Bill Text: IL SB1783 | 2011-2012 | 97th General Assembly | Introduced

---

Bill Title: Amends the Use Tax Act and the Service Use Tax Act. Provides that the terms "retailer maintaining a place of business in this State" and "serviceman maintaining a place of business in this State" include a retailer or serviceman having any representative, agent, salesperson, canvasser, independent contractor, or solicitor operating in this State under the authority of the retailer or serviceman or its subsidiary for the purpose of selling, delivering, installing, assembling, or taking orders for any tangible personal property. Provides that an advertising link or affiliate marketing link on a website is not sufficient to qualify the retailer or serviceman as a retailer or serviceman maintaining a place of business in this State. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2013-01-08 - Session Sine Die [SB1783 Detail]

Download: Illinois-2011-SB1783-Introduced.html

---

97TH GENERAL ASSEMBLY State of Illinois 2011 and 2012 SB1783 Introduced 2/9/2011, by Sen. Antonio Muñoz SYNOPSIS AS INTRODUCED:
35 ILCS 105/2 from Ch. 120, par. 439.2
35 ILCS 110/2 from Ch. 120, par. 439.32
Amends the Use Tax Act and the Service Use Tax Act. Provides that the terms "retailer maintaining a place of business in this State" and "serviceman maintaining a place of business in this State" include a retailer or serviceman having any representative, agent, salesperson, canvasser, independent contractor, or solicitor operating in this State under the authority of the retailer or serviceman or its subsidiary for the purpose of selling, delivering, installing, assembling, or taking orders for any tangible personal property. Provides that an advertising link or affiliate marketing link on a website is not sufficient to qualify the retailer or serviceman as a retailer or serviceman maintaining a place of business in this State. Effective immediately.
LRB097 10038 HLH 50209 b
FISCAL NOTE ACT MAY APPLY
A BILL FOR
SB1783 LRB097 10038 HLH 50209 b
AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Use Tax Act is amended by changing Section 2
as follows:
(35 ILCS 105/2) (from Ch. 120, par. 439.2)
Sec. 2. "Use" means the exercise by any person of any right
or power over tangible personal property incident to the
ownership of that property, except that it does not include the
sale of such property in any form as tangible personal property
in the regular course of business to the extent that such
property is not first subjected to a use for which it was
purchased, and does not include the use of such property by its
owner for demonstration purposes: Provided that the property
purchased is deemed to be purchased for the purpose of resale,
despite first being used, to the extent to which it is resold
as an ingredient of an intentionally produced product or
by-product of manufacturing. "Use" does not mean the
demonstration use or interim use of tangible personal property
by a retailer before he sells that tangible personal property.
For watercraft or aircraft, if the period of demonstration use
or interim use by the retailer exceeds 18 months, the retailer
shall pay on the retailers' original cost price the tax imposed

SB1783 - 2 - LRB097 10038 HLH 50209 b
by this Act, and no credit for that tax is permitted if the
watercraft or aircraft is subsequently sold by the retailer.
"Use" does not mean the physical incorporation of tangible
personal property, to the extent not first subjected to a use
for which it was purchased, as an ingredient or constituent,
into other tangible personal property (a) which is sold in the
regular course of business or (b) which the person
incorporating such ingredient or constituent therein has
undertaken at the time of such purchase to cause to be
transported in interstate commerce to destinations outside the
State of Illinois: Provided that the property purchased is
deemed to be purchased for the purpose of resale, despite first
being used, to the extent to which it is resold as an
ingredient of an intentionally produced product or by-product
of manufacturing.
"Watercraft" means a Class 2, Class 3, or Class 4
watercraft as defined in Section 3-2 of the Boat Registration
and Safety Act, a personal watercraft, or any boat equipped
with an inboard motor.
"Purchase at retail" means the acquisition of the ownership
of or title to tangible personal property through a sale at
retail.
"Purchaser" means anyone who, through a sale at retail,
acquires the ownership of tangible personal property for a
valuable consideration.
"Sale at retail" means any transfer of the ownership of or

