Bill Text: IL HB4753 | 2019-2020 | 101st General Assembly | Introduced
Bill Title: Amends the Use Tax Act and the Retailers' Occupation Tax Act. Provides that, beginning on July 1, 2020, "selling price" no longer includes the value of traded-in motor vehicles. Effective immediately.
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2020-02-18 - Referred to Rules Committee [HB4753 Detail]
Download: Illinois-2019-HB4753-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, prior to January 1, 2020 and on and after July | ||||||
19 | 1, 2020 , not including the
value of or credit given for | ||||||
20 | traded-in tangible personal property where the
item that is | ||||||
21 | traded-in is of like kind and character as that which is being
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22 | sold; beginning January 1, 2020 and through June 30, 2020 , | ||||||
23 | "selling price" includes the portion of the value of or credit | ||||||
24 | given for traded-in motor vehicles of the First Division as | ||||||
25 | defined in Section 1-146 of the Illinois Vehicle Code of like | ||||||
26 | kind and character as that which is being sold that exceeds |
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1 | $10,000. "Selling price" shall be determined without any | ||||||
2 | deduction on account of the cost
of the property sold, the cost | ||||||
3 | of materials used, labor or service cost or
any other expense | ||||||
4 | whatsoever, but does not include interest or finance
charges | ||||||
5 | which appear as separate items on the bill of sale or sales
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6 | contract nor charges that are added to prices by sellers on | ||||||
7 | account of the
seller's tax liability under the Retailers' | ||||||
8 | Occupation Tax Act, or on
account of the seller's duty to | ||||||
9 | collect, from the purchaser, the tax that
is imposed by this | ||||||
10 | Act, or, except as otherwise provided with respect to any | ||||||
11 | cigarette tax imposed by a home rule unit, on account of the | ||||||
12 | seller's tax liability under any local occupation tax | ||||||
13 | administered by the Department, or, except as otherwise | ||||||
14 | provided with respect to any cigarette tax imposed by a home | ||||||
15 | rule unit on account of the seller's duty to collect, from the | ||||||
16 | purchasers, the tax that is imposed under any local use tax | ||||||
17 | administered by the Department. Effective December 1, 1985, | ||||||
18 | "selling price"
shall include charges that are added to prices | ||||||
19 | by sellers on account of the
seller's tax liability under the | ||||||
20 | Cigarette Tax Act, on account of the seller's
duty to collect, | ||||||
21 | from the purchaser, the tax imposed under the Cigarette Use
Tax | ||||||
22 | Act, and on account of the seller's duty to collect, from the | ||||||
23 | purchaser,
any cigarette tax imposed by a home rule unit.
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24 | Notwithstanding any law to the contrary, for any motor | ||||||
25 | vehicle, as defined in Section 1-146 of the Vehicle Code, that | ||||||
26 | is sold on or after January 1, 2015 for the purpose of leasing |
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1 | the vehicle for a defined period that is longer than one year | ||||||
2 | and (1) is a motor vehicle of the second division that: (A) is | ||||||
3 | a self-contained motor vehicle designed or permanently | ||||||
4 | converted to provide living quarters for recreational, | ||||||
5 | camping, or travel use, with direct walk through access to the | ||||||
6 | living quarters from the driver's seat; (B) is of the van | ||||||
7 | configuration designed for the transportation of not less than | ||||||
8 | 7 nor more than 16 passengers; or (C) has a gross vehicle | ||||||
9 | weight rating of 8,000 pounds or less or (2) is a motor vehicle | ||||||
10 | of the first division, "selling price" or "amount of sale" | ||||||
11 | means the consideration received by the lessor pursuant to the | ||||||
12 | lease contract, including amounts due at lease signing and all | ||||||
13 | monthly or other regular payments charged over the term of the | ||||||
14 | lease. Also included in the selling price is any amount | ||||||
15 | received by the lessor from the lessee for the leased vehicle | ||||||
16 | that is not calculated at the time the lease is executed, | ||||||
17 | including, but not limited to, excess mileage charges and | ||||||
18 | charges for excess wear and tear. For sales that occur in | ||||||
19 | Illinois, with respect to any amount received by the lessor | ||||||
20 | from the lessee for the leased vehicle that is not calculated | ||||||
21 | at the time the lease is executed, the lessor who purchased the | ||||||
22 | motor vehicle does not incur the tax imposed by the Use Tax Act | ||||||
23 | on those amounts, and the retailer who makes the retail sale of | ||||||
24 | the motor vehicle to the lessor is not required to collect the | ||||||
