Bill Text: IL HB3092 | 2015-2016 | 99th General Assembly | Introduced
Bill Title: Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that a not-for-profit organization that (i) has received an exemption under Section 501(c)(3) of the Internal Revenue Code, (ii) has gross receipts of no more than $10,000 per year, and (iii) is organized and operated exclusively for charitable, religious, or educational purposes is not considered a retailer or a serviceman. Effective immediately.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced - Dead) 2015-03-27 - Rule 19(a) / Re-referred to Rules Committee [HB3092 Detail]
Download: Illinois-2015-HB3092-Introduced.html
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1 | AN ACT concerning revenue.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Use Tax Act is amended by changing Section 2 | ||||||||||||||||||||||||||||||
5 | as follows:
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6 | (35 ILCS 105/2) (from Ch. 120, par. 439.2)
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7 | Sec. 2. Definitions. | ||||||||||||||||||||||||||||||
8 | "Use" means the exercise by any person of any right or | ||||||||||||||||||||||||||||||
9 | power over
tangible personal property incident to the ownership | ||||||||||||||||||||||||||||||
10 | of that property,
except that it does not include the sale of | ||||||||||||||||||||||||||||||
11 | such property in any form as
tangible personal property in the | ||||||||||||||||||||||||||||||
12 | regular course of business to the extent
that such property is | ||||||||||||||||||||||||||||||
13 | not first subjected to a use for which it was
purchased, and | ||||||||||||||||||||||||||||||
14 | does not include the use of such property by its owner for
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15 | demonstration purposes: Provided that the property purchased | ||||||||||||||||||||||||||||||
16 | is deemed to
be purchased for the purpose of resale, despite | ||||||||||||||||||||||||||||||
17 | first being used, to the
extent to which it is resold as an | ||||||||||||||||||||||||||||||
18 | ingredient of an intentionally produced
product or by-product | ||||||||||||||||||||||||||||||
19 | of manufacturing. "Use" does not mean the demonstration
use or | ||||||||||||||||||||||||||||||
20 | interim use of tangible personal property by a retailer before | ||||||||||||||||||||||||||||||
21 | he sells
that tangible personal property. For watercraft or | ||||||||||||||||||||||||||||||
22 | aircraft, if the period of
demonstration use or interim use by | ||||||||||||||||||||||||||||||
23 | the retailer exceeds 18 months,
the retailer
shall pay on the |
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1 | retailers' original cost price the tax imposed by this Act,
and | ||||||
2 | no credit for that tax is permitted if the watercraft or | ||||||
3 | aircraft is
subsequently sold by the retailer. "Use" does not | ||||||
4 | mean the physical
incorporation of tangible personal property, | ||||||
5 | to the extent not first subjected
to a use for which it was | ||||||
6 | purchased, as an ingredient or constituent, into
other tangible | ||||||
7 | personal property (a) which is sold in the regular course of
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8 | business or (b) which the person incorporating such ingredient | ||||||
9 | or constituent
therein has undertaken at the time of such | ||||||
10 | purchase to cause to be transported
in interstate commerce to | ||||||
11 | destinations outside the State of Illinois: Provided
that the | ||||||
12 | property purchased is deemed to be purchased for the purpose of
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13 | resale, despite first being used, to the extent to which it is | ||||||
14 | resold as an
ingredient of an intentionally produced product or | ||||||
15 | by-product of manufacturing.
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16 | "Watercraft" means a Class 2, Class 3, or Class 4 | ||||||
17 | watercraft as defined in
Section 3-2 of the Boat Registration | ||||||
18 | and Safety Act, a personal watercraft, or
any boat equipped | ||||||
19 | with an inboard motor.
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20 | "Purchase at retail" means the acquisition of the ownership | ||||||
21 | of or title
to tangible personal property through a sale at | ||||||
22 | retail.
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23 | "Purchaser" means anyone who, through a sale at retail, | ||||||
24 | acquires the
ownership of tangible personal property for a | ||||||
25 | valuable consideration.
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26 | "Sale at retail" means any transfer of the ownership of or |
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1 | title to
tangible personal property to a purchaser, for the | ||||||
2 | purpose of use, and not
for the purpose of resale in any form | ||||||
3 | as tangible personal property to the
extent not first subjected | ||||||
4 | to a use for which it was purchased, for a
valuable | ||||||
5 | consideration: Provided that the property purchased is deemed | ||||||
6 | to
be purchased for the purpose of resale, despite first being | ||||||
7 | used, to the
extent to which it is resold as an ingredient of | ||||||
8 | an intentionally produced
product or by-product of | ||||||
9 | manufacturing. For this purpose, slag produced as
an incident | ||||||
10 | to manufacturing pig iron or steel and sold is considered to be
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11 | an intentionally produced by-product of manufacturing. "Sale | ||||||
12 | at retail"
includes any such transfer made for resale unless | ||||||
13 | made in compliance with
Section 2c of the Retailers' Occupation | ||||||
14 | Tax Act, as incorporated by
reference into Section 12 of this | ||||||
15 | Act. Transactions whereby the possession
of the property is | ||||||
16 | transferred but the seller retains the title as security
for | ||||||
17 | payment of the selling price are sales.
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18 | "Sale at retail" shall also be construed to include any | ||||||
19 | Illinois
florist's sales transaction in which the purchase | ||||||
20 | order is received in
Illinois by a florist and the sale is for | ||||||
21 | use or consumption, but the
Illinois florist has a florist in | ||||||
22 | another state deliver the property to the
purchaser or the | ||||||
23 | purchaser's donee in such other state.
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24 | Nonreusable tangible personal property that is used by | ||||||
25 | persons engaged in
the business of operating a restaurant, | ||||||
26 | cafeteria, or drive-in is a sale for
resale when it is |
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1 | transferred to customers in the ordinary course of business
as | ||||||
2 | part of the sale of food or beverages and is used to deliver, | ||||||
3 | package, or
consume food or beverages, regardless of where | ||||||
4 | consumption of the food or
beverages occurs. Examples of those | ||||||
5 | items include, but are not limited to
nonreusable, paper and | ||||||
6 | plastic cups, plates, baskets, boxes, sleeves, buckets
or other | ||||||
7 | containers, utensils, straws, placemats, napkins, doggie bags, | ||||||
8 | and
wrapping or packaging
materials that are transferred to | ||||||
9 | customers as part of the sale of food or
beverages in the | ||||||
10 | ordinary course of business.
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11 | The purchase, employment and transfer of such tangible | ||||||
12 | personal property
as newsprint and ink for the primary purpose | ||||||
13 | of conveying news (with or
without other information) is not a | ||||||
14 | purchase, use or sale of tangible
personal property.
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15 | "Selling price" means the consideration for a sale valued | ||||||
16 | in money
whether received in money or otherwise, including | ||||||
17 | cash, credits, property
other than as hereinafter provided, and | ||||||
18 | services, but not including the
value of or credit given for | ||||||
19 | traded-in tangible personal property where the
item that is | ||||||
20 | traded-in is of like kind and character as that which is being
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21 | sold, and shall be determined without any deduction on account | ||||||
22 | of the cost
of the property sold, the cost of materials used, | ||||||
23 | labor or service cost or
any other expense whatsoever, but does | ||||||
24 | not include interest or finance
charges which appear as | ||||||
25 | separate items on the bill of sale or sales
contract nor | ||||||
26 | charges that are added to prices by sellers on account of the
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1 | seller's tax liability under the "Retailers' Occupation Tax | ||||||
2 | Act", or on
account of the seller's duty to collect, from the | ||||||
3 | purchaser, the tax that
is imposed by this Act, or, except as | ||||||
4 | otherwise provided with respect to any cigarette tax imposed by | ||||||
5 | a home rule unit, on account of the seller's tax liability | ||||||
6 | under any local occupation tax administered by the Department, | ||||||
7 | or, except as otherwise provided with respect to any cigarette | ||||||
8 | tax imposed by a home rule unit on account of the seller's duty | ||||||
9 | to collect, from the purchasers, the tax that is imposed under | ||||||
10 | any local use tax administered by the Department. Effective | ||||||
11 | December 1, 1985, "selling price"
shall include charges that | ||||||
12 | are added to prices by sellers on account of the
seller's tax | ||||||
13 | liability under the Cigarette Tax Act, on account of the | ||||||
14 | seller's
duty to collect, from the purchaser, the tax imposed | ||||||
15 | under the Cigarette Use
Tax Act, and on account of the seller's | ||||||
16 | duty to collect, from the purchaser,
any cigarette tax imposed | ||||||
17 | by a home rule unit.