SB1783 - 3 - LRB097 10038 HLH 50209 b
title to tangible personal property to a purchaser, for the
purpose of use, and not for the purpose of resale in any form
as tangible personal property to the extent not first subjected
to a use for which it was purchased, for a valuable
consideration: Provided that the property purchased is deemed
to be purchased for the purpose of resale, despite first being
used, to the extent to which it is resold as an ingredient of
an intentionally produced product or by-product of
manufacturing. For this purpose, slag produced as an incident
to manufacturing pig iron or steel and sold is considered to be
an intentionally produced by-product of manufacturing. "Sale
at retail" includes any such transfer made for resale unless
made in compliance with Section 2c of the Retailers' Occupation
Tax Act, as incorporated by reference into Section 12 of this
Act. Transactions whereby the possession of the property is
transferred but the seller retains the title as security for
payment of the selling price are sales.
"Sale at retail" shall also be construed to include any
Illinois florist's sales transaction in which the purchase
order is received in Illinois by a florist and the sale is for
use or consumption, but the Illinois florist has a florist in
another state deliver the property to the purchaser or the
purchaser's donee in such other state.
Nonreusable tangible personal property that is used by
persons engaged in the business of operating a restaurant,
cafeteria, or drive-in is a sale for resale when it is

SB1783 - 4 - LRB097 10038 HLH 50209 b
transferred to customers in the ordinary course of business as
part of the sale of food or beverages and is used to deliver,
package, or consume food or beverages, regardless of where
consumption of the food or beverages occurs. Examples of those
items include, but are not limited to nonreusable, paper and
plastic cups, plates, baskets, boxes, sleeves, buckets or other
containers, utensils, straws, placemats, napkins, doggie bags,
and wrapping or packaging materials that are transferred to
customers as part of the sale of food or beverages in the
ordinary course of business.
The purchase, employment and transfer of such tangible
personal property as newsprint and ink for the primary purpose
of conveying news (with or without other information) is not a
purchase, use or sale of tangible personal property.
"Selling price" means the consideration for a sale valued
in money whether received in money or otherwise, including
cash, credits, property other than as hereinafter provided, and
services, but not including the value of or credit given for
traded-in tangible personal property where the item that is
traded-in is of like kind and character as that which is being
sold, and shall be determined without any deduction on account
of the cost of the property sold, the cost of materials used,
labor or service cost or any other expense whatsoever, but does
not include interest or finance charges which appear as
separate items on the bill of sale or sales contract nor
charges that are added to prices by sellers on account of the

SB1783 - 5 - LRB097 10038 HLH 50209 b
seller's tax liability under the "Retailers' Occupation Tax
Act", or on account of the seller's duty to collect, from the
purchaser, the tax that is imposed by this Act, or, except as
otherwise provided with respect to any cigarette tax imposed by
a home rule unit, on account of the seller's tax liability
under any local occupation tax administered by the Department,
or, except as otherwise provided with respect to any cigarette
tax imposed by a home rule unit on account of the seller's duty
to collect, from the purchasers, the tax that is imposed under
any local use tax administered by the Department. Effective
December 1, 1985, "selling price" shall include charges that
are added to prices by sellers on account of the seller's tax
liability under the Cigarette Tax Act, on account of the
seller's duty to collect, from the purchaser, the tax imposed
under the Cigarette Use Tax Act, and on account of the seller's
duty to collect, from the purchaser, any cigarette tax imposed
by a home rule unit.
The phrase "like kind and character" shall be liberally
construed (including but not limited to any form of motor
vehicle for any form of motor vehicle, or any kind of farm or
agricultural implement for any other kind of farm or
agricultural implement), while not including a kind of item
which, if sold at retail by that retailer, would be exempt from
retailers' occupation tax and use tax as an isolated or
occasional sale.
"Department" means the Department of Revenue.