25 | tax imposed by this Act or to pay the tax imposed by the | ||||||
26 | Retailers' Occupation Tax Act on those amounts. However, the |
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1 | lessor who purchased the motor vehicle assumes the liability | ||||||
2 | for reporting and paying the tax on those amounts directly to | ||||||
3 | the Department in the same form (Illinois Retailers' Occupation | ||||||
4 | Tax, and local retailers' occupation taxes, if applicable) in | ||||||
5 | which the retailer would have reported and paid such tax if the | ||||||
6 | retailer had accounted for the tax to the Department. For | ||||||
7 | amounts received by the lessor from the lessee that are not | ||||||
8 | calculated at the time the lease is executed, the lessor must | ||||||
9 | file the return and pay the tax to the Department by the due | ||||||
10 | date otherwise required by this Act for returns other than | ||||||
11 | transaction returns. If the retailer is entitled under this Act | ||||||
12 | to a discount for collecting and remitting the tax imposed | ||||||
13 | under this Act to the Department with respect to the sale of | ||||||
14 | the motor vehicle to the lessor, then the right to the discount | ||||||
15 | provided in this Act shall be transferred to the lessor with | ||||||
16 | respect to the tax paid by the lessor for any amount received | ||||||
17 | by the lessor from the lessee for the leased vehicle that is | ||||||
18 | not calculated at the time the lease is executed; provided that | ||||||
19 | the discount is only allowed if the return is timely filed and | ||||||
20 | for amounts timely paid. The "selling price" of a motor vehicle | ||||||
21 | that is sold on or after January 1, 2015 for the purpose of | ||||||
22 | leasing for a defined period of longer than one year shall not | ||||||
23 | be reduced by the value of or credit given for traded-in | ||||||
24 | tangible personal property owned by the lessor, nor shall it be | ||||||
25 | reduced by the value of or credit given for traded-in tangible | ||||||
26 | personal property owned by the lessee, regardless of whether |
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1 | the trade-in value thereof is assigned by the lessee to the | ||||||
2 | lessor. In the case of a motor vehicle that is sold for the | ||||||
3 | purpose of leasing for a defined period of longer than one | ||||||
4 | year, the sale occurs at the time of the delivery of the | ||||||
5 | vehicle, regardless of the due date of any lease payments. A | ||||||
6 | lessor who incurs a Retailers' Occupation Tax liability on the | ||||||
7 | sale of a motor vehicle coming off lease may not take a credit | ||||||
8 | against that liability for the Use Tax the lessor paid upon the | ||||||
9 | purchase of the motor vehicle (or for any tax the lessor paid | ||||||
10 | with respect to any amount received by the lessor from the | ||||||
11 | lessee for the leased vehicle that was not calculated at the | ||||||
12 | time the lease was executed) if the selling price of the motor | ||||||
13 | vehicle at the time of purchase was calculated using the | ||||||
14 | definition of "selling price" as defined in this paragraph. | ||||||
15 | Notwithstanding any other provision of this Act to the | ||||||
16 | contrary, lessors shall file all returns and make all payments | ||||||
17 | required under this paragraph to the Department by electronic | ||||||
18 | means in the manner and form as required by the Department. | ||||||
19 | This paragraph does not apply to leases of motor vehicles for | ||||||
20 | which, at the time the lease is entered into, the term of the | ||||||
21 | lease is not a defined period, including leases with a defined | ||||||
22 | initial period with the option to continue the lease on a | ||||||
23 | month-to-month or other basis beyond the initial defined | ||||||
24 | period. | ||||||
25 | The phrase "like kind and character" shall be liberally | ||||||
26 | construed
(including but not limited to any form of motor |
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1 | vehicle for any form of
motor vehicle, or any kind of farm or | ||||||
2 | agricultural implement for any other
kind of farm or | ||||||
3 | agricultural implement), while not including a kind of item
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4 | which, if sold at retail by that retailer, would be exempt from | ||||||
5 | retailers'
occupation tax and use tax as an isolated or | ||||||
6 | occasional sale.
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7 | "Department" means the Department of Revenue.
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8 | "Person" means any natural individual, firm, partnership, | ||||||
9 | association,
joint stock company, joint adventure, public or | ||||||
10 | private corporation, limited
liability company, or a
receiver, | ||||||
11 | executor, trustee, guardian or other representative appointed
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12 | by order of any court.