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18 | Notwithstanding any law to the contrary, for any motor | ||||||
19 | vehicle, as defined in Section 1-146 of the Vehicle Code, that | ||||||
20 | is sold on or after January 1, 2015 for the purpose of leasing | ||||||
21 | the vehicle for a defined period that is longer than one year | ||||||
22 | and (1) is a motor vehicle of the second division that: (A) is | ||||||
23 | a self-contained motor vehicle designed or permanently | ||||||
24 | converted to provide living quarters for recreational, | ||||||
25 | camping, or travel use, with direct walk through access to the | ||||||
26 | living quarters from the driver's seat; (B) is of the van |
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1 | configuration designed for the transportation of not less than | ||||||
2 | 7 nor more than 16 passengers; or (C) has a gross vehicle | ||||||
3 | weight rating of 8,000 pounds or less or (2) is a motor vehicle | ||||||
4 | of the first division, "selling price" or "amount of sale" | ||||||
5 | means the consideration received by the lessor pursuant to the | ||||||
6 | lease contract, including amounts due at lease signing and all | ||||||
7 | monthly or other regular payments charged over the term of the | ||||||
8 | lease. Also included in the selling price is any amount | ||||||
9 | received by the lessor from the lessee for the leased vehicle | ||||||
10 | that is not calculated at the time the lease is executed, | ||||||
11 | including, but not limited to, excess mileage charges and | ||||||
12 | charges for excess wear and tear. For sales that occur in | ||||||
13 | Illinois, with respect to any amount received by the lessor | ||||||
14 | from the lessee for the leased vehicle that is not calculated | ||||||
15 | at the time the lease is executed, the lessor who purchased the | ||||||
16 | motor vehicle does not incur the tax imposed by the Use Tax Act | ||||||
17 | on those amounts, and the retailer who makes the retail sale of | ||||||
18 | the motor vehicle to the lessor is not required to collect the | ||||||
19 | tax imposed by this Act or to pay the tax imposed by the | ||||||
20 | Retailers' Occupation Tax Act on those amounts. However, the | ||||||
21 | lessor who purchased the motor vehicle assumes the liability | ||||||
22 | for reporting and paying the tax on those amounts directly to | ||||||
23 | the Department in the same form (Illinois Retailers' Occupation | ||||||
24 | Tax, and local retailers' occupation taxes, if applicable) in | ||||||
25 | which the retailer would have reported and paid such tax if the | ||||||
26 | retailer had accounted for the tax to the Department. For |
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1 | amounts received by the lessor from the lessee that are not | ||||||
2 | calculated at the time the lease is executed, the lessor must | ||||||
3 | file the return and pay the tax to the Department by the due | ||||||
4 | date otherwise required by this Act for returns other than | ||||||
5 | transaction returns. If the retailer is entitled under this Act | ||||||
6 | to a discount for collecting and remitting the tax imposed | ||||||
7 | under this Act to the Department with respect to the sale of | ||||||
8 | the motor vehicle to the lessor, then the right to the discount | ||||||
9 | provided in this Act shall be transferred to the lessor with | ||||||
10 | respect to the tax paid by the lessor for any amount received | ||||||
11 | by the lessor from the lessee for the leased vehicle that is | ||||||
12 | not calculated at the time the lease is executed; provided that | ||||||
13 | the discount is only allowed if the return is timely filed and | ||||||
14 | for amounts timely paid. The "selling price" of a motor vehicle | ||||||
15 | that is sold on or after January 1, 2015 for the purpose of | ||||||
16 | leasing for a defined period of longer than one year shall not | ||||||
17 | be reduced by the value of or credit given for traded-in | ||||||
18 | tangible personal property owned by the lessor, nor shall it be | ||||||
19 | reduced by the value of or credit given for traded-in tangible | ||||||
20 | personal property owned by the lessee, regardless of whether | ||||||
21 | the trade-in value thereof is assigned by the lessee to the | ||||||
22 | lessor. In the case of a motor vehicle that is sold for the | ||||||
23 | purpose of leasing for a defined period of longer than one | ||||||
24 | year, the sale occurs at the time of the delivery of the | ||||||
25 | vehicle, regardless of the due date of any lease payments. A | ||||||
26 | lessor who incurs a Retailers' Occupation Tax liability on the |
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1 | sale of a motor vehicle coming off lease may not take a credit | ||||||
2 | against that liability for the Use Tax the lessor paid upon the | ||||||
3 | purchase of the motor vehicle (or for any tax the lessor paid | ||||||
4 | with respect to any amount received by the lessor from the | ||||||
5 | lessee for the leased vehicle that was not calculated at the | ||||||
6 | time the lease was executed) if the selling price of the motor | ||||||
7 | vehicle at the time of purchase was calculated using the | ||||||
8 | definition of "selling price" as defined in this paragraph. | ||||||
9 | Notwithstanding any other provision of this Act to the | ||||||
10 | contrary, lessors shall file all returns and make all payments | ||||||
11 | required under this paragraph to the Department by electronic | ||||||
12 | means in the manner and form as required by the Department. | ||||||
13 | This paragraph does not apply to leases of motor vehicles for | ||||||
14 | which, at the time the lease is entered into, the term of the | ||||||
15 | lease is not a defined period, including leases with a defined | ||||||
16 | initial period with the option to continue the lease on a | ||||||
17 | month-to-month or other basis beyond the initial defined | ||||||
18 | period. | ||||||
19 | The phrase "like kind and character" shall be liberally | ||||||
20 | construed
(including but not limited to any form of motor | ||||||
21 | vehicle for any form of
motor vehicle, or any kind of farm or | ||||||
22 | agricultural implement for any other
kind of farm or | ||||||
23 | agricultural implement), while not including a kind of item
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24 | which, if sold at retail by that retailer, would be exempt from | ||||||
25 | retailers'
occupation tax and use tax as an isolated or | ||||||
26 | occasional sale.
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1 | "Department" means the Department of Revenue.
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2 | "Person" means any natural individual, firm, partnership, | ||||||
3 | association,
joint stock company, joint adventure, public or | ||||||
4 | private corporation, limited
liability company, or a
receiver, | ||||||
5 | executor, trustee, guardian or other representative appointed
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6 | by order of any court.
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7 | "Retailer" means and includes every person engaged in the | ||||||
8 | business of
making sales at retail as defined in this Section.
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9 | A person who holds himself or herself out as being engaged | ||||||
10 | (or who habitually
engages) in selling tangible personal | ||||||
11 | property at retail is a retailer
hereunder with respect to such | ||||||
12 | sales (and not primarily in a service
occupation) | ||||||
13 | notwithstanding the fact that such person designs and produces
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14 | such tangible personal property on special order for the | ||||||
15 | purchaser and in
such a way as to render the property of value | ||||||
16 | only to such purchaser, if
such tangible personal property so | ||||||
17 | produced on special order serves
substantially the same | ||||||
18 | function as stock or standard items of tangible
personal | ||||||
19 | property that are sold at retail.
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20 | A person whose activities are organized and conducted | ||||||
21 | primarily as a
not-for-profit service enterprise, and who | ||||||
22 | engages in selling tangible
personal property at retail | ||||||
23 | (whether to the public or merely to members and
their guests) | ||||||
24 | is a retailer with respect to such transactions, excepting
only | ||||||
25 | a person organized and operated exclusively for charitable, | ||||||
26 | religious
or educational purposes either (1), to the extent of |
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1 | sales by such person
to its members, students, patients or | ||||||
2 | inmates of tangible personal property
to be used primarily for | ||||||
3 | the purposes of such person, or (2), to the extent
of sales by | ||||||
4 | such person of tangible personal property which is not sold or
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5 | offered for sale by persons organized for profit. The selling | ||||||
6 | of school
books and school supplies by schools at retail to | ||||||
7 | students is not
"primarily for the purposes of" the school | ||||||
8 | which does such selling. This
paragraph does not apply to nor | ||||||
9 | subject to taxation occasional dinners,
social or similar | ||||||
10 | activities of a person organized and operated exclusively
for | ||||||
11 | charitable, religious or educational purposes, whether or not | ||||||
12 | such
activities are open to the public.
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13 | A person who is the recipient of a grant or contract under | ||||||
14 | Title VII of
the Older Americans Act of 1965 (P.L. 92-258) and | ||||||
15 | serves meals to
participants in the federal Nutrition Program | ||||||
16 | for the Elderly in return for
contributions established in | ||||||
17 | amount by the individual participant pursuant
to a schedule of | ||||||
18 | suggested fees as provided for in the federal Act is not a
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19 | retailer under this Act with respect to such transactions.
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20 | Persons who engage in the business of transferring tangible | ||||||
21 | personal
property upon the redemption of trading stamps are | ||||||
22 | retailers hereunder when
engaged in such business.
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23 | The isolated or occasional sale of tangible personal | ||||||
24 | property at retail
by a person who does not hold himself out as | ||||||
25 | being engaged (or who does not
habitually engage) in selling | ||||||
26 | such tangible personal property at retail or
a sale through a |
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1 | bulk vending machine does not make such person a retailer
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2 | hereunder. However, any person who is engaged in a business | ||||||
3 | which is not
subject to the tax imposed by the "Retailers' | ||||||
4 | Occupation Tax Act" because
of involving the sale of or a | ||||||
5 | contract to sell real estate or a
construction contract to | ||||||
6 | improve real estate, but who, in the course of
conducting such | ||||||
7 | business, transfers tangible personal property to users or
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8 | consumers in the finished form in which it was purchased, and | ||||||
9 | which does
not become real estate, under any provision of a | ||||||
10 | construction contract or
real estate sale or real estate sales | ||||||
11 | agreement entered into with some
other person arising out of or | ||||||
12 | because of such nontaxable business, is a
retailer to the | ||||||
13 | extent of the value of the tangible personal property so
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14 | transferred. If, in such transaction, a separate charge is made | ||||||
15 | for the
tangible personal property so transferred, the value of | ||||||
16 | such property, for
the purposes of this Act, is the amount so | ||||||
17 | separately charged, but not less
than the cost of such property | ||||||
18 | to the transferor; if no separate charge is
made, the value of | ||||||
19 | such property, for the purposes of this Act, is the cost
to the | ||||||
20 | transferor of such tangible personal property.
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21 | Notwithstanding any other provision of law, a | ||||||
22 | not-for-profit organization that (i) has received an exemption | ||||||
23 | under Section 501(c)(3) of the Internal Revenue Code, (ii) has | ||||||
24 | gross receipts of no more than $10,000 per year, and (iii) is | ||||||
25 | organized and operated exclusively for charitable, religious, | ||||||
26 | or educational purposes is not considered a retailer for the |
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1 | purposes of this Act. | ||||||
2 | "Retailer maintaining a place of business in this State", | ||||||
3 | or any like
term, means and includes any of the following | ||||||
4 | retailers:
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5 | 1. A retailer having or maintaining within this State, | ||||||
6 | directly or by
a subsidiary, an office, distribution house, | ||||||
7 | sales house, warehouse or other
place of business, or any | ||||||
8 | agent or other representative operating within this
State | ||||||
9 | under the authority of the retailer or its subsidiary, | ||||||
10 | irrespective of
whether such place of business or agent or | ||||||
11 | other representative is located here
permanently or | ||||||
12 | temporarily, or whether such retailer or subsidiary is | ||||||
13 | licensed
to do business in this State. However, the | ||||||
14 | ownership of property that is
located at the premises of a | ||||||
15 | printer with which the retailer has contracted for
printing | ||||||
16 | and that consists of the final printed product, property | ||||||
17 | that becomes
a part of the final printed product, or copy | ||||||
18 | from which the printed product is
produced shall not result | ||||||
19 | in the retailer being deemed to have or maintain an
office, | ||||||
20 | distribution house, sales house, warehouse, or other place | ||||||
21 | of business
within this State. | ||||||
22 | 1.1. A retailer having a contract with a person located | ||||||
23 | in this State under which the person, for a commission or | ||||||
24 | other consideration based upon the sale of tangible | ||||||
25 | personal property by the retailer, directly or indirectly | ||||||
26 | refers potential customers to the retailer by providing to |
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1 | the potential customers a promotional code or other | ||||||
2 | mechanism that allows the retailer to track purchases | ||||||
3 | referred by such persons. Examples of mechanisms that allow | ||||||
4 | the retailer to track purchases referred by such persons | ||||||
5 | include but are not limited to the use of a link on the | ||||||
6 | person's Internet website, promotional codes distributed | ||||||
7 | through the person's hand-delivered or mailed material, | ||||||
8 | and promotional codes distributed by the person through | ||||||
9 | radio or other broadcast media. The provisions of this | ||||||
10 | paragraph 1.1 shall apply only if the cumulative gross | ||||||
11 | receipts from sales of tangible personal property by the | ||||||
12 | retailer to customers who are referred to the retailer by | ||||||
13 | all persons in this State under such contracts exceed | ||||||
14 | $10,000 during the preceding 4 quarterly periods ending on | ||||||
15 | the last day of March, June, September, and December. A | ||||||
16 | retailer meeting the requirements of this paragraph 1.1 | ||||||
17 | shall be presumed to be maintaining a place of business in | ||||||
18 | this State but may rebut this presumption by submitting | ||||||
19 | proof that the referrals or other activities pursued within | ||||||
20 | this State by such persons were not sufficient to meet the | ||||||
21 | nexus standards of the United States Constitution during | ||||||
22 | the preceding 4 quarterly periods. | ||||||
23 | 1.2. Beginning July 1, 2011, a retailer having a | ||||||
24 | contract with a person located in this State under which: | ||||||
25 | A. the retailer sells the same or substantially | ||||||
26 | similar line of products as the person located in this |
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1 | State and does so using an identical or substantially | ||||||
2 | similar name, trade name, or trademark as the person | ||||||
3 | located in this State; and | ||||||
4 | B. the retailer provides a commission or other | ||||||
5 | consideration to the person located in this State based | ||||||
6 | upon the sale of tangible personal property by the | ||||||
7 | retailer. | ||||||
8 | The provisions of this paragraph 1.2 shall apply only if | ||||||
9 | the cumulative gross receipts from sales of tangible | ||||||
10 | personal property by the retailer to customers in this | ||||||
11 | State under all such contracts exceed $10,000 during the | ||||||
12 | preceding 4 quarterly periods ending on the last day of | ||||||
13 | March, June, September, and December.