SB1783 - 6 - LRB097 10038 HLH 50209 b
"Person" means any natural individual, firm, partnership,
association, joint stock company, joint adventure, public or
private corporation, limited liability company, or a receiver,
executor, trustee, guardian or other representative appointed
by order of any court.
"Retailer" means and includes every person engaged in the
business of making sales at retail as defined in this Section.
A person who holds himself or herself out as being engaged
(or who habitually engages) in selling tangible personal
property at retail is a retailer hereunder with respect to such
sales (and not primarily in a service occupation)
notwithstanding the fact that such person designs and produces
such tangible personal property on special order for the
purchaser and in such a way as to render the property of value
only to such purchaser, if such tangible personal property so
produced on special order serves substantially the same
function as stock or standard items of tangible personal
property that are sold at retail.
A person whose activities are organized and conducted
primarily as a not-for-profit service enterprise, and who
engages in selling tangible personal property at retail
(whether to the public or merely to members and their guests)
is a retailer with respect to such transactions, excepting only
a person organized and operated exclusively for charitable,
religious or educational purposes either (1), to the extent of
sales by such person to its members, students, patients or

SB1783 - 7 - LRB097 10038 HLH 50209 b
inmates of tangible personal property to be used primarily for
the purposes of such person, or (2), to the extent of sales by
such person of tangible personal property which is not sold or
offered for sale by persons organized for profit. The selling
of school books and school supplies by schools at retail to
students is not "primarily for the purposes of" the school
which does such selling. This paragraph does not apply to nor
subject to taxation occasional dinners, social or similar
activities of a person organized and operated exclusively for
charitable, religious or educational purposes, whether or not
such activities are open to the public.
A person who is the recipient of a grant or contract under
Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
serves meals to participants in the federal Nutrition Program
for the Elderly in return for contributions established in
amount by the individual participant pursuant to a schedule of
suggested fees as provided for in the federal Act is not a
retailer under this Act with respect to such transactions.
Persons who engage in the business of transferring tangible
personal property upon the redemption of trading stamps are
retailers hereunder when engaged in such business.
The isolated or occasional sale of tangible personal
property at retail by a person who does not hold himself out as
being engaged (or who does not habitually engage) in selling
such tangible personal property at retail or a sale through a
bulk vending machine does not make such person a retailer

SB1783 - 8 - LRB097 10038 HLH 50209 b
hereunder. However, any person who is engaged in a business
which is not subject to the tax imposed by the "Retailers'
Occupation Tax Act" because of involving the sale of or a
contract to sell real estate or a construction contract to
improve real estate, but who, in the course of conducting such
business, transfers tangible personal property to users or
consumers in the finished form in which it was purchased, and
which does not become real estate, under any provision of a
construction contract or real estate sale or real estate sales
agreement entered into with some other person arising out of or
because of such nontaxable business, is a retailer to the
extent of the value of the tangible personal property so
transferred. If, in such transaction, a separate charge is made
for the tangible personal property so transferred, the value of
such property, for the purposes of this Act, is the amount so
separately charged, but not less than the cost of such property
to the transferor; if no separate charge is made, the value of
such property, for the purposes of this Act, is the cost to the
transferor of such tangible personal property.
"Retailer maintaining a place of business in this State",
or any like term, means and includes any of the following
retailers:
1. A retailer having or maintaining within this State,
directly or by a subsidiary, an office, distribution house,
sales house, warehouse or other place of business, or any
agent or other representative operating within this State

SB1783 - 9 - LRB097 10038 HLH 50209 b
under the authority of the retailer or its subsidiary,
irrespective of whether such place of business or agent or
other representative is located here permanently or
temporarily, or whether such retailer or subsidiary is
licensed to do business in this State. However, the
ownership of property that is located at the premises of a
printer with which the retailer has contracted for printing
and that consists of the final printed product, property
that becomes a part of the final printed product, or copy
from which the printed product is produced shall not result
in the retailer being deemed to have or maintain an office,
distribution house, sales house, warehouse, or other place
of business within this State.
1.1. Beginning July 1, 2011, a retailer having any
representative, agent, salesperson, canvasser, independent
contractor, or solicitor operating in this State under the
authority of the retailer or its subsidiary for the purpose
of selling, delivering, installing, assembling, or taking
orders for any tangible personal property.
2. A retailer soliciting orders for tangible personal
property by means of a telecommunication or television
shopping system (which utilizes toll free numbers) which is
intended by the retailer to be broadcast by cable
television or other means of broadcasting, to consumers
located in this State.
3. A retailer, pursuant to a contract with a

