section
by any other amendatory Act passed by the 84th General Assembly

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before August 1, 1985 (the effective date of Public Act
84-127).
(h) In any case in which, before July 1, 1992, a person
engaged in the business of transmitting messages through the
use of mobile equipment, such as cellular phones and paging
systems, has determined the municipality within which the gross
receipts from the business originated by reference to the
location of its transmitting or switching equipment, then (i)
neither the municipality to which tax was paid on that basis
nor the taxpayer that paid tax on that basis shall be required
to rebate, refund, or issue credits for any such tax or charge
collected from customers to reimburse the taxpayer for the tax
and (ii) no municipality to which tax would have been paid with
respect to those gross receipts if the provisions of Public Act
87-773 this amendatory Act of 1991 had been in effect before
July 1, 1992, shall have any claim against the taxpayer for any
amount of the tax.
(Source: P.A. 94-793, eff. 5-19-06; revised 9-21-16.)