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14 | 2. A retailer soliciting orders for tangible personal | ||||||
15 | property by
means of a telecommunication or television | ||||||
16 | shopping system (which utilizes toll
free numbers) which is | ||||||
17 | intended by the retailer to be broadcast by cable
| ||||||
18 | television or other means of broadcasting, to consumers | ||||||
19 | located in this State.
| ||||||
20 | 3. A retailer, pursuant to a contract with a | ||||||
21 | broadcaster or publisher
located in this State, soliciting | ||||||
22 | orders for tangible personal property by
means of | ||||||
23 | advertising which is disseminated primarily to consumers | ||||||
24 | located in
this State and only secondarily to bordering | ||||||
25 | jurisdictions.
| ||||||
26 | 4. A retailer soliciting orders for tangible personal |
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1 | property by mail
if the solicitations are substantial and | ||||||
2 | recurring and if the retailer benefits
from any banking, | ||||||
3 | financing, debt collection, telecommunication, or | ||||||
4 | marketing
activities occurring in this State or benefits | ||||||
5 | from the location in this State
of authorized installation, | ||||||
6 | servicing, or repair facilities.
| ||||||
7 | 5. A retailer that is owned or controlled by the same | ||||||
8 | interests that own
or control any retailer engaging in | ||||||
9 | business in the same or similar line of
business in this | ||||||
10 | State.
| ||||||
11 | 6. A retailer having a franchisee or licensee operating | ||||||
12 | under its trade
name if the franchisee or licensee is | ||||||
13 | required to collect the tax under this
Section.
| ||||||
14 | 7. A retailer, pursuant to a contract with a cable | ||||||
15 | television operator
located in this State, soliciting | ||||||
16 | orders for tangible personal property by
means of | ||||||
17 | advertising which is transmitted or distributed over a | ||||||
18 | cable
television system in this State.
| ||||||
19 | 8. A retailer engaging in activities in Illinois, which | ||||||
20 | activities in
the state in which the retail business | ||||||
21 | engaging in such activities is located
would constitute | ||||||
22 | maintaining a place of business in that state.
| ||||||
23 | "Bulk vending machine" means a vending machine,
containing | ||||||
24 | unsorted confections, nuts, toys, or other items designed
| ||||||
25 | primarily to be used or played with by children
which, when a | ||||||
26 | coin or coins of a denomination not larger than $0.50 are |
| |||||||
| |||||||
1 | inserted, are dispensed in equal portions, at random and
| ||||||
2 | without selection by the customer.
| ||||||
3 | (Source: P.A. 98-628, eff. 1-1-15; 98-1080, eff. 8-26-14; | ||||||
4 | 98-1089, eff. 1-1-15; revised 10-1-14.)
| ||||||
5 | Section 10. The Service Use Tax Act is amended by changing | ||||||
6 | Section 2 as follows:
| ||||||
7 | (35 ILCS 110/2) (from Ch. 120, par. 439.32)
| ||||||
8 | Sec. 2. Definitions. | ||||||
9 | "Use" means the exercise by any person of any right or | ||||||
10 | power
over tangible personal property incident to the ownership | ||||||
11 | of that
property, but does not include the sale or use for | ||||||
12 | demonstration by him
of that property in any form as tangible | ||||||
13 | personal property in the
regular course of business.
"Use" does | ||||||
14 | not mean the interim
use of
tangible personal property nor the | ||||||
15 | physical incorporation of tangible
personal property, as an | ||||||
16 | ingredient or constituent, into other tangible
personal | ||||||
17 | property, (a) which is sold in the regular course of business
| ||||||
18 | or (b) which the person incorporating such ingredient or | ||||||
19 | constituent
therein has undertaken at the time of such purchase | ||||||
20 | to cause to be
transported in interstate commerce to | ||||||
21 | destinations outside the State of
Illinois.
| ||||||
22 | "Purchased from a serviceman" means the acquisition of the | ||||||
23 | ownership
of, or title to, tangible personal property through a | ||||||
24 | sale of service.
|
| |||||||
| |||||||
1 | "Purchaser" means any person who, through a sale of | ||||||
2 | service, acquires
the ownership of, or title to, any tangible | ||||||
3 | personal property.
| ||||||
4 | "Cost price" means the consideration paid by the serviceman | ||||||
5 | for a
purchase valued in money, whether paid in money or | ||||||
6 | otherwise, including
cash, credits and services, and shall be | ||||||
7 | determined without any
deduction on account of the supplier's | ||||||
8 | cost of the property sold or on
account of any other expense | ||||||
9 | incurred by the supplier. When a serviceman
contracts out part | ||||||
10 | or all of the services required in his sale of service,
it | ||||||
11 | shall be presumed that the cost price to the serviceman of the | ||||||
12 | property
transferred to him or her by his or her subcontractor | ||||||
13 | is equal to 50% of
the subcontractor's charges to the | ||||||
14 | serviceman in the absence of proof of
the consideration paid by | ||||||
15 | the subcontractor for the purchase of such property.
| ||||||
16 | "Selling price" means the consideration for a sale valued | ||||||
17 | in money
whether received in money or otherwise, including | ||||||
18 | cash, credits and
service, and shall be determined without any | ||||||
19 | deduction on account of the
serviceman's cost of the property | ||||||
20 | sold, the cost of materials used,
labor or service cost or any | ||||||
21 | other expense whatsoever, but does not
include interest or | ||||||
22 | finance charges which appear as separate items on
the bill of | ||||||
23 | sale or sales contract nor charges that are added to prices
by | ||||||
24 | sellers on account of the seller's duty to collect, from the
| ||||||
25 | purchaser, the tax that is imposed by this Act.
| ||||||
26 | "Department" means the Department of Revenue.
|
| |||||||
| |||||||
1 | "Person" means any natural individual, firm, partnership,
| ||||||
2 | association, joint stock company, joint venture, public or | ||||||
3 | private
corporation, limited liability company, and any | ||||||
4 | receiver, executor, trustee,
guardian or other representative | ||||||
5 | appointed by order of any court.
| ||||||
6 | "Sale of service" means any transaction except:
| ||||||
7 | (1) a retail sale of tangible personal property taxable | ||||||
8 | under the
Retailers' Occupation Tax Act or under the Use | ||||||
9 | Tax Act.
| ||||||
10 | (2) a sale of tangible personal property for the | ||||||
11 | purpose of resale
made in compliance with Section 2c of the | ||||||
12 | Retailers' Occupation Tax Act.
| ||||||
13 | (3) except as hereinafter provided, a sale or transfer | ||||||
14 | of tangible
personal property as an incident to the | ||||||
15 | rendering of service for or by
any governmental body, or | ||||||
16 | for or by any corporation, society,
association, | ||||||
17 | foundation or institution organized and operated
| ||||||
18 | exclusively for charitable, religious or educational | ||||||
19 | purposes or any
not-for-profit corporation, society, | ||||||
20 | association, foundation,
institution or organization which | ||||||
21 | has no compensated officers or
employees and which is | ||||||
22 | organized and operated primarily for the
recreation of | ||||||
23 | persons 55 years of age or older. A limited liability | ||||||
24 | company
may qualify for the exemption under this paragraph | ||||||
25 | only if the limited
liability company is organized and | ||||||
26 | operated exclusively for educational
purposes.
|
| |||||||
| |||||||
1 | (4) a sale or transfer of tangible personal
property as | ||||||
2 | an incident to the
rendering of service for interstate | ||||||
3 | carriers for hire for use as rolling stock
moving in | ||||||
4 | interstate commerce or by lessors under a lease of one year | ||||||
5 | or
longer, executed or in effect at the time of purchase of | ||||||
6 | personal property, to
interstate carriers for hire for use | ||||||
7 | as rolling stock moving in interstate
commerce so long as | ||||||
8 | so used by such interstate carriers for hire, and equipment
| ||||||
9 | operated by a telecommunications provider, licensed as a | ||||||
10 | common carrier by the
Federal Communications Commission, | ||||||
11 | which is permanently installed in or affixed
to aircraft | ||||||
12 | moving in interstate commerce.
| ||||||
13 | (4a) a sale or transfer of tangible personal
property | ||||||
14 | as an incident
to the rendering of service for owners, | ||||||
15 | lessors, or shippers of tangible
personal property which is | ||||||
16 | utilized by interstate carriers for hire for
use as rolling | ||||||
17 | stock moving in interstate commerce so long as so used by
| ||||||
18 | interstate carriers for hire, and equipment operated by a
| ||||||
19 | telecommunications provider, licensed as a common carrier | ||||||
20 | by the Federal
Communications Commission, which is | ||||||
21 | permanently installed in or affixed to
aircraft moving in | ||||||
22 | interstate commerce.
| ||||||
23 | (4a-5) on and after July 1, 2003 and through June 30, | ||||||
24 | 2004, a sale or transfer of a motor vehicle
of
the
second | ||||||
25 | division with a gross vehicle weight in excess of 8,000 | ||||||
26 | pounds as an
incident to the rendering of service if that |
| |||||||
| |||||||
1 | motor
vehicle is subject
to the commercial distribution fee | ||||||
2 | imposed under Section 3-815.1 of the
Illinois Vehicle
Code. | ||||||
3 | Beginning on July 1, 2004 and through June 30, 2005, the | ||||||
4 | use in this State of motor vehicles of the second division: | ||||||
5 | (i) with a gross vehicle weight rating in excess of 8,000 | ||||||
6 | pounds; (ii) that are subject to the commercial | ||||||
7 | distribution fee imposed under Section 3-815.1 of the | ||||||
8 | Illinois Vehicle Code; and (iii) that are primarily used | ||||||
9 | for commercial purposes. Through June 30, 2005, this
| ||||||
10 | exemption applies to repair and replacement parts added | ||||||
11 | after the
initial
purchase of such a motor vehicle if that | ||||||
12 | motor vehicle is used in a manner that
would
qualify for | ||||||
13 | the rolling stock exemption otherwise provided for in this | ||||||
14 | Act. For purposes of this paragraph, "used for commercial | ||||||
15 | purposes" means the transportation of persons or property | ||||||
16 | in furtherance of any commercial or industrial enterprise | ||||||
17 | whether for-hire or not.