SB1783 - 10 - LRB097 10038 HLH 50209 b
broadcaster or publisher located in this State, soliciting
orders for tangible personal property by means of
advertising which is disseminated primarily to consumers
located in this State and only secondarily to bordering
jurisdictions.
4. A retailer soliciting orders for tangible personal
property by mail if the solicitations are substantial and
recurring and if the retailer benefits from any banking,
financing, debt collection, telecommunication, or
marketing activities occurring in this State or benefits
from the location in this State of authorized installation,
servicing, or repair facilities.
5. A retailer that is owned or controlled by the same
interests that own or control any retailer engaging in
business in the same or similar line of business in this
State.
6. A retailer having a franchisee or licensee operating
under its trade name if the franchisee or licensee is
required to collect the tax under this Section.
7. A retailer, pursuant to a contract with a cable
television operator located in this State, soliciting
orders for tangible personal property by means of
advertising which is transmitted or distributed over a
cable television system in this State.
8. A retailer engaging in activities in Illinois, which
activities in the state in which the retail business

SB1783 - 11 - LRB097 10038 HLH 50209 b
engaging in such activities is located would constitute
maintaining a place of business in that state.
An advertising link or affiliate marketing link on a
website is not sufficient to qualify the retailer as a retailer
maintaining a place of business in this State.
"Bulk vending machine" means a vending machine, containing
unsorted confections, nuts, toys, or other items designed
primarily to be used or played with by children which, when a
coin or coins of a denomination not larger than $0.50 are
inserted, are dispensed in equal portions, at random and
without selection by the customer.
(Source: P.A. 94-1074, eff. 12-26-06; 95-723, eff. 6-23-08.)
Section 10. The Service Use Tax Act is amended by changing
Section 2 as follows:
(35 ILCS 110/2) (from Ch. 120, par. 439.32)
Sec. 2. "Use" means the exercise by any person of any right
or power over tangible personal property incident to the
ownership of that property, but does not include the sale or
use for demonstration by him of that property in any form as
tangible personal property in the regular course of business.
"Use" does not mean the interim use of tangible personal
property nor the physical incorporation of tangible personal
property, as an ingredient or constituent, into other tangible
personal property, (a) which is sold in the regular course of

SB1783 - 12 - LRB097 10038 HLH 50209 b
business or (b) which the person incorporating such ingredient
or constituent therein has undertaken at the time of such
purchase to cause to be transported in interstate commerce to
destinations outside the State of Illinois.
"Purchased from a serviceman" means the acquisition of the
ownership of, or title to, tangible personal property through a
sale of service.
"Purchaser" means any person who, through a sale of
service, acquires the ownership of, or title to, any tangible
personal property.
"Cost price" means the consideration paid by the serviceman
for a purchase valued in money, whether paid in money or
otherwise, including cash, credits and services, and shall be
determined without any deduction on account of the supplier's
cost of the property sold or on account of any other expense
incurred by the supplier. When a serviceman contracts out part
or all of the services required in his sale of service, it
shall be presumed that the cost price to the serviceman of the
property transferred to him or her by his or her subcontractor
is equal to 50% of the subcontractor's charges to the
serviceman in the absence of proof of the consideration paid by
the subcontractor for the purchase of such property.
"Selling price" means the consideration for a sale valued
in money whether received in money or otherwise, including
cash, credits and service, and shall be determined without any
deduction on account of the serviceman's cost of the property

SB1783 - 13 - LRB097 10038 HLH 50209 b
sold, the cost of materials used, labor or service cost or any
other expense whatsoever, but does not include interest or
finance charges which appear as separate items on the bill of
sale or sales contract nor charges that are added to prices by
sellers on account of the seller's duty to collect, from the
purchaser, the tax that is imposed by this Act.
"Department" means the Department of Revenue.
"Person" means any natural individual, firm, partnership,
association, joint stock company, joint venture, public or
private corporation, limited liability company, and any
receiver, executor, trustee, guardian or other representative
appointed by order of any court.
"Sale of service" means any transaction except:
(1) a retail sale of tangible personal property taxable
under the Retailers' Occupation Tax Act or under the Use
Tax Act.
(2) a sale of tangible personal property for the
purpose of resale made in compliance with Section 2c of the
Retailers' Occupation Tax Act.
(3) except as hereinafter provided, a sale or transfer
of tangible personal property as an incident to the
rendering of service for or by any governmental body, or
for or by any corporation, society, association,
foundation or institution organized and operated
exclusively for charitable, religious or educational
purposes or any not-for-profit corporation, society,