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13 | "Retailer" means and includes every person engaged in the | ||||||
14 | business of
making sales at retail as defined in this Section.
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15 | A person who holds himself or herself out as being engaged | ||||||
16 | (or who habitually
engages) in selling tangible personal | ||||||
17 | property at retail is a retailer
hereunder with respect to such | ||||||
18 | sales (and not primarily in a service
occupation) | ||||||
19 | notwithstanding the fact that such person designs and produces
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20 | such tangible personal property on special order for the | ||||||
21 | purchaser and in
such a way as to render the property of value | ||||||
22 | only to such purchaser, if
such tangible personal property so | ||||||
23 | produced on special order serves
substantially the same | ||||||
24 | function as stock or standard items of tangible
personal | ||||||
25 | property that are sold at retail.
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26 | A person whose activities are organized and conducted |
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1 | primarily as a
not-for-profit service enterprise, and who | ||||||
2 | engages in selling tangible
personal property at retail | ||||||
3 | (whether to the public or merely to members and
their guests) | ||||||
4 | is a retailer with respect to such transactions, excepting
only | ||||||
5 | a person organized and operated exclusively for charitable, | ||||||
6 | religious
or educational purposes either (1), to the extent of | ||||||
7 | sales by such person
to its members, students, patients or | ||||||
8 | inmates of tangible personal property
to be used primarily for | ||||||
9 | the purposes of such person, or (2), to the extent
of sales by | ||||||
10 | such person of tangible personal property which is not sold or
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11 | offered for sale by persons organized for profit. The selling | ||||||
12 | of school
books and school supplies by schools at retail to | ||||||
13 | students is not
"primarily for the purposes of" the school | ||||||
14 | which does such selling. This
paragraph does not apply to nor | ||||||
15 | subject to taxation occasional dinners,
social or similar | ||||||
16 | activities of a person organized and operated exclusively
for | ||||||
17 | charitable, religious or educational purposes, whether or not | ||||||
18 | such
activities are open to the public.
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19 | A person who is the recipient of a grant or contract under | ||||||
20 | Title VII of
the Older Americans Act of 1965 (P.L. 92-258) and | ||||||
21 | serves meals to
participants in the federal Nutrition Program | ||||||
22 | for the Elderly in return for
contributions established in | ||||||
23 | amount by the individual participant pursuant
to a schedule of | ||||||
24 | suggested fees as provided for in the federal Act is not a
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25 | retailer under this Act with respect to such transactions.
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26 | Persons who engage in the business of transferring tangible |
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1 | personal
property upon the redemption of trading stamps are | ||||||
2 | retailers hereunder when
engaged in such business.
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3 | The isolated or occasional sale of tangible personal | ||||||
4 | property at retail
by a person who does not hold himself out as | ||||||
5 | being engaged (or who does not
habitually engage) in selling | ||||||
6 | such tangible personal property at retail or
a sale through a | ||||||
7 | bulk vending machine does not make such person a retailer
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8 | hereunder. However, any person who is engaged in a business | ||||||
9 | which is not
subject to the tax imposed by the Retailers' | ||||||
10 | Occupation Tax Act because
of involving the sale of or a | ||||||
11 | contract to sell real estate or a
construction contract to | ||||||
12 | improve real estate, but who, in the course of
conducting such | ||||||
13 | business, transfers tangible personal property to users or
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14 | consumers in the finished form in which it was purchased, and | ||||||
15 | which does
not become real estate, under any provision of a | ||||||
16 | construction contract or
real estate sale or real estate sales | ||||||
17 | agreement entered into with some
other person arising out of or | ||||||
18 | because of such nontaxable business, is a
retailer to the | ||||||
19 | extent of the value of the tangible personal property so
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20 | transferred. If, in such transaction, a separate charge is made | ||||||
21 | for the
tangible personal property so transferred, the value of | ||||||
22 | such property, for
the purposes of this Act, is the amount so | ||||||
23 | separately charged, but not less
than the cost of such property | ||||||
24 | to the transferor; if no separate charge is
made, the value of | ||||||
25 | such property, for the purposes of this Act, is the cost
to the | ||||||
26 | transferor of such tangible personal property.