| ||||||
18 | (5) a sale or transfer of machinery and equipment used | ||||||
19 | primarily in the
process of the manufacturing or | ||||||
20 | assembling, either in an existing, an expanded
or a new | ||||||
21 | manufacturing facility, of tangible personal property for | ||||||
22 | wholesale or
retail sale or lease, whether such sale or | ||||||
23 | lease is made directly by the
manufacturer or by some other | ||||||
24 | person, whether the materials used in the process
are owned | ||||||
25 | by the manufacturer or some other person, or whether such | ||||||
26 | sale or
lease is made apart from or as an incident to the |
| |||||||
| |||||||
1 | seller's engaging in a
service occupation and the | ||||||
2 | applicable tax is a Service Use Tax or Service
Occupation | ||||||
3 | Tax, rather than Use Tax or Retailers' Occupation Tax. The | ||||||
4 | exemption provided by this paragraph (5) does not include | ||||||
5 | machinery and equipment used in (i) the generation of | ||||||
6 | electricity for wholesale or retail sale; (ii) the | ||||||
7 | generation or treatment of natural or artificial gas for | ||||||
8 | wholesale or retail sale that is delivered to customers | ||||||
9 | through pipes, pipelines, or mains; or (iii) the treatment | ||||||
10 | of water for wholesale or retail sale that is delivered to | ||||||
11 | customers through pipes, pipelines, or mains. The | ||||||
12 | provisions of this amendatory Act of the 98th General | ||||||
13 | Assembly are declaratory of existing law as to the meaning | ||||||
14 | and scope of this exemption.
| ||||||
15 | (5a) the repairing, reconditioning or remodeling, for | ||||||
16 | a
common carrier by rail, of tangible personal property | ||||||
17 | which belongs to such
carrier for hire, and as to which | ||||||
18 | such carrier receives the physical possession
of the | ||||||
19 | repaired, reconditioned or remodeled item of tangible | ||||||
20 | personal property
in Illinois, and which such carrier | ||||||
21 | transports, or shares with another common
carrier in the | ||||||
22 | transportation of such property, out of Illinois on a | ||||||
23 | standard
uniform bill of lading showing the person who | ||||||
24 | repaired, reconditioned or
remodeled the property to a | ||||||
25 | destination outside Illinois, for use outside
Illinois.
| ||||||
26 | (5b) a sale or transfer of tangible personal property |
| |||||||
| |||||||
1 | which is produced by
the seller thereof on special order in | ||||||
2 | such a way as to have made the
applicable tax the Service | ||||||
3 | Occupation Tax or the Service Use Tax, rather than
the | ||||||
4 | Retailers' Occupation Tax or the Use Tax, for an interstate | ||||||
5 | carrier by rail
which receives the physical possession of | ||||||
6 | such property in Illinois, and which
transports such | ||||||
7 | property, or shares with another common carrier in the
| ||||||
8 | transportation of such property, out of Illinois on a | ||||||
9 | standard uniform bill of
lading showing the seller of the | ||||||
10 | property as the shipper or consignor of such
property to a | ||||||
11 | destination outside Illinois, for use outside Illinois.
| ||||||
12 | (6) until July 1, 2003, a sale or transfer of | ||||||
13 | distillation machinery
and equipment, sold
as a unit or kit | ||||||
14 | and assembled or installed by the retailer, which
machinery | ||||||
15 | and equipment is certified by the user to be used only for | ||||||
16 | the
production of ethyl alcohol that will be used for | ||||||
17 | consumption as motor fuel
or as a component of motor fuel | ||||||
18 | for the personal use of such user and not
subject to sale | ||||||
19 | or resale.
| ||||||
20 | (7) at the election of any serviceman not required to | ||||||
21 | be
otherwise registered as a retailer under Section 2a of | ||||||
22 | the Retailers'
Occupation Tax Act, made for each fiscal | ||||||
23 | year sales
of service in which the aggregate annual cost | ||||||
24 | price of tangible
personal property transferred as an | ||||||
25 | incident to the sales of service is
less than 35%, or 75% | ||||||
26 | in the case of servicemen transferring prescription
drugs |
| |||||||
| |||||||
1 | or servicemen engaged in graphic arts production, of the | ||||||
2 | aggregate
annual total gross receipts from all sales of | ||||||
3 | service. The purchase of
such tangible personal property by | ||||||
4 | the serviceman shall be subject to tax
under the Retailers' | ||||||
5 | Occupation Tax Act and the Use Tax Act.
However, if a
| ||||||
6 | primary serviceman who has made the election described in | ||||||
7 | this paragraph
subcontracts service work to a secondary | ||||||
8 | serviceman who has also made the
election described in this | ||||||
9 | paragraph, the primary serviceman does not
incur a Use Tax | ||||||
10 | liability if the secondary serviceman (i) has paid or will | ||||||
11 | pay
Use
Tax on his or her cost price of any tangible | ||||||
12 | personal property transferred
to the primary serviceman | ||||||
13 | and (ii) certifies that fact in writing to the
primary
| ||||||
14 | serviceman.
| ||||||
15 | Tangible personal property transferred incident to the | ||||||
16 | completion of a
maintenance agreement is exempt from the tax | ||||||
17 | imposed pursuant to this Act.
| ||||||
18 | Exemption (5) also includes machinery and equipment used in | ||||||
19 | the general
maintenance or repair of such exempt machinery and | ||||||
20 | equipment or for in-house
manufacture of exempt machinery and | ||||||
21 | equipment. The machinery and equipment exemption does not | ||||||
22 | include machinery and equipment used in (i) the generation of | ||||||
23 | electricity for wholesale or retail sale; (ii) the generation | ||||||
24 | or treatment of natural or artificial gas for wholesale or | ||||||
25 | retail sale that is delivered to customers through pipes, | ||||||
26 | pipelines, or mains; or (iii) the treatment of water for |
| |||||||
| |||||||
1 | wholesale or retail sale that is delivered to customers through | ||||||
2 | pipes, pipelines, or mains. The provisions of this amendatory | ||||||
3 | Act of the 98th General Assembly are declaratory of existing | ||||||
4 | law as to the meaning and scope of this exemption. For the | ||||||
5 | purposes of exemption
(5), each of these terms shall have the | ||||||
6 | following meanings: (1) "manufacturing
process" shall mean the | ||||||
7 | production of any article of tangible personal
property, | ||||||
8 | whether such article is a finished product or an article for | ||||||
9 | use in
the process of manufacturing or assembling a different | ||||||
10 | article of tangible
personal property, by procedures commonly | ||||||
11 | regarded as manufacturing,
processing, fabricating, or | ||||||
12 | refining which changes some existing
material or materials into | ||||||
13 | a material with a different form, use or
name. In relation to a | ||||||
14 | recognized integrated business composed of a
series of | ||||||
15 | operations which collectively constitute manufacturing, or
| ||||||
16 | individually constitute manufacturing operations, the | ||||||
17 | manufacturing
process shall be deemed to commence with the | ||||||
18 | first operation or stage of
production in the series, and shall | ||||||
19 | not be deemed to end until the
completion of the final product | ||||||
20 | in the last operation or stage of
production in the series; and | ||||||
21 | further, for purposes of exemption (5),
photoprocessing is | ||||||
22 | deemed to be a manufacturing process of tangible
personal | ||||||
23 | property for wholesale or retail sale; (2) "assembling process" | ||||||
24 | shall
mean the production of any article of tangible personal | ||||||
25 | property, whether such
article is a finished product or an | ||||||
26 | article for use in the process of
manufacturing or assembling a |
| |||||||
| |||||||
1 | different article of tangible personal
property, by the | ||||||
2 | combination of existing materials in a manner commonly
regarded | ||||||
3 | as assembling which results in a material of a different form,
| ||||||
4 | use or name; (3) "machinery" shall mean major mechanical | ||||||
5 | machines or
major components of such machines contributing to a | ||||||
6 | manufacturing or
assembling process; and (4) "equipment" shall | ||||||
7 | include any independent
device or tool separate from any | ||||||
8 | machinery but essential to an
integrated manufacturing or | ||||||
9 | assembly process; including computers
used primarily in a | ||||||
10 | manufacturer's computer
assisted design, computer assisted | ||||||
11 | manufacturing (CAD/CAM) system;
or any subunit or assembly | ||||||
12 | comprising a component of any machinery or
auxiliary, adjunct | ||||||
13 | or attachment parts of machinery, such as tools, dies,
jigs, | ||||||
14 | fixtures, patterns and molds; or any parts which require | ||||||
15 | periodic
replacement in the course of normal operation; but | ||||||
16 | shall not include hand
tools.
Equipment includes chemicals or | ||||||
17 | chemicals acting as catalysts but only if the
chemicals or | ||||||
18 | chemicals acting as catalysts effect a direct and immediate | ||||||
19 | change
upon a
product being manufactured or assembled for | ||||||
20 | wholesale or retail sale or
lease.
The purchaser of such | ||||||
21 | machinery and equipment who has an active
resale registration | ||||||
22 | number shall furnish such number to the seller at the
time of | ||||||
23 | purchase. The user of such machinery and equipment and tools
| ||||||
24 | without an active resale registration number shall prepare a | ||||||
25 | certificate of
exemption for each transaction stating facts | ||||||
26 | establishing the exemption for
that transaction, which |
| |||||||
| |||||||
1 | certificate shall be available to the Department
for inspection | ||||||
2 | or audit. The Department shall prescribe the form of the
| ||||||
3 | certificate.
| ||||||
4 | Any informal rulings, opinions or letters issued by the | ||||||
5 | Department in
response to an inquiry or request for any opinion | ||||||
6 | from any person
regarding the coverage and applicability of | ||||||
7 | exemption (5) to specific
devices shall be published, | ||||||
8 | maintained as a public record, and made
available for public | ||||||
9 | inspection and copying. If the informal ruling,
opinion or | ||||||
10 | letter contains trade secrets or other confidential
| ||||||
11 | information, where possible the Department shall delete such | ||||||
12 | information
prior to publication. Whenever such informal | ||||||
13 | rulings, opinions, or
letters contain any policy of general | ||||||
14 | applicability, the Department
shall formulate and adopt such | ||||||
15 | policy as a rule in accordance with the
provisions of the | ||||||
16 | Illinois Administrative Procedure Act.
| ||||||
17 | On and after July 1, 1987, no entity otherwise eligible | ||||||
18 | under exemption
(3) of this Section shall make tax free | ||||||
19 | purchases unless it has an active
exemption identification | ||||||
20 | number issued by the Department.
| ||||||
21 | The purchase, employment and transfer of such tangible | ||||||
22 | personal
property as newsprint and ink for the primary purpose | ||||||
23 | of conveying news
(with or without other information) is not a | ||||||
24 | purchase, use or sale of
service or of tangible personal | ||||||
25 | property within the meaning of this Act.
