Public Act 102-0040

SB2279 Enrolled LRB102 16048 HLH 21420 b

AN ACT concerning revenue.

Be it enacted by the People of the State of Illinois,

represented in the General Assembly:

Section 5. The Department of Revenue Law of the Civil

Administrative Code of Illinois is amended by changing Section

2505-380 as follows:

(20 ILCS 2505/2505-380) (was 20 ILCS 2505/39b47)

Sec. 2505-380. Revocation of or refusal to issue or

reissue a certificate of registration, permit, or license.

(a) The Department has the power, after notice and an

opportunity for a hearing, to revoke a certificate of

registration, permit, or license issued by the Department if

the holder of the certificate of registration, permit, or

license fails to file a return, or to pay the tax, fee,

penalty, or interest shown in a filed return, or to pay any

final assessment of tax, fee, penalty, or interest, as

required by the tax or fee Act under which the certificate of

registration, permit, or license is required or any other tax

or fee Act administered by the Department.

(b) The Department may refuse to issue, reissue, or renew

a certificate of registration, permit, or license authorized

to be issued by the Department if a person who is named as the

owner, a partner, a corporate officer, or, in the case of a

limited liability company, a manager or member, of the

applicant on the application for the certificate of

registration, permit or license, is or has been named as the

owner, a partner, a corporate officer, or in the case of a

limited liability company, a manager or member, on the

application for the certificate of registration, permit, or

license of a person that is in default for moneys due under the

tax or fee Act upon which the certificate of registration,

permit, or license is required or any other tax or fee Act

administered by the Department. For purposes of this Section

only, in determining whether a person is in default for moneys

due, the Department shall include only amounts established as

a final liability within the 23 20 years prior to the date of

the Department's notice of refusal to issue or reissue the

certificate of registration, permit, or license. For purposes

of this Section, "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.

(c) When revoking or refusing to issue or reissue a

certificate of registration, permit, or license issued by the

Department, the procedure for notice and hearing used shall be

the procedure provided under the Act pursuant to which the

certificate of registration, permit, or license was issued.

(Source: P.A. 98-496, eff. 1-1-14; 98-1055, eff. 1-1-16.)

Section 10. The Illinois Income Tax Act is amended by

changing Sections 211, 303, 304, 710, 902, and 905 as follows:

(35 ILCS 5/211)

Sec. 211. Economic Development for a Growing Economy Tax

Credit. For tax years beginning on or after January 1, 1999, a

Taxpayer who has entered into an Agreement (including a New

Construction EDGE Agreement) under the Economic Development

for a Growing Economy Tax Credit Act is entitled to a credit

against the taxes imposed under subsections (a) and (b) of

Section 201 of this Act in an amount to be determined in the

Agreement. If the Taxpayer is a partnership or Subchapter S

corporation, the credit shall be allowed to the partners or

shareholders in accordance with the determination of income

and distributive share of income under Sections 702 and 704

and subchapter S of the Internal Revenue Code. The Department,

in cooperation with the Department of Commerce and Economic

Opportunity, shall prescribe rules to enforce and administer

the provisions of this Section. This Section is exempt from

the provisions of Section 250 of this Act.

The credit shall be subject to the conditions set forth in

the Agreement and the following limitations:

(1) The tax credit shall not exceed the Incremental

Income Tax (as defined in Section 5-5 of the Economic

Development for a Growing Economy Tax Credit Act) with

respect to the project; additionally, the New Construction

EDGE Credit shall not exceed the New Construction EDGE

Incremental Income Tax (as defined in Section 5-5 of the

Economic Development for a Growing Economy Tax Credit

Act).

(2) The amount of the credit allowed during the tax

year plus the sum of all amounts allowed in prior years

shall not exceed 100% of the aggregate amount expended by

the Taxpayer during all prior tax years on approved costs

defined by Agreement.

(3) The amount of the credit shall be determined on an

annual basis. Except as applied in a carryover year

pursuant to Section 211(4) of this Act, the credit may not

be applied against any State income tax liability in more

than 10 taxable years; provided, however, that (i) an

eligible business certified by the Department of Commerce

and Economic Opportunity under the Corporate Headquarters

Relocation Act may not apply the credit against any of its

State income tax liability in more than 15 taxable years

and (ii) credits allowed to that eligible business are

subject to the conditions and requirements set forth in

Sections 5-35 and 5-45 of the Economic Development for a

Growing Economy Tax Credit Act and Section 5-51 as

applicable to New Construction EDGE Credits.

(4) The credit may not exceed the amount of taxes

imposed pursuant to subsections (a) and (b) of Section 201

of this Act. Any credit that is unused in the year the

credit is computed may be carried forward and applied to

the tax liability of the 5 taxable years following the

excess credit year. The credit shall be applied to the

earliest year for which there is a tax liability. If there

are credits from more than one tax year that are available

to offset a liability, the earlier credit shall be applied

first.