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1 | "Retailer maintaining a place of business in this State", | ||||||
2 | or any like
term, means and includes any of the following | ||||||
3 | retailers:
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4 | (1) A retailer having or maintaining within this State, | ||||||
5 | directly or by
a subsidiary, an office, distribution house, | ||||||
6 | sales house, warehouse or other
place of business, or any | ||||||
7 | agent or other representative operating within this
State | ||||||
8 | under the authority of the retailer or its subsidiary, | ||||||
9 | irrespective of
whether such place of business or agent or | ||||||
10 | other representative is located here
permanently or | ||||||
11 | temporarily, or whether such retailer or subsidiary is | ||||||
12 | licensed
to do business in this State. However, the | ||||||
13 | ownership of property that is
located at the premises of a | ||||||
14 | printer with which the retailer has contracted for
printing | ||||||
15 | and that consists of the final printed product, property | ||||||
16 | that becomes
a part of the final printed product, or copy | ||||||
17 | from which the printed product is
produced shall not result | ||||||
18 | in the retailer being deemed to have or maintain an
office, | ||||||
19 | distribution house, sales house, warehouse, or other place | ||||||
20 | of business
within this State. | ||||||
21 | (1.1) A retailer having a contract with a person | ||||||
22 | located in this State under which the person, for a | ||||||
23 | commission or other consideration based upon the sale of | ||||||
24 | tangible personal property by the retailer, directly or | ||||||
25 | indirectly refers potential customers to the retailer by | ||||||
26 | providing to the potential customers a promotional code or |
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1 | other mechanism that allows the retailer to track purchases | ||||||
2 | referred by such persons. Examples of mechanisms that allow | ||||||
3 | the retailer to track purchases referred by such persons | ||||||
4 | include but are not limited to the use of a link on the | ||||||
5 | person's Internet website, promotional codes distributed | ||||||
6 | through the person's hand-delivered or mailed material, | ||||||
7 | and promotional codes distributed by the person through | ||||||
8 | radio or other broadcast media. The provisions of this | ||||||
9 | paragraph (1.1) shall apply only if the cumulative gross | ||||||
10 | receipts from sales of tangible personal property by the | ||||||
11 | retailer to customers who are referred to the retailer by | ||||||
12 | all persons in this State under such contracts exceed | ||||||
13 | $10,000 during the preceding 4 quarterly periods ending on | ||||||
14 | the last day of March, June, September, and December. A | ||||||
15 | retailer meeting the requirements of this paragraph (1.1) | ||||||
16 | shall be presumed to be maintaining a place of business in | ||||||
17 | this State but may rebut this presumption by submitting | ||||||
18 | proof that the referrals or other activities pursued within | ||||||
19 | this State by such persons were not sufficient to meet the | ||||||
20 | nexus standards of the United States Constitution during | ||||||
21 | the preceding 4 quarterly periods. | ||||||
22 | (1.2) Beginning July 1, 2011, a retailer having a | ||||||
23 | contract with a person located in this State under which: | ||||||
24 | (A) the retailer sells the same or substantially | ||||||
25 | similar line of products as the person located in this | ||||||
26 | State and does so using an identical or substantially |
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1 | similar name, trade name, or trademark as the person | ||||||
2 | located in this State; and | ||||||
3 | (B) the retailer provides a commission or other | ||||||
4 | consideration to the person located in this State based | ||||||
5 | upon the sale of tangible personal property by the | ||||||
6 | retailer. | ||||||
7 | The provisions of this paragraph (1.2) shall apply only | ||||||
8 | if the cumulative gross receipts from sales of tangible | ||||||
9 | personal property by the retailer to customers in this | ||||||
10 | State under all such contracts exceed $10,000 during the | ||||||
11 | preceding 4 quarterly periods ending on the last day of | ||||||
12 | March, June, September, and December.
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13 | (2) (Blank).
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14 | (3) (Blank).
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15 | (4) (Blank).
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16 | (5) (Blank).
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17 | (6) (Blank).
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18 | (7) (Blank).
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19 | (8) (Blank).