| ||||||
26 | "Serviceman" means any person who is engaged in the |
| |||||||
| |||||||
1 | occupation of
making sales of service.
| ||||||
2 | Notwithstanding any other provision of law, a | ||||||
3 | not-for-profit organization that (i) has received an exemption | ||||||
4 | under Section 501(c)(3) of the Internal Revenue Code, (ii) has | ||||||
5 | gross receipts of no more than $10,000 per year, and (iii) is | ||||||
6 | organized and operated exclusively for charitable, religious, | ||||||
7 | or educational purposes is not considered a serviceman for the | ||||||
8 | purposes of this Act. | ||||||
9 | "Sale at retail" means "sale at retail" as defined in the | ||||||
10 | Retailers'
Occupation Tax Act.
| ||||||
11 | "Supplier" means any person who makes sales of tangible | ||||||
12 | personal
property to servicemen for the purpose of resale as an | ||||||
13 | incident to a
sale of service.
| ||||||
14 | "Serviceman maintaining a place of business in this State", | ||||||
15 | or any
like term, means and includes any serviceman:
| ||||||
16 | 1. having or maintaining within this State, directly or | ||||||
17 | by a
subsidiary, an office, distribution house, sales | ||||||
18 | house, warehouse or
other place of business, or any agent | ||||||
19 | or other representative operating
within this State under | ||||||
20 | the authority of the serviceman or its
subsidiary, | ||||||
21 | irrespective of whether such place of business or agent or
| ||||||
22 | other representative is located here permanently or | ||||||
23 | temporarily, or
whether such serviceman or subsidiary is | ||||||
24 | licensed to do business in this
State; | ||||||
25 | 1.1. having a contract with a person located in this | ||||||
26 | State under which the person, for a commission or other |
| |||||||
| |||||||
1 | consideration based on the sale of service by the | ||||||
2 | serviceman, directly or indirectly refers potential | ||||||
3 | customers to the serviceman by providing to the potential | ||||||
4 | customers a promotional code or other mechanism that allows | ||||||
5 | the serviceman to track purchases referred by such persons. | ||||||
6 | Examples of mechanisms that allow the serviceman to track | ||||||
7 | purchases referred by such persons include but are not | ||||||
8 | limited to the use of a link on the person's Internet | ||||||
9 | website, promotional codes distributed through the | ||||||
10 | person's hand-delivered or mailed material, and | ||||||
11 | promotional codes distributed by the person through radio | ||||||
12 | or other broadcast media. The provisions of this paragraph | ||||||
13 | 1.1 shall apply only if the cumulative gross receipts from | ||||||
14 | sales of service by the serviceman to customers who are | ||||||
15 | referred to the serviceman by all persons in this State | ||||||
16 | under such contracts exceed $10,000 during the preceding 4 | ||||||
17 | quarterly periods ending on the last day of March, June, | ||||||
18 | September, and December; a serviceman meeting the | ||||||
19 | requirements of this paragraph 1.1 shall be presumed to be | ||||||
20 | maintaining a place of business in this State but may rebut | ||||||
21 | this presumption by submitting proof that the referrals or | ||||||
22 | other activities pursued within this State by such persons | ||||||
23 | were not sufficient to meet the nexus standards of the | ||||||
24 | United States Constitution during the preceding 4 | ||||||
25 | quarterly periods; | ||||||
26 | 1.2. beginning July 1, 2011, having a contract with a |
| |||||||
| |||||||
1 | person located in this State under which: | ||||||
2 | A. the serviceman sells the same or substantially | ||||||
3 | similar line of services as the person located in this | ||||||
4 | State and does so using an identical or substantially | ||||||
5 | similar name, trade name, or trademark as the person | ||||||
6 | located in this State; and | ||||||
7 | B. the serviceman provides a commission or other | ||||||
8 | consideration to the person located in this State based | ||||||
9 | upon the sale of services by the serviceman. | ||||||
10 | The provisions of this paragraph 1.2 shall apply only if | ||||||
11 | the cumulative gross receipts from sales of service by the | ||||||
12 | serviceman to customers in this State under all such | ||||||
13 | contracts exceed $10,000 during the preceding 4 quarterly | ||||||
14 | periods ending on the last day of March, June, September, | ||||||
15 | and December;
| ||||||
16 | 2. soliciting orders for tangible personal property by | ||||||
17 | means of a
telecommunication or television shopping system | ||||||
18 | (which utilizes toll free
numbers) which is intended by the | ||||||
19 | retailer to be broadcast by cable
television or other means | ||||||
20 | of broadcasting, to consumers located in this State;
| ||||||
21 | 3. pursuant to a contract with a broadcaster or | ||||||
22 | publisher located in this
State, soliciting orders for | ||||||
23 | tangible personal property by means of advertising
which is | ||||||
24 | disseminated primarily to consumers located in this State | ||||||
25 | and only
secondarily to bordering jurisdictions;
| ||||||
26 | 4. soliciting orders for tangible personal property by |
| |||||||
| |||||||
1 | mail if the
solicitations are substantial and recurring and | ||||||
2 | if the retailer benefits
from any banking, financing, debt | ||||||
3 | collection, telecommunication, or
marketing activities | ||||||
4 | occurring in this State or benefits from the location
in | ||||||
5 | this State of authorized installation, servicing, or | ||||||
6 | repair facilities;
| ||||||
7 | 5. being owned or controlled by the same interests | ||||||
8 | which own or
control any retailer engaging in business in | ||||||
9 | the same or similar line of
business in this State;
| ||||||
10 | 6. having a franchisee or licensee operating under its | ||||||
11 | trade name if
the franchisee or licensee is required to | ||||||
12 | collect the tax under this Section;
| ||||||
13 | 7. pursuant to a contract with a cable television | ||||||
14 | operator located in
this State, soliciting orders for | ||||||
15 | tangible personal property by means of
advertising which is | ||||||
16 | transmitted or distributed over a cable television
system | ||||||
17 | in this State; or
| ||||||
18 | 8. engaging in activities in Illinois, which | ||||||
19 | activities in the
state in which the supply business | ||||||
20 | engaging in such activities is located
would constitute | ||||||
21 | maintaining a place of business in that state.
| ||||||
22 | (Source: P.A. 98-583, eff. 1-1-14; 98-1089, eff. 1-1-15.)
| ||||||
23 | Section 15. The Service Occupation Tax Act is amended by | ||||||
24 | changing Section 2 as follows:
|
| |||||||
| |||||||
1 | (35 ILCS 115/2) (from Ch. 120, par. 439.102)
| ||||||
2 | Sec. 2. "Transfer" means any transfer of the title to | ||||||
3 | property or of
the ownership of property whether or not the | ||||||
4 | transferor retains title as
security for the payment of amounts | ||||||
5 | due him from the transferee.
| ||||||
6 | "Cost Price" means the consideration paid by the serviceman | ||||||
7 | for a
purchase valued in money, whether paid in money or | ||||||
8 | otherwise, including
cash, credits and services, and shall be | ||||||
9 | determined without any deduction
on account of the supplier's | ||||||
10 | cost of the property sold or on account of any
other expense | ||||||
11 | incurred by the supplier. When a serviceman contracts out
part | ||||||
12 | or all of the services required in his sale of service, it | ||||||
13 | shall be
presumed that the cost price to the serviceman of the | ||||||
14 | property
transferred to him by his or her subcontractor is | ||||||
15 | equal to 50% of the
subcontractor's charges to the serviceman | ||||||
16 | in the absence of proof of the
consideration paid by the | ||||||
17 | subcontractor for the purchase of such
property.
| ||||||
18 | "Department" means the Department of Revenue.
| ||||||
19 | "Person" means any natural individual, firm, partnership, | ||||||
20 | association, joint
stock company, joint venture, public or | ||||||
21 | private corporation, limited liability
company, and any | ||||||
22 | receiver, executor, trustee, guardian or other representative
| ||||||
23 | appointed by order of any court.
| ||||||
24 | "Sale of Service" means any transaction except:
| ||||||
25 | (a) A retail sale of tangible personal property taxable | ||||||
26 | under the Retailers'
Occupation Tax Act or under the Use Tax |
| |||||||
| |||||||
1 | Act.
| ||||||
2 | (b) A sale of tangible personal property for the purpose of | ||||||
3 | resale made in
compliance with Section 2c of the Retailers' | ||||||
4 | Occupation Tax Act.
| ||||||
5 | (c) Except as hereinafter provided, a sale or transfer of | ||||||
6 | tangible personal
property as an incident to the rendering of | ||||||
7 | service for or by any governmental
body or for or by any | ||||||
8 | corporation, society, association, foundation or
institution | ||||||
9 | organized and operated exclusively for charitable, religious | ||||||
10 | or
educational purposes or any not-for-profit corporation, | ||||||
11 | society, association,
foundation, institution or organization | ||||||
12 | which has no compensated officers or
employees and which is | ||||||
13 | organized and operated primarily for the recreation of
persons | ||||||
14 | 55 years of age or older. A limited liability company may | ||||||
15 | qualify for
the exemption under this paragraph only if the | ||||||
16 | limited liability company is
organized and operated | ||||||
17 | exclusively for educational purposes.
| ||||||
18 | (d) A sale or transfer of tangible personal
property
as an | ||||||
19 | incident to the
rendering of service for interstate carriers | ||||||
20 | for hire for use as rolling stock
moving in interstate commerce | ||||||
21 | or lessors under leases of one year or longer,
executed or in | ||||||
22 | effect at the time of purchase, to interstate carriers for hire
| ||||||
23 | for use as rolling stock moving in interstate commerce, and | ||||||
24 | equipment operated
by a telecommunications provider, licensed | ||||||
25 | as a common
carrier by the Federal Communications Commission, | ||||||
26 | which is permanently
installed in or affixed to aircraft moving |
| |||||||
| |||||||
1 | in interstate commerce.
| ||||||
2 | (d-1) A sale or transfer of tangible personal
property as | ||||||
3 | an incident to
the rendering of service for owners, lessors or | ||||||
4 | shippers of tangible personal
property which is utilized by | ||||||
5 | interstate carriers for hire for use as rolling
stock moving in | ||||||
6 | interstate commerce, and equipment operated
by a | ||||||
7 | telecommunications provider, licensed as a common carrier by | ||||||
8 | the
Federal Communications Commission, which is permanently | ||||||
9 | installed in or
affixed to aircraft moving in interstate | ||||||
10 | commerce.