SB1783 - 14 - LRB097 10038 HLH 50209 b
association, foundation, institution or organization which
has no compensated officers or employees and which is
organized and operated primarily for the recreation of
persons 55 years of age or older. A limited liability
company may qualify for the exemption under this paragraph
only if the limited liability company is organized and
operated exclusively for educational purposes.
(4) a sale or transfer of tangible personal property as
an incident to the rendering of service for interstate
carriers for hire for use as rolling stock moving in
interstate commerce or by lessors under a lease of one year
or longer, executed or in effect at the time of purchase of
personal property, to interstate carriers for hire for use
as rolling stock moving in interstate commerce so long as
so used by such interstate carriers for hire, and equipment
operated by a telecommunications provider, licensed as a
common carrier by the Federal Communications Commission,
which is permanently installed in or affixed to aircraft
moving in interstate commerce.
(4a) a sale or transfer of tangible personal property
as an incident to the rendering of service for owners,
lessors, or shippers of tangible personal property which is
utilized by interstate carriers for hire for use as rolling
stock moving in interstate commerce so long as so used by
interstate carriers for hire, and equipment operated by a
telecommunications provider, licensed as a common carrier

SB1783 - 15 - LRB097 10038 HLH 50209 b
by the Federal Communications Commission, which is
permanently installed in or affixed to aircraft moving in
interstate commerce.
(4a-5) on and after July 1, 2003 and through June 30,
2004, a sale or transfer of a motor vehicle of the second
division with a gross vehicle weight in excess of 8,000
pounds as an incident to the rendering of service if that
motor vehicle is subject to the commercial distribution fee
imposed under Section 3-815.1 of the Illinois Vehicle Code.
Beginning on July 1, 2004 and through June 30, 2005, the
use in this State of motor vehicles of the second division:
(i) with a gross vehicle weight rating in excess of 8,000
pounds; (ii) that are subject to the commercial
distribution fee imposed under Section 3-815.1 of the
Illinois Vehicle Code; and (iii) that are primarily used
for commercial purposes. Through June 30, 2005, this
exemption applies to repair and replacement parts added
after the initial purchase of such a motor vehicle if that
motor vehicle is used in a manner that would qualify for
the rolling stock exemption otherwise provided for in this
Act. For purposes of this paragraph, "used for commercial
purposes" means the transportation of persons or property
in furtherance of any commercial or industrial enterprise
whether for-hire or not.
(5) a sale or transfer of machinery and equipment used
primarily in the process of the manufacturing or

SB1783 - 16 - LRB097 10038 HLH 50209 b
assembling, either in an existing, an expanded or a new
manufacturing facility, of tangible personal property for
wholesale or retail sale or lease, whether such sale or
lease is made directly by the manufacturer or by some other
person, whether the materials used in the process are owned
by the manufacturer or some other person, or whether such
sale or lease is made apart from or as an incident to the
seller's engaging in a service occupation and the
applicable tax is a Service Use Tax or Service Occupation
Tax, rather than Use Tax or Retailers' Occupation Tax.
(5a) the repairing, reconditioning or remodeling, for
a common carrier by rail, of tangible personal property
which belongs to such carrier for hire, and as to which
such carrier receives the physical possession of the
repaired, reconditioned or remodeled item of tangible
personal property in Illinois, and which such carrier
transports, or shares with another common carrier in the
transportation of such property, out of Illinois on a
standard uniform bill of lading showing the person who
repaired, reconditioned or remodeled the property to a
destination outside Illinois, for use outside Illinois.
(5b) a sale or transfer of tangible personal property
which is produced by the seller thereof on special order in
such a way as to have made the applicable tax the Service
Occupation Tax or the Service Use Tax, rather than the
Retailers' Occupation Tax or the Use Tax, for an interstate