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20 | (9) Beginning October 1, 2018, a retailer making sales | ||||||
21 | of tangible personal property to purchasers in Illinois | ||||||
22 | from outside of Illinois if: | ||||||
23 | (A) the cumulative gross receipts from sales of | ||||||
24 | tangible personal property to purchasers in Illinois | ||||||
25 | are $100,000 or more; or | ||||||
26 | (B) the retailer enters into 200 or more separate |
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1 | transactions for the sale of tangible personal | ||||||
2 | property to purchasers in Illinois. | ||||||
3 | The retailer shall determine on a quarterly basis, | ||||||
4 | ending on the last day of March, June, September, and | ||||||
5 | December, whether he or she meets the criteria of either | ||||||
6 | subparagraph (A) or (B) of this paragraph (9) for the | ||||||
7 | preceding 12-month period. If the retailer meets the | ||||||
8 | threshold of either subparagraph (A) or (B) for a 12-month | ||||||
9 | period, he or she is considered a retailer maintaining a | ||||||
10 | place of business in this State and is required to collect | ||||||
11 | and remit the tax imposed under this Act and file returns | ||||||
12 | for one year. At the end of that one-year period, the | ||||||
13 | retailer shall determine whether he or she met the | ||||||
14 | threshold of either subparagraph (A) or (B) during the | ||||||
15 | preceding 12-month period. If the retailer met the criteria | ||||||
16 | in either subparagraph (A) or (B) for the preceding | ||||||
17 | 12-month period, he or she is considered a retailer | ||||||
18 | maintaining a place of business in this State and is | ||||||
19 | required to collect and remit the tax imposed under this | ||||||
20 | Act and file returns for the subsequent year. If at the end | ||||||
21 | of a one-year period a retailer that was required to | ||||||
22 | collect and remit the tax imposed under this Act determines | ||||||
23 | that he or she did not meet the threshold in either | ||||||
24 | subparagraph (A) or (B) during the preceding 12-month | ||||||
25 | period, the retailer shall subsequently determine on a | ||||||
26 | quarterly basis, ending on the last day of March, June, |
| |||||||
| |||||||
1 | September, and December, whether he or she meets the | ||||||
2 | threshold of either subparagraph (A) or (B) for the | ||||||
3 | preceding 12-month period. | ||||||
4 | Beginning January 1, 2020, neither the gross receipts | ||||||
5 | from nor the number of separate transactions for sales of | ||||||
6 | tangible personal property to purchasers in Illinois that a | ||||||
7 | retailer makes through a marketplace facilitator and for | ||||||
8 | which the retailer has received a certification from the | ||||||
9 | marketplace facilitator pursuant to Section 2d of this Act | ||||||
10 | shall be included for purposes of determining whether he or | ||||||
11 | she has met the thresholds of this paragraph (9). | ||||||
12 | (10) Beginning January 1, 2020, a marketplace | ||||||
13 | facilitator that meets a threshold set forth in subsection | ||||||
14 | (b) of Section 2d of this Act. | ||||||
15 | "Bulk vending machine" means a vending machine,
containing | ||||||
16 | unsorted confections, nuts, toys, or other items designed
| ||||||
17 | primarily to be used or played with by children
which, when a | ||||||
18 | coin or coins of a denomination not larger than $0.50 are | ||||||
19 | inserted, are dispensed in equal portions, at random and
| ||||||
20 | without selection by the customer.
| ||||||
21 | (Source: P.A. 100-587, eff. 6-4-18; 101-9, eff. 6-5-19; 101-31, | ||||||
22 | eff. 1-1-20; 101-604, eff. 1-1-20.)
| ||||||
23 | Section 10. The Retailers' Occupation Tax Act is amended by | ||||||
24 | changing Section 1 as follows:
|
| |||||||
| |||||||
1 | (35 ILCS 120/1) (from Ch. 120, par. 440)
| ||||||
2 | Sec. 1. Definitions. "Sale at retail" means any transfer of | ||||||
3 | the
ownership of or title to
tangible personal property to a | ||||||
4 | purchaser, for the purpose of use or
consumption, and not for | ||||||
5 | the purpose of resale in any form as tangible
personal property | ||||||
6 | to the extent not first subjected to a use for which it
was | ||||||
7 | purchased, for a valuable consideration: Provided that the | ||||||
8 | property
purchased is deemed to be purchased for the purpose of | ||||||
9 | resale, despite
first being used, to the extent to which it is | ||||||
10 | resold as an ingredient of
an intentionally produced product or | ||||||
11 | byproduct of manufacturing. For this
purpose, slag produced as | ||||||
12 | an incident to manufacturing pig iron or steel
and sold is | ||||||
13 | considered to be an intentionally produced byproduct of
| ||||||
14 | manufacturing. Transactions whereby the possession of the | ||||||
15 | property is
transferred but the seller retains the title as | ||||||
16 | security for payment of the
selling price shall be deemed to be | ||||||
17 | sales.