| ||||||
11 | (d-1.1) On and after July 1, 2003 and through June 30, | ||||||
12 | 2004, a sale or transfer of a motor vehicle
of the
second | ||||||
13 | division with a gross vehicle weight in excess of 8,000 pounds | ||||||
14 | as an
incident to the rendering of service if that motor
| ||||||
15 | vehicle is subject
to the commercial distribution fee imposed | ||||||
16 | under Section 3-815.1 of the
Illinois Vehicle
Code. Beginning | ||||||
17 | on July 1, 2004 and through June 30, 2005, the use in this | ||||||
18 | State of motor vehicles of the second division: (i) with a | ||||||
19 | gross vehicle weight rating in excess of 8,000 pounds; (ii) | ||||||
20 | that are subject to the commercial distribution fee imposed | ||||||
21 | under Section 3-815.1 of the Illinois Vehicle Code; and (iii) | ||||||
22 | that are primarily used for commercial purposes. Through June | ||||||
23 | 30, 2005, this exemption applies to repair and replacement | ||||||
24 | parts added after the
initial
purchase of such a motor vehicle | ||||||
25 | if that motor vehicle is used in a manner that
would
qualify | ||||||
26 | for the rolling stock exemption otherwise provided for in this |
| |||||||
| |||||||
1 | Act. For purposes of this paragraph, "used for commercial | ||||||
2 | purposes" means the transportation of persons or property in | ||||||
3 | furtherance of any commercial or industrial enterprise whether | ||||||
4 | for-hire or not.
| ||||||
5 | (d-2) The repairing, reconditioning or remodeling, for a | ||||||
6 | common carrier by
rail, of tangible personal property which | ||||||
7 | belongs to such carrier for hire, and
as to which such carrier | ||||||
8 | receives the physical possession of the repaired,
| ||||||
9 | reconditioned or remodeled item of tangible personal property | ||||||
10 | in Illinois, and
which such carrier transports, or shares with | ||||||
11 | another common carrier in the
transportation of such property, | ||||||
12 | out of Illinois on a standard uniform bill of
lading showing | ||||||
13 | the person who repaired, reconditioned or remodeled the | ||||||
14 | property
as the shipper or consignor of such property to a | ||||||
15 | destination outside Illinois,
for use outside Illinois.
| ||||||
16 | (d-3) A sale or transfer of tangible personal property | ||||||
17 | which
is produced by the seller thereof on special order in | ||||||
18 | such a way as to have
made the applicable tax the Service | ||||||
19 | Occupation Tax or the Service Use Tax,
rather than the | ||||||
20 | Retailers' Occupation Tax or the Use Tax, for an interstate
| ||||||
21 | carrier by rail which receives the physical possession of such | ||||||
22 | property in
Illinois, and which transports such property, or | ||||||
23 | shares with another common
carrier in the transportation of | ||||||
24 | such property, out of Illinois on a standard
uniform bill of | ||||||
25 | lading showing the seller of the property as the shipper or
| ||||||
26 | consignor of such property to a destination outside Illinois, |
| |||||||
| |||||||
1 | for use outside
Illinois.
| ||||||
2 | (d-4) Until January 1, 1997, a sale, by a registered | ||||||
3 | serviceman paying tax
under this Act to the Department, of | ||||||
4 | special order printed materials delivered
outside Illinois and | ||||||
5 | which are not returned to this State, if delivery is made
by | ||||||
6 | the seller or agent of the seller, including an agent who | ||||||
7 | causes the product
to be delivered outside Illinois by a common | ||||||
8 | carrier or the U.S.
postal service.
| ||||||
9 | (e) A sale or transfer of machinery and equipment used | ||||||
10 | primarily in
the process of the manufacturing or assembling, | ||||||
11 | either in an existing, an
expanded or a new manufacturing | ||||||
12 | facility, of tangible personal property for
wholesale or retail | ||||||
13 | sale or lease, whether such sale or lease is made directly
by | ||||||
14 | the manufacturer or by some other person, whether the materials | ||||||
15 | used in the
process are owned by the manufacturer or some other | ||||||
16 | person, or whether such
sale or lease is made apart from or as | ||||||
17 | an incident to the seller's engaging in
a service occupation | ||||||
18 | and the applicable tax is a Service Occupation Tax or
Service | ||||||
19 | Use Tax, rather than Retailers' Occupation Tax or Use Tax. The | ||||||
20 | exemption provided by this paragraph (e) does not include | ||||||
21 | machinery and equipment used in (i) the generation of | ||||||
22 | electricity for wholesale or retail sale; (ii) the generation | ||||||
23 | or treatment of natural or artificial gas for wholesale or | ||||||
24 | retail sale that is delivered to customers through pipes, | ||||||
25 | pipelines, or mains; or (iii) the treatment of water for | ||||||
26 | wholesale or retail sale that is delivered to customers through |
| |||||||
| |||||||
1 | pipes, pipelines, or mains. The provisions of this amendatory | ||||||
2 | Act of the 98th General Assembly are declaratory of existing | ||||||
3 | law as to the meaning and scope of this exemption.
| ||||||
4 | (f) Until July 1, 2003, the sale or transfer of | ||||||
5 | distillation
machinery
and equipment, sold as a
unit or kit and | ||||||
6 | assembled or installed by the retailer, which machinery
and | ||||||
7 | equipment is certified by the user to be used only for the | ||||||
8 | production
of ethyl alcohol that will be used for consumption | ||||||
9 | as motor fuel or as a
component of motor fuel for the personal | ||||||
10 | use of such user and not subject
to sale or resale.
| ||||||
11 | (g) At the election of any serviceman not required to be | ||||||
12 | otherwise
registered as a retailer under Section 2a of the | ||||||
13 | Retailers' Occupation Tax Act,
made for each fiscal year sales | ||||||
14 | of service in which the aggregate annual cost
price of tangible | ||||||
15 | personal property transferred as an incident to the sales of
| ||||||
16 | service is less than 35% (75% in the case of servicemen | ||||||
17 | transferring
prescription drugs or servicemen engaged in | ||||||
18 | graphic arts production) of the
aggregate annual total gross | ||||||
19 | receipts from all sales of service. The purchase
of such | ||||||
20 | tangible personal property by the serviceman shall be subject | ||||||
21 | to tax
under the Retailers' Occupation Tax Act and the Use Tax | ||||||
22 | Act.
However, if a
primary serviceman who has made the election | ||||||
23 | described in this paragraph
subcontracts service work to a | ||||||
24 | secondary serviceman who has also made the
election described | ||||||
25 | in this paragraph, the primary serviceman does not
incur a Use | ||||||
26 | Tax liability if the secondary serviceman (i) has paid or will |
| |||||||
| |||||||
1 | pay
Use
Tax on his or her cost price of any tangible personal | ||||||
2 | property transferred
to the primary serviceman and (ii) | ||||||
3 | certifies that fact in writing to the
primary serviceman.
| ||||||
4 | Tangible personal property transferred incident to the | ||||||
5 | completion of a
maintenance agreement is exempt from the tax | ||||||
6 | imposed pursuant to this Act.
| ||||||
7 | Exemption (e) also includes machinery and equipment used in | ||||||
8 | the
general maintenance or repair of such exempt machinery and | ||||||
9 | equipment or for
in-house manufacture of exempt machinery and | ||||||
10 | equipment.
The machinery and equipment exemption does not | ||||||
11 | include machinery and equipment used in (i) the generation of | ||||||
12 | electricity for wholesale or retail sale; (ii) the generation | ||||||
13 | or treatment of natural or artificial gas for wholesale or | ||||||
14 | retail sale that is delivered to customers through pipes, | ||||||
15 | pipelines, or mains; or (iii) the treatment of water for | ||||||
16 | wholesale or retail sale that is delivered to customers through | ||||||
17 | pipes, pipelines, or mains. The provisions of this amendatory | ||||||
18 | Act of the 98th General Assembly are declaratory of existing | ||||||
19 | law as to the meaning and scope of this exemption. For the | ||||||
20 | purposes of exemption (e), each of these terms shall have the | ||||||
21 | following
meanings: (1) "manufacturing process" shall mean the | ||||||
22 | production of any
article of tangible personal property, | ||||||
23 | whether such article is a
finished product or an article for | ||||||
24 | use in the process of manufacturing
or assembling a different | ||||||
25 | article of tangible personal property, by
procedures commonly | ||||||
26 | regarded as manufacturing, processing, fabricating,
or |
| |||||||
| |||||||
1 | refining which changes some existing material or materials into | ||||||
2 | a
material with a different form, use or name. In relation to a
| ||||||
3 | recognized integrated business composed of a series of | ||||||
4 | operations which
collectively constitute manufacturing, or | ||||||
5 | individually constitute
manufacturing operations, the | ||||||
6 | manufacturing process shall be deemed to
commence with the | ||||||
7 | first operation or stage of production in the series,
and shall | ||||||
8 | not be deemed to end until the completion of the final product
| ||||||
9 | in the last operation or stage of production in the series; and | ||||||
10 | further for
purposes of exemption (e), photoprocessing is | ||||||
11 | deemed to be a manufacturing
process of tangible personal | ||||||
12 | property for wholesale or retail sale;
(2) "assembling process" | ||||||
13 | shall mean the production of any article of
tangible personal | ||||||
14 | property, whether such article is a finished product
or an | ||||||
15 | article for use in the process of manufacturing or assembling a
| ||||||
16 | different article of tangible personal property, by the | ||||||
17 | combination of
existing materials in a manner commonly regarded | ||||||
18 | as assembling which
results in a material of a different form, | ||||||
19 | use or name; (3) "machinery"
shall mean major mechanical | ||||||
20 | machines or major components of such machines
contributing to a | ||||||
21 | manufacturing or assembling process; and (4) "equipment"
shall | ||||||
22 | include any independent device or tool separate from any | ||||||
23 | machinery but
essential to an integrated manufacturing or | ||||||
24 | assembly process; including
computers used primarily in a | ||||||
25 | manufacturer's computer
assisted design, computer assisted | ||||||
26 | manufacturing (CAD/CAM) system; or any
subunit or assembly |
| |||||||
| |||||||
1 | comprising a component of any machinery or auxiliary,
adjunct | ||||||
2 | or attachment parts of machinery, such as tools, dies, jigs, | ||||||
3 | fixtures,
patterns and molds; or any parts which require | ||||||
4 | periodic replacement in the
course of normal operation; but | ||||||
5 | shall not include hand tools. Equipment
includes chemicals or | ||||||
6 | chemicals acting as catalysts but only if the chemicals
or | ||||||
7 | chemicals acting as catalysts effect a direct and immediate | ||||||
8 | change upon a
product being manufactured or assembled for | ||||||
9 | wholesale or retail sale or lease.