SB1783 - 17 - LRB097 10038 HLH 50209 b
carrier by rail which receives the physical possession of
such property in Illinois, and which transports such
property, or shares with another common carrier in the
transportation of such property, out of Illinois on a
standard uniform bill of lading showing the seller of the
property as the shipper or consignor of such property to a
destination outside Illinois, for use outside Illinois.
(6) until July 1, 2003, a sale or transfer of
distillation machinery and equipment, sold as a unit or kit
and assembled or installed by the retailer, which machinery
and equipment is certified by the user to be used only for
the production of ethyl alcohol that will be used for
consumption as motor fuel or as a component of motor fuel
for the personal use of such user and not subject to sale
or resale.
(7) at the election of any serviceman not required to
be otherwise registered as a retailer under Section 2a of
the Retailers' Occupation Tax Act, made for each fiscal
year sales of service in which the aggregate annual cost
price of tangible personal property transferred as an
incident to the sales of service is less than 35%, or 75%
in the case of servicemen transferring prescription drugs
or servicemen engaged in graphic arts production, of the
aggregate annual total gross receipts from all sales of
service. The purchase of such tangible personal property by
the serviceman shall be subject to tax under the Retailers'

SB1783 - 18 - LRB097 10038 HLH 50209 b
Occupation Tax Act and the Use Tax Act. However, if a
primary serviceman who has made the election described in
this paragraph subcontracts service work to a secondary
serviceman who has also made the election described in this
paragraph, the primary serviceman does not incur a Use Tax
liability if the secondary serviceman (i) has paid or will
pay Use Tax on his or her cost price of any tangible
personal property transferred to the primary serviceman
and (ii) certifies that fact in writing to the primary
serviceman.
Tangible personal property transferred incident to the
completion of a maintenance agreement is exempt from the tax
imposed pursuant to this Act.
Exemption (5) also includes machinery and equipment used in
the general maintenance or repair of such exempt machinery and
equipment or for in-house manufacture of exempt machinery and
equipment. For the purposes of exemption (5), each of these
terms shall have the following meanings: (1) "manufacturing
process" shall mean the production of any article of tangible
personal property, whether such article is a finished product
or an article for use in the process of manufacturing or
assembling a different article of tangible personal property,
by procedures commonly regarded as manufacturing, processing,
fabricating, or refining which changes some existing material
or materials into a material with a different form, use or
name. In relation to a recognized integrated business composed

SB1783 - 19 - LRB097 10038 HLH 50209 b
of a series of operations which collectively constitute
manufacturing, or individually constitute manufacturing
operations, the manufacturing process shall be deemed to
commence with the first operation or stage of production in the
series, and shall not be deemed to end until the completion of
the final product in the last operation or stage of production
in the series; and further, for purposes of exemption (5),
photoprocessing is deemed to be a manufacturing process of
tangible personal property for wholesale or retail sale; (2)
"assembling process" shall mean the production of any article
of tangible personal property, whether such article is a
finished product or an article for use in the process of
manufacturing or assembling a different article of tangible
personal property, by the combination of existing materials in
a manner commonly regarded as assembling which results in a
material of a different form, use or name; (3) "machinery"
shall mean major mechanical machines or major components of
such machines contributing to a manufacturing or assembling
process; and (4) "equipment" shall include any independent
device or tool separate from any machinery but essential to an
integrated manufacturing or assembly process; including
computers used primarily in a manufacturer's computer assisted
design, computer assisted manufacturing (CAD/CAM) system; or
any subunit or assembly comprising a component of any machinery
or auxiliary, adjunct or attachment parts of machinery, such as
tools, dies, jigs, fixtures, patterns and molds; or any parts