| ||||||
18 | "Sale at retail" shall be construed to include any transfer | ||||||
19 | of the
ownership of or title to tangible personal property to a | ||||||
20 | purchaser, for use
or consumption by any other person to whom | ||||||
21 | such purchaser may transfer the
tangible personal property | ||||||
22 | without a valuable consideration, and to include
any transfer, | ||||||
23 | whether made for or without a valuable consideration, for
| ||||||
24 | resale in any form as tangible personal property unless made in | ||||||
25 | compliance
with Section 2c of this Act.
| ||||||
26 | Sales of tangible personal property, which property, to the |
| |||||||
| |||||||
1 | extent not
first subjected to a use for which it was purchased, | ||||||
2 | as an ingredient or
constituent, goes into and forms a part of | ||||||
3 | tangible personal property
subsequently the subject of a "Sale | ||||||
4 | at retail", are not sales at retail as
defined in this Act: | ||||||
5 | Provided that the property purchased is deemed to be
purchased | ||||||
6 | for the purpose of resale, despite first being used, to the
| ||||||
7 | extent to which it is resold as an ingredient of an | ||||||
8 | intentionally produced
product or byproduct of manufacturing.
| ||||||
9 | "Sale at retail" shall be construed to include any Illinois | ||||||
10 | florist's
sales transaction in which the purchase order is | ||||||
11 | received in Illinois by a
florist and the sale is for use or | ||||||
12 | consumption, but the Illinois florist
has a florist in another | ||||||
13 | state deliver the property to the purchaser or the
purchaser's | ||||||
14 | donee in such other state.
| ||||||
15 | Nonreusable tangible personal property that is used by | ||||||
16 | persons engaged in
the business of operating a restaurant, | ||||||
17 | cafeteria, or drive-in is a sale for
resale when it is | ||||||
18 | transferred to customers in the ordinary course of business
as | ||||||
19 | part of the sale of food or beverages and is used to deliver, | ||||||
20 | package, or
consume food or beverages, regardless of where | ||||||
21 | consumption of the food or
beverages occurs. Examples of those | ||||||
22 | items include, but are not limited to
nonreusable, paper and | ||||||
23 | plastic cups, plates, baskets, boxes, sleeves, buckets
or other | ||||||
24 | containers, utensils, straws, placemats, napkins, doggie bags, | ||||||
25 | and
wrapping or packaging
materials that are transferred to | ||||||
26 | customers as part of the sale of food or
beverages in the |
| |||||||
| |||||||
1 | ordinary course of business.
| ||||||
2 | The purchase, employment and transfer of such tangible | ||||||
3 | personal property
as newsprint and ink for the primary purpose | ||||||
4 | of conveying news (with or
without other information) is not a | ||||||
5 | purchase, use or sale of tangible
personal property.
| ||||||
6 | A person whose activities are organized and conducted | ||||||
7 | primarily as a
not-for-profit service enterprise, and who | ||||||
8 | engages in selling tangible
personal property at retail | ||||||
9 | (whether to the public or merely to members and
their guests) | ||||||
10 | is engaged in the business of selling tangible personal
| ||||||
11 | property at retail with respect to such transactions, excepting | ||||||
12 | only a
person organized and operated exclusively for | ||||||
13 | charitable, religious or
educational purposes either (1), to | ||||||
14 | the extent of sales by such person to
its members, students, | ||||||
15 | patients or inmates of tangible personal property to
be used | ||||||
16 | primarily for the purposes of such person, or (2), to the | ||||||
17 | extent of
sales by such person of tangible personal property | ||||||
18 | which is not sold or
offered for sale by persons organized for | ||||||
19 | profit. The selling of school
books and school supplies by | ||||||
20 | schools at retail to students is not
"primarily for the | ||||||
21 | purposes of" the school which does such selling. The
provisions | ||||||
22 | of this paragraph shall not apply to nor subject to taxation
| ||||||
23 | occasional dinners, socials or similar activities of a person | ||||||
24 | organized and
operated exclusively for charitable, religious | ||||||
25 | or educational purposes,
whether or not such activities are | ||||||
26 | open to the public.
|
| |||||||
| |||||||
1 | A person who is the recipient of a grant or contract under | ||||||
2 | Title VII of
the Older Americans Act of 1965 (P.L. 92-258) and | ||||||
3 | serves meals to
participants in the federal Nutrition Program | ||||||
4 | for the Elderly in return for
contributions established in | ||||||
5 | amount by the individual participant pursuant
to a schedule of | ||||||
6 | suggested fees as provided for in the federal Act is not
| ||||||
7 | engaged in the business of selling tangible personal property | ||||||
8 | at retail
with respect to such transactions.