The purchaser of such | ||||||
10 | machinery and equipment
who has an active resale registration | ||||||
11 | number shall furnish such number to
the seller at the time of | ||||||
12 | purchase. The purchaser of such machinery and
equipment and | ||||||
13 | tools without an active resale registration number shall | ||||||
14 | furnish
to the seller a certificate of exemption for each | ||||||
15 | transaction stating facts
establishing the exemption for that | ||||||
16 | transaction, which certificate shall
be available to the | ||||||
17 | Department for inspection or audit.
| ||||||
18 | Except as provided in Section 2d of this Act, the rolling | ||||||
19 | stock exemption
applies to rolling
stock
used by an interstate
| ||||||
20 | carrier for hire, even just between points in Illinois, if such | ||||||
21 | rolling
stock transports, for hire, persons whose journeys or | ||||||
22 | property whose
shipments originate or terminate outside | ||||||
23 | Illinois.
| ||||||
24 | Any informal rulings, opinions or letters issued by the | ||||||
25 | Department in
response to an inquiry or request for any opinion | ||||||
26 | from any person
regarding the coverage and applicability of |
| |||||||
| |||||||
1 | exemption (e) to specific
devices shall be published, | ||||||
2 | maintained as a public record, and made
available for public | ||||||
3 | inspection and copying. If the informal ruling,
opinion or | ||||||
4 | letter contains trade secrets or other confidential
| ||||||
5 | information, where possible the Department shall delete such | ||||||
6 | information
prior to publication. Whenever such informal | ||||||
7 | rulings, opinions, or
letters contain any policy of general | ||||||
8 | applicability, the Department
shall formulate and adopt such | ||||||
9 | policy as a rule in accordance with the
provisions of the | ||||||
10 | Illinois Administrative Procedure Act.
| ||||||
11 | On and after July 1, 1987, no entity otherwise eligible | ||||||
12 | under exemption
(c) of this Section shall make tax free | ||||||
13 | purchases unless it has an active
exemption identification | ||||||
14 | number issued by the Department.
| ||||||
15 | "Serviceman" means any person who is engaged in the | ||||||
16 | occupation of
making sales of service.
| ||||||
17 | Notwithstanding any other provision of law, a | ||||||
18 | not-for-profit organization that (i) has received an exemption | ||||||
19 | under Section 501(c)(3) of the Internal Revenue Code, (ii) has | ||||||
20 | gross receipts of no more than $10,000 per year, and (iii) is | ||||||
21 | organized and operated exclusively for charitable, religious, | ||||||
22 | or educational purposes is not considered a serviceman for the | ||||||
23 | purposes of this Act. | ||||||
24 | "Sale at Retail" means "sale at retail" as defined in the | ||||||
25 | Retailers'
Occupation Tax Act.
| ||||||
26 | "Supplier" means any person who makes sales of tangible |
| |||||||
| |||||||
1 | personal
property to servicemen for the purpose of resale as an | ||||||
2 | incident to a
sale of service.
| ||||||
3 | (Source: P.A. 98-583, eff. 1-1-14.)
| ||||||
4 | Section 20. The Retailers' Occupation Tax Act is amended by | ||||||
5 | changing Section 1 as follows:
| ||||||
6 | (35 ILCS 120/1) (from Ch. 120, par. 440)
| ||||||
7 | Sec. 1. Definitions. "Sale at retail" means any transfer of | ||||||
8 | the
ownership of or title to
tangible personal property to a | ||||||
9 | purchaser, for the purpose of use or
consumption, and not for | ||||||
10 | the purpose of resale in any form as tangible
personal property | ||||||
11 | to the extent not first subjected to a use for which it
was | ||||||
12 | purchased, for a valuable consideration: Provided that the | ||||||
13 | property
purchased is deemed to be purchased for the purpose of | ||||||
14 | resale, despite
first being used, to the extent to which it is | ||||||
15 | resold as an ingredient of
an intentionally produced product or | ||||||
16 | byproduct of manufacturing. For this
purpose, slag produced as | ||||||
17 | an incident to manufacturing pig iron or steel
and sold is | ||||||
18 | considered to be an intentionally produced byproduct of
| ||||||
19 | manufacturing. Transactions whereby the possession of the | ||||||
20 | property is
transferred but the seller retains the title as | ||||||
21 | security for payment of the
selling price shall be deemed to be | ||||||
22 | sales.
| ||||||
23 | "Sale at retail" shall be construed to include any transfer | ||||||
24 | of the
ownership of or title to tangible personal property to a |
| |||||||
| |||||||
1 | purchaser, for use
or consumption by any other person to whom | ||||||
2 | such purchaser may transfer the
tangible personal property | ||||||
3 | without a valuable consideration, and to include
any transfer, | ||||||
4 | whether made for or without a valuable consideration, for
| ||||||
5 | resale in any form as tangible personal property unless made in | ||||||
6 | compliance
with Section 2c of this Act.
| ||||||
7 | Sales of tangible personal property, which property, to the | ||||||
8 | extent not
first subjected to a use for which it was purchased, | ||||||
9 | as an ingredient or
constituent, goes into and forms a part of | ||||||
10 | tangible personal property
subsequently the subject of a "Sale | ||||||
11 | at retail", are not sales at retail as
defined in this Act: | ||||||
12 | Provided that the property purchased is deemed to be
purchased | ||||||
13 | for the purpose of resale, despite first being used, to the
| ||||||
14 | extent to which it is resold as an ingredient of an | ||||||
15 | intentionally produced
product or byproduct of manufacturing.
| ||||||
16 | "Sale at retail" shall be construed to include any Illinois | ||||||
17 | florist's
sales transaction in which the purchase order is | ||||||
18 | received in Illinois by a
florist and the sale is for use or | ||||||
19 | consumption, but the Illinois florist
has a florist in another | ||||||
20 | state deliver the property to the purchaser or the
purchaser's | ||||||
21 | donee in such other state.
| ||||||
22 | Nonreusable tangible personal property that is used by | ||||||
23 | persons engaged in
the business of operating a restaurant, | ||||||
24 | cafeteria, or drive-in is a sale for
resale when it is | ||||||
25 | transferred to customers in the ordinary course of business
as | ||||||
26 | part of the sale of food or beverages and is used to deliver, |
| |||||||
| |||||||
1 | package, or
consume food or beverages, regardless of where | ||||||
2 | consumption of the food or
beverages occurs. Examples of those | ||||||
3 | items include, but are not limited to
nonreusable, paper and | ||||||
4 | plastic cups, plates, baskets, boxes, sleeves, buckets
or other | ||||||
5 | containers, utensils, straws, placemats, napkins, doggie bags, | ||||||
6 | and
wrapping or packaging
materials that are transferred to | ||||||
7 | customers as part of the sale of food or
beverages in the | ||||||
8 | ordinary course of business.
| ||||||
9 | The purchase, employment and transfer of such tangible | ||||||
10 | personal property
as newsprint and ink for the primary purpose | ||||||
11 | of conveying news (with or
without other information) is not a | ||||||
12 | purchase, use or sale of tangible
personal property.
| ||||||
13 | A person whose activities are organized and conducted | ||||||
14 | primarily as a
not-for-profit service enterprise, and who | ||||||
15 | engages in selling tangible
personal property at retail | ||||||
16 | (whether to the public or merely to members and
their guests) | ||||||
17 | is engaged in the business of selling tangible personal
| ||||||
18 | property at retail with respect to such transactions, excepting | ||||||
19 | only a
person organized and operated exclusively for | ||||||
20 | charitable, religious or
educational purposes either (1), to | ||||||
21 | the extent of sales by such person to
its members, students, | ||||||
22 | patients or inmates of tangible personal property to
be used | ||||||
23 | primarily for the purposes of such person, or (2), to the | ||||||
24 | extent of
sales by such person of tangible personal property | ||||||
25 | which is not sold or
offered for sale by persons organized for | ||||||
26 | profit. The selling of school
books and school supplies by |
| |||||||
| |||||||
1 | schools at retail to students is not
"primarily for the | ||||||
2 | purposes of" the school which does such selling. The
provisions | ||||||
3 | of this paragraph shall not apply to nor subject to taxation
| ||||||
4 | occasional dinners, socials or similar activities of a person | ||||||
5 | organized and
operated exclusively for charitable, religious | ||||||
6 | or educational purposes,
whether or not such activities are | ||||||
7 | open to the public.
| ||||||
8 | A person who is the recipient of a grant or contract under | ||||||
9 | Title VII of
the Older Americans Act of 1965 (P.L. 92-258) and | ||||||
10 | serves meals to
participants in the federal Nutrition Program | ||||||
11 | for the Elderly in return for
contributions established in | ||||||
12 | amount by the individual participant pursuant
to a schedule of | ||||||
13 | suggested fees as provided for in the federal Act is not
| ||||||
14 | engaged in the business of selling tangible personal property | ||||||
15 | at retail
with respect to such transactions.
| ||||||
16 | "Purchaser" means anyone who, through a sale at retail, | ||||||
17 | acquires the
ownership of or title to tangible personal | ||||||
18 | property for a valuable
consideration.
| ||||||
19 | "Reseller of motor fuel" means any person engaged in the | ||||||
20 | business of selling
or delivering or transferring title of | ||||||
21 | motor fuel to another person
other than for use or consumption.
| ||||||
22 | No person shall act as a reseller of motor fuel within this | ||||||
23 | State without
first being registered as a reseller pursuant to | ||||||
24 | Section 2c or a retailer
pursuant to Section 2a.
| ||||||
25 | "Selling price" or the "amount of sale" means the | ||||||
26 | consideration for a
sale valued in money whether received in |
| |||||||
| |||||||
1 | money or otherwise, including
cash, credits, property, other | ||||||
2 | than as hereinafter provided, and services,
but not including | ||||||
3 | the value of or credit given for traded-in tangible
personal | ||||||
4 | property where the item that is traded-in is of like kind and
| ||||||
5 | character as that which is being sold, and shall be determined | ||||||
6 | without any
deduction on account of the cost of the property | ||||||
7 | sold, the cost of
materials used, labor or service cost or any | ||||||
8 | other expense whatsoever, but
does not include charges that are | ||||||
9 | added to prices by sellers on account of
the seller's tax | ||||||
10 | liability under this Act, or on account of the seller's
duty to | ||||||
11 | collect, from the purchaser, the tax that is imposed by the Use | ||||||
12 | Tax
Act, or, except as otherwise provided with respect to any | ||||||
13 | cigarette tax imposed by a home rule unit, on account of the | ||||||
14 | seller's tax liability under any local occupation tax | ||||||
15 | administered by the Department, or, except as otherwise | ||||||
16 | provided with respect to any cigarette tax imposed by a home | ||||||
17 | rule unit on account of the seller's duty to collect, from the | ||||||
18 | purchasers, the tax that is imposed under any local use tax | ||||||
19 | administered by the Department.