SB1783 - 20 - LRB097 10038 HLH 50209 b
which require periodic replacement in the course of normal
operation; but shall not include hand tools. Equipment includes
chemicals or chemicals acting as catalysts but only if the
chemicals or chemicals acting as catalysts effect a direct and
immediate change upon a product being manufactured or assembled
for wholesale or retail sale or lease. The purchaser of such
machinery and equipment who has an active resale registration
number shall furnish such number to the seller at the time of
purchase. The user of such machinery and equipment and tools
without an active resale registration number shall prepare a
certificate of exemption for each transaction stating facts
establishing the exemption for that transaction, which
certificate shall be available to the Department for inspection
or audit. The Department shall prescribe the form of the
certificate.
Any informal rulings, opinions or letters issued by the
Department in response to an inquiry or request for any opinion
from any person regarding the coverage and applicability of
exemption (5) to specific devices shall be published,
maintained as a public record, and made available for public
inspection and copying. If the informal ruling, opinion or
letter contains trade secrets or other confidential
information, where possible the Department shall delete such
information prior to publication. Whenever such informal
rulings, opinions, or letters contain any policy of general
applicability, the Department shall formulate and adopt such

SB1783 - 21 - LRB097 10038 HLH 50209 b
policy as a rule in accordance with the provisions of the
Illinois Administrative Procedure Act.
On and after July 1, 1987, no entity otherwise eligible
under exemption (3) of this Section shall make tax free
purchases unless it has an active exemption identification
number issued by the Department.
The purchase, employment and transfer of such tangible
personal property as newsprint and ink for the primary purpose
of conveying news (with or without other information) is not a
purchase, use or sale of service or of tangible personal
property within the meaning of this Act.
"Serviceman" means any person who is engaged in the
occupation of making sales of service.
"Sale at retail" means "sale at retail" as defined in the
Retailers' Occupation Tax Act.
"Supplier" means any person who makes sales of tangible
personal property to servicemen for the purpose of resale as an
incident to a sale of service.
"Serviceman maintaining a place of business in this State",
or any like term, means and includes any serviceman:
1. having or maintaining within this State, directly or
by a subsidiary, an office, distribution house, sales
house, warehouse or other place of business, or any agent
or other representative operating within this State under
the authority of the serviceman or its subsidiary,
irrespective of whether such place of business or agent or

SB1783 - 22 - LRB097 10038 HLH 50209 b
other representative is located here permanently or
temporarily, or whether such serviceman or subsidiary is
licensed to do business in this State;
1.1. Beginning July 1, 2011, having any
representative, agent, salesperson, canvasser, independent
contractor, or solicitor operating in this State under the
authority of the serviceman or its subsidiary for the
purpose of selling, delivering, installing, assembling, or
taking orders for any tangible personal property;
2. soliciting orders for tangible personal property by
means of a telecommunication or television shopping system
(which utilizes toll free numbers) which is intended by the
retailer to be broadcast by cable television or other means
of broadcasting, to consumers located in this State;
3. pursuant to a contract with a broadcaster or
publisher located in this State, soliciting orders for
tangible personal property by means of advertising which is
disseminated primarily to consumers located in this State
and only secondarily to bordering jurisdictions;
4. soliciting orders for tangible personal property by
mail if the solicitations are substantial and recurring and
if the retailer benefits from any banking, financing, debt
collection, telecommunication, or marketing activities
occurring in this State or benefits from the location in
this State of authorized installation, servicing, or
repair facilities;

SB1783 - 23 - LRB097 10038 HLH 50209 b
5. being owned or controlled by the same interests
which own or control any retailer engaging in business in
the same or similar line of business in this State;
6. having a franchisee or licensee operating under its
trade name if the franchisee or licensee is required to
collect the tax under this Section;
7. pursuant to a contract with a cable television
operator located in this State, soliciting orders for
tangible personal property by means of advertising which is
transmitted or distributed over a cable television system
in this State; or
8. engaging in activities in Illinois, which
activities in the state in which the supply business
engaging in such activities is located would constitute
maintaining a place of business in that state.
An advertising link or affiliate marketing link on a
website is not sufficient to qualify the serviceman as a
serviceman maintaining a place of business in this State.
(Source: P.A. 92-484, eff. 8-23-01; 93-23, eff. 6-20-03; 93-24,
eff. 6-20-03; 93-1033, eff. 9-3-04.)
Section 97. Severability. The provisions of this Act are
severable under Section 1.31 of the Statute on Statutes.
Section 99. Effective date. This Act takes effect upon
becoming law.