| ||||||
9 | "Purchaser" means anyone who, through a sale at retail, | ||||||
10 | acquires the
ownership of or title to tangible personal | ||||||
11 | property for a valuable
consideration.
| ||||||
12 | "Reseller of motor fuel" means any person engaged in the | ||||||
13 | business of selling
or delivering or transferring title of | ||||||
14 | motor fuel to another person
other than for use or consumption.
| ||||||
15 | No person shall act as a reseller of motor fuel within this | ||||||
16 | State without
first being registered as a reseller pursuant to | ||||||
17 | Section 2c or a retailer
pursuant to Section 2a.
| ||||||
18 | "Selling price" or the "amount of sale" means the | ||||||
19 | consideration for a
sale valued in money whether received in | ||||||
20 | money or otherwise, including
cash, credits, property, other | ||||||
21 | than as hereinafter provided, and services,
but, prior to | ||||||
22 | January 1, 2020 and on and after July 1, 2020 , not including | ||||||
23 | the value of or credit given for traded-in tangible
personal | ||||||
24 | property where the item that is traded-in is of like kind and
| ||||||
25 | character as that which is being sold; beginning January 1, | ||||||
26 | 2020 and through June 30, 2020 , "selling price" includes the |
| |||||||
| |||||||
1 | portion of the value of or credit given for traded-in motor | ||||||
2 | vehicles of the First Division as defined in Section 1-146 of | ||||||
3 | the Illinois Vehicle Code of like kind and character as that | ||||||
4 | which is being sold that exceeds $10,000. "Selling price" shall | ||||||
5 | be determined without any
deduction on account of the cost of | ||||||
6 | the property sold, the cost of
materials used, labor or service | ||||||
7 | cost or any other expense whatsoever, but
does not include | ||||||
8 | charges that are added to prices by sellers on account of
the | ||||||
9 | seller's tax liability under this Act, or on account of the | ||||||
10 | seller's
duty to collect, from the purchaser, the tax that is | ||||||
11 | imposed by the Use Tax
Act, or, except as otherwise provided | ||||||
12 | with respect to any cigarette tax imposed by a home rule unit, | ||||||
13 | on account of the seller's tax liability under any local | ||||||
14 | occupation tax administered by the Department, or, except as | ||||||
15 | otherwise provided with respect to any cigarette tax imposed by | ||||||
16 | a home rule unit on account of the seller's duty to collect, | ||||||
17 | from the purchasers, the tax that is imposed under any local | ||||||
18 | use tax administered by the Department.
Effective December 1, | ||||||
19 | 1985, "selling price" shall include charges that
are added to | ||||||
20 | prices by sellers on account of the seller's
tax liability | ||||||
21 | under the Cigarette Tax Act, on account of the sellers'
duty to | ||||||
22 | collect, from the purchaser, the tax imposed under the | ||||||
23 | Cigarette
Use Tax Act, and on account of the seller's duty to | ||||||
24 | collect, from the
purchaser, any cigarette tax imposed by a | ||||||
25 | 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 | 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 |
| |||||||
| |||||||
1 | bulk vending machine, does not constitute engaging in a
| ||||||
2 | business of selling such tangible personal property at retail | ||||||
3 | within the
meaning of this Act; provided that any person who is | ||||||
4 | engaged in a business
which is not subject to the tax imposed | ||||||
5 | by this Act because of involving
the sale of or a contract to | ||||||
6 | sell real estate or a construction contract to
improve real | ||||||
7 | estate or a construction contract to engineer, install, and
| ||||||
8 | maintain an integrated system of products, but who, in the | ||||||
9 | course of
conducting such business,
transfers tangible | ||||||
10 | personal property to users or consumers in the finished
form in | ||||||
11 | which it was purchased, and which does not become real estate | ||||||
12 | or was
not engineered and installed, under any provision of a | ||||||
13 | construction contract or
real estate sale or real estate sales | ||||||
14 | agreement entered into with some other
person arising out of or | ||||||
15 | because of such nontaxable business, is engaged in the
business | ||||||
16 | of selling tangible personal property at retail to the extent | ||||||
17 | of the
value of the tangible personal property so transferred. | ||||||
18 | If, in such a
transaction, a separate charge is made for the | ||||||
19 | tangible personal property so
transferred, the value of such | ||||||
20 | property, for the purpose of this Act, shall be
the amount so | ||||||
21 | separately charged, but not less than the cost of such property
| ||||||
22 | to the transferor; if no separate charge is made, the value of | ||||||
23 | such property,
for the purposes of this Act, is the cost to the | ||||||
24 | transferor of such tangible
personal property. Construction | ||||||
25 | contracts for the improvement of real estate
consisting of | ||||||
26 | engineering, installation, and maintenance of voice, data, |
| |||||||
| |||||||
1 | video,
security, and all telecommunication systems do not | ||||||
2 | constitute engaging in a
business of selling tangible personal | ||||||
3 | property at retail within the meaning of
this Act if they are | ||||||
4 | sold at one specified contract price.