Effective December 1, 1985, | ||||||
20 | "selling price" shall include charges that
are added to prices | ||||||
21 | by sellers on account of the seller's
tax liability under the | ||||||
22 | Cigarette Tax Act, on account of the sellers'
duty to collect, | ||||||
23 | from the purchaser, the tax imposed under the Cigarette
Use Tax | ||||||
24 | Act, and on account of the seller's duty to collect, from the
| ||||||
25 | purchaser, any cigarette tax imposed by a home rule unit.
| ||||||
26 | Notwithstanding any law to the contrary, for any motor |
| |||||||
| |||||||
1 | vehicle, as defined in Section 1-146 of the Vehicle Code, that | ||||||
2 | is sold on or after January 1, 2015 for the purpose of leasing | ||||||
3 | the vehicle for a defined period that is longer than one year | ||||||
4 | and (1) is a motor vehicle of the second division that: (A) is | ||||||
5 | a self-contained motor vehicle designed or permanently | ||||||
6 | converted to provide living quarters for recreational, | ||||||
7 | camping, or travel use, with direct walk through access to the | ||||||
8 | living quarters from the driver's seat; (B) is of the van | ||||||
9 | configuration designed for the transportation of not less than | ||||||
10 | 7 nor more than 16 passengers; or (C) has a gross vehicle | ||||||
11 | weight rating of 8,000 pounds or less or (2) is a motor vehicle | ||||||
12 | of the first division, "selling price" or "amount of sale" | ||||||
13 | means the consideration received by the lessor pursuant to the | ||||||
14 | lease contract, including amounts due at lease signing and all | ||||||
15 | monthly or other regular payments charged over the term of the | ||||||
16 | lease. Also included in the selling price is any amount | ||||||
17 | received by the lessor from the lessee for the leased vehicle | ||||||
18 | that is not calculated at the time the lease is executed, | ||||||
19 | including, but not limited to, excess mileage charges and | ||||||
20 | charges for excess wear and tear. For sales that occur in | ||||||
21 | Illinois, with respect to any amount received by the lessor | ||||||
22 | from the lessee for the leased vehicle that is not calculated | ||||||
23 | at the time the lease is executed, the lessor who purchased the | ||||||
24 | motor vehicle does not incur the tax imposed by the Use Tax Act | ||||||
25 | on those amounts, and the retailer who makes the retail sale of | ||||||
26 | the motor vehicle to the lessor is not required to collect the |
| |||||||
| |||||||
1 | tax imposed by the Use Tax Act or to pay the tax imposed by this | ||||||
2 | Act on those amounts. However, the lessor who purchased the | ||||||
3 | motor vehicle assumes the liability for reporting and paying | ||||||
4 | the tax on those amounts directly to the Department in the same | ||||||
5 | form (Illinois Retailers' Occupation Tax, and local retailers' | ||||||
6 | occupation taxes, if applicable) in which the retailer would | ||||||
7 | have reported and paid such tax if the retailer had accounted | ||||||
8 | for the tax to the Department. For amounts received by the | ||||||
9 | lessor from the lessee that are not calculated at the time the | ||||||
10 | lease is executed, the lessor must file the return and pay the | ||||||
11 | tax to the Department by the due date otherwise required by | ||||||
12 | this Act for returns other than transaction returns. If the | ||||||
13 | retailer is entitled under this Act to a discount for | ||||||
14 | collecting and remitting the tax imposed under this Act to the | ||||||
15 | Department with respect to the sale of the motor vehicle to the | ||||||
16 | lessor, then the right to the discount provided in this Act | ||||||
17 | shall be transferred to the lessor with respect to the tax paid | ||||||
18 | by the lessor for any amount received by the lessor from the | ||||||
19 | lessee for the leased vehicle that is not calculated at the | ||||||
20 | time the lease is executed; provided that the discount is only | ||||||
21 | allowed if the return is timely filed and for amounts timely | ||||||
22 | paid. The "selling price" of a motor vehicle that is sold on or | ||||||
23 | after January 1, 2015 for the purpose of leasing for a defined | ||||||
24 | period of longer than one year shall not be reduced by the | ||||||
25 | value of or credit given for traded-in tangible personal | ||||||
26 | property owned by the lessor, nor shall it be reduced by the |
| |||||||
| |||||||
1 | value of or credit given for traded-in tangible personal | ||||||
2 | property owned by the lessee, regardless of whether the | ||||||
3 | trade-in value thereof is assigned by the lessee to the lessor. | ||||||
4 | In the case of a motor vehicle that is sold for the purpose of | ||||||
5 | leasing for a defined period of longer than one year, the sale | ||||||
6 | occurs at the time of the delivery of the vehicle, regardless | ||||||
7 | of the due date of any lease payments. A lessor who incurs a | ||||||
8 | Retailers' Occupation Tax liability on the sale of a motor | ||||||
9 | vehicle coming off lease may not take a credit against that | ||||||
10 | liability for the Use Tax the lessor paid upon the purchase of | ||||||
11 | the motor vehicle (or for any tax the lessor paid with respect | ||||||
12 | to any amount received by the lessor from the lessee for the | ||||||
13 | leased vehicle that was not calculated at the time the lease | ||||||
14 | was executed) if the selling price of the motor vehicle at the | ||||||
15 | time of purchase was calculated using the definition of | ||||||
16 | "selling price" as defined in this paragraph.
Notwithstanding | ||||||
17 | any other provision of this Act to the contrary, lessors shall | ||||||
18 | file all returns and make all payments required under this | ||||||
19 | paragraph to the Department by electronic means in the manner | ||||||
20 | and form as required by the Department. This paragraph does not | ||||||
21 | apply to leases of motor vehicles for which, at the time the | ||||||
22 | lease is entered into, the term of the lease is not a defined | ||||||
23 | period, including leases with a defined initial period with the | ||||||
24 | option to continue the lease on a month-to-month or other basis | ||||||
25 | beyond the initial defined period. | ||||||
26 | The phrase "like kind and character" shall be liberally |
| |||||||
| |||||||
1 | construed
(including but not limited to any form of motor | ||||||
2 | vehicle for any form of
motor vehicle, or any kind of farm or | ||||||
3 | agricultural implement for any other
kind of farm or | ||||||
4 | agricultural implement), while not including a kind of item
| ||||||
5 | which, if sold at retail by that retailer, would be exempt from | ||||||
6 | retailers'
occupation tax and use tax as an isolated or | ||||||
7 | occasional sale.
| ||||||
8 | "Gross receipts" from the sales of tangible personal | ||||||
9 | property at retail
means the total selling price or the amount | ||||||
10 | of such sales, as hereinbefore
defined. In the case of charge | ||||||
11 | and time sales, the amount thereof shall be
included only as | ||||||
12 | and when payments are received by the seller.
Receipts or other | ||||||
13 | consideration derived by a seller from
the sale, transfer or | ||||||
14 | assignment of accounts receivable to a wholly owned
subsidiary | ||||||
15 | will not be deemed payments prior to the time the purchaser
| ||||||
16 | makes payment on such accounts.
| ||||||
17 | "Department" means the Department of Revenue.
| ||||||
18 | "Person" means any natural individual, firm, partnership, | ||||||
19 | association,
joint stock company, joint adventure, public or | ||||||
20 | private corporation, limited
liability company, or a receiver, | ||||||
21 | executor, trustee, guardian or other
representative appointed | ||||||
22 | by order of any court.
| ||||||
23 | Notwithstanding any other provision of law, a | ||||||
24 | not-for-profit organization that (i) has received an exemption | ||||||
25 | under Section 501(c)(3) of the Internal Revenue Code, (ii) has | ||||||
26 | gross receipts of no more than $10,000 per year, and (iii) is |
| |||||||
| |||||||
1 | organized and operated exclusively for charitable, religious, | ||||||
2 | or educational purposes is not considered a retailer for the | ||||||
3 | purposes of this Act. | ||||||
4 | The isolated or occasional sale of tangible personal | ||||||
5 | property at retail
by a person who does not hold himself out as | ||||||
6 | being engaged (or who does not
habitually engage) in selling | ||||||
7 | such tangible personal property at retail, or
a sale through a | ||||||
8 | bulk vending machine, does not constitute engaging in a
| ||||||
9 | business of selling such tangible personal property at retail | ||||||
10 | within the
meaning of this Act; provided that any person who is | ||||||
11 | engaged in a business
which is not subject to the tax imposed | ||||||
12 | by this Act because of involving
the sale of or a contract to | ||||||
13 | sell real estate or a construction contract to
improve real | ||||||
14 | estate or a construction contract to engineer, install, and
| ||||||
15 | maintain an integrated system of products, but who, in the | ||||||
16 | course of
conducting such business,
transfers tangible | ||||||
17 | personal property to users or consumers in the finished
form in | ||||||
18 | which it was purchased, and which does not become real estate | ||||||
19 | or was
not engineered and installed, under any provision of a | ||||||
20 | construction contract or
real estate sale or real estate sales | ||||||
21 | agreement entered into with some other
person arising out of or | ||||||
22 | because of such nontaxable business, is engaged in the
business | ||||||
23 | of selling tangible personal property at retail to the extent | ||||||
24 | of the
value of the tangible personal property so transferred. | ||||||
25 | If, in such a
transaction, a separate charge is made for the | ||||||
26 | tangible personal property so
transferred, the value of such |
| |||||||
| |||||||
1 | property, for the purpose of this Act, shall be
the amount so | ||||||
2 | separately charged, but not less than the cost of such property
| ||||||
3 | to the transferor; if no separate charge is made, the value of | ||||||
4 | such property,
for the purposes of this Act, is the cost to the | ||||||
5 | transferor of such tangible
personal property. Construction | ||||||
6 | contracts for the improvement of real estate
consisting of | ||||||
7 | engineering, installation, and maintenance of voice, data, | ||||||
8 | video,
security, and all telecommunication systems do not | ||||||
9 | constitute engaging in a
business of selling tangible personal | ||||||
10 | property at retail within the meaning of
this Act if they are | ||||||
11 | sold at one specified contract price.
| ||||||
12 | A person who holds himself or herself out as being engaged | ||||||
13 | (or who habitually
engages) in selling tangible personal | ||||||
14 | property at retail is a person
engaged in the business of | ||||||
15 | selling tangible personal property at retail
hereunder with | ||||||
16 | respect to such sales (and not primarily in a service
| ||||||
17 | occupation) notwithstanding the fact that such person designs | ||||||
18 | and produces
such tangible personal property on special order | ||||||
19 | for the purchaser and in
such a way as to render the property | ||||||
20 | of value only to such purchaser, if
such tangible personal | ||||||
21 | property so produced on special order serves
substantially the | ||||||
22 | same function as stock or standard items of tangible
personal | ||||||
23 | property that are sold at retail.
| ||||||
24 | Persons who engage in the business of transferring tangible | ||||||
25 | personal
property upon the redemption of trading stamps are | ||||||
26 | engaged in the business
of selling such property at retail and |
| |||||||
| |||||||
1 | shall be liable for and shall pay
the tax imposed by this Act | ||||||
2 | on the basis of the retail value of the
property transferred | ||||||
3 | upon redemption of such stamps.
| ||||||
4 | "Bulk vending machine" means a vending machine,
containing | ||||||
5 | unsorted confections, nuts, toys, or other items designed
| ||||||
6 | primarily to be used or played with by children
which, when a | ||||||
7 | coin or coins of a denomination not larger than $0.50 are
| ||||||
8 | inserted, are dispensed in equal portions, at random and
| ||||||
9 | without selection by the customer.
| ||||||
10 | (Source: P.A. 98-628, eff. 1-1-15; 98-1080, eff. 8-26-14.)
| ||||||
11 | Section 99. Effective date. This Act takes effect upon | ||||||
12 | becoming law.
|