| ||||||
5 | A person who holds himself or herself out as being engaged | ||||||
6 | (or who habitually
engages) in selling tangible personal | ||||||
7 | property at retail is a person
engaged in the business of | ||||||
8 | selling tangible personal property at retail
hereunder with | ||||||
9 | respect to such sales (and not primarily in a service
| ||||||
10 | occupation) notwithstanding the fact that such person designs | ||||||
11 | and produces
such tangible personal property on special order | ||||||
12 | for the purchaser and in
such a way as to render the property | ||||||
13 | of value only to such purchaser, if
such tangible personal | ||||||
14 | property so produced on special order serves
substantially the | ||||||
15 | same function as stock or standard items of tangible
personal | ||||||
16 | property that are sold at retail.
| ||||||
17 | Persons who engage in the business of transferring tangible | ||||||
18 | personal
property upon the redemption of trading stamps are | ||||||
19 | engaged in the business
of selling such property at retail and | ||||||
20 | shall be liable for and shall pay
the tax imposed by this Act | ||||||
21 | on the basis of the retail value of the
property transferred | ||||||
22 | upon redemption of such stamps.
| ||||||
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 | "Remote retailer" means a retailer that does not maintain | ||||||
4 | within this State, directly or by a subsidiary, an office, | ||||||
5 | distribution house, sales house, warehouse or other place of | ||||||
6 | business, or any agent or other representative operating within | ||||||
7 | this State under the authority of the retailer or its | ||||||
8 | subsidiary, irrespective of whether such place of business or | ||||||
9 | agent is located here permanently or temporarily or whether | ||||||
10 | such retailer or subsidiary is licensed to do business in this | ||||||
11 | State. | ||||||
12 | "Marketplace" means a physical or electronic place, forum, | ||||||
13 | platform, application, or other method by which a marketplace | ||||||
14 | seller sells or offers to sell items. | ||||||
15 | "Marketplace facilitator" means a person who, pursuant to | ||||||
16 | an agreement with an unrelated third-party marketplace seller, | ||||||
17 | directly or indirectly through one or more affiliates | ||||||
18 | facilitates a retail sale by an unrelated third party | ||||||
19 | marketplace seller by: | ||||||
20 | (1) listing or advertising for sale by the marketplace | ||||||
21 | seller in a marketplace, tangible personal property that is | ||||||
22 | subject to tax under this Act; and | ||||||
23 | (2) either directly or indirectly, through agreements | ||||||
24 | or arrangements with third parties, collecting payment | ||||||
25 | from the customer and transmitting that payment to the | ||||||
26 | marketplace seller regardless of whether the marketplace |
| |||||||
| |||||||
1 | facilitator receives compensation or other consideration | ||||||
2 | in exchange for its services. | ||||||
3 | A person who provides advertising services, including | ||||||
4 | listing products for sale, is not considered a marketplace | ||||||
5 | facilitator, so long as the advertising service platform or | ||||||
6 | forum does not engage, directly or indirectly through one or | ||||||
7 | more affiliated persons, in the activities described in | ||||||
8 | paragraph (2) of this definition of "marketplace facilitator". | ||||||
9 | "Marketplace seller" means a person that makes sales | ||||||
10 | through a marketplace operated by an unrelated third party | ||||||
11 | marketplace facilitator. | ||||||
12 | (Source: P.A. 101-31, eff. 6-28-19; 101-604, eff. 1-1-20.)
| ||||||
13 | Section 99. Effective date. This Act takes effect upon | ||||||
14 | becoming law.
|