(5) No credit shall be allowed with respect to any

Agreement for any taxable year ending after the

Noncompliance Date. Upon receiving notification by the

Department of Commerce and Economic Opportunity of the

noncompliance of a Taxpayer with an Agreement, the

Department shall notify the Taxpayer that no credit is

allowed with respect to that Agreement for any taxable

year ending after the Noncompliance Date, as stated in

such notification. If any credit has been allowed with

respect to an Agreement for a taxable year ending after

the Noncompliance Date for that Agreement, any refund paid

to the Taxpayer for that taxable year shall, to the extent

of that credit allowed, be an erroneous refund within the

meaning of Section 912 of this Act.

If, during any taxable year, a taxpayer ceases

operations at a project location that is the subject of

that Agreement with the intent to terminate operations in

the State, the tax imposed under subsections (a) and (b)

of Section 201 of this Act for such taxable year shall be

increased by the amount of any credit allowed under the

Agreement for that project location prior to the date the

taxpayer ceases operations.

(6) For purposes of this Section, the terms

"Agreement", "Incremental Income Tax", "New Construction

EDGE Agreement", "New Construction EDGE Credit", "New

Construction EDGE Incremental Income Tax", and

"Noncompliance Date" have the same meaning as when used in

the Economic Development for a Growing Economy Tax Credit

Act.

(Source: P.A. 101-9, eff. 6-5-19.)

(35 ILCS 5/303) (from Ch. 120, par. 3-303)

Sec. 303. (a) In general. Any item of capital gain or loss,

and any item of income from rents or royalties from real or

tangible personal property, interest, dividends, and patent or

copyright royalties, and prizes awarded under the Illinois

Lottery Law, and, for taxable years ending on or after

December 31, 2019, wagering and gambling winnings from

Illinois sources as set forth in subsection (e-1) of this

Section, and, for taxable years ending on or after December

31, 2021, sports wagering and winnings from Illinois sources

as set forth in subsection (e-2) of this Section, to the extent

such item constitutes nonbusiness income, together with any

item of deduction directly allocable thereto, shall be

allocated by any person other than a resident as provided in

this Section.

(b) Capital gains and losses.

(1) Real property. Capital gains and losses from sales

or exchanges of real property are allocable to this State

if the property is located in this State.

(2) Tangible personal property. Capital gains and

losses from sales or exchanges of tangible personal

property are allocable to this State if, at the time of

such sale or exchange:

(A) The property had its situs in this State; or

(B) The taxpayer had its commercial domicile in

this State and was not taxable in the state in which

the property had its situs.

(3) Intangibles. Capital gains and losses from sales

or exchanges of intangible personal property are allocable

to this State if the taxpayer had its commercial domicile

in this State at the time of such sale or exchange.

(c) Rents and royalties.

(1) Real property. Rents and royalties from real

property are allocable to this State if the property is

located in this State.

(2) Tangible personal property. Rents and royalties

from tangible personal property are allocable to this

State:

(A) If and to the extent that the property is

utilized in this State; or

(B) In their entirety if, at the time such rents or

royalties were paid or accrued, the taxpayer had its

commercial domicile in this State and was not

organized under the laws of or taxable with respect to

such rents or royalties in the state in which the

property was utilized. The extent of utilization of

tangible personal property in a state is determined by

multiplying the rents or royalties derived from such

property by a fraction, the numerator of which is the

number of days of physical location of the property in

the state during the rental or royalty period in the

taxable year and the denominator of which is the

number of days of physical location of the property

everywhere during all rental or royalty periods in the

taxable year. If the physical location of the property

during the rental or royalty period is unknown or

unascertainable by the taxpayer, tangible personal

property is utilized in the state in which the

property was located at the time the rental or royalty

payer obtained possession.

(d) Patent and copyright royalties.

(1) Allocation. Patent and copyright royalties are

allocable to this State:

(A) If and to the extent that the patent or

copyright is utilized by the payer in this State; or

(B) If and to the extent that the patent or

copyright is utilized by the payer in a state in which

the taxpayer is not taxable with respect to such

royalties and, at the time such royalties were paid or

accrued, the taxpayer had its commercial domicile in

this State.

(2) Utilization.

(A) A patent is utilized in a state to the extent

that it is employed in production, fabrication,

manufacturing or other processing in the state or to

the extent that a patented product is produced in the

state. If the basis of receipts from patent royalties

does not permit allocation to states or if the

accounting procedures do not reflect states of

utilization, the patent is utilized in this State if

the taxpayer has its commercial domicile in this

State.

(B) A copyright is utilized in a state to the

extent that printing or other publication originates

in the state. If the basis of receipts from copyright

royalties does not permit allocation to states or if

the accounting procedures do not reflect states of

utilization, the copyright is utilized in this State

if the taxpayer has its commercial domicile in this

State.

(e) Illinois lottery prizes. Prizes awarded under the

Illinois Lottery Law are allocable to this State. Payments

received in taxable years ending on or after December 31,

2013, from the assignment of a prize under Section 13.1 of the

Illinois Lottery Law are allocable to this State.

(e-1) Wagering and gambling winnings. Payments received in

taxable years ending on or after December 31, 2019 of winnings

from pari-mutuel wagering conducted at a wagering facility

licensed under the Illinois Horse Racing Act of 1975 and from

gambling games conducted on a riverboat or in a casino or

organization gaming facility licensed under the Illinois

Gambling Act are allocable to this State.

(e-2) Sports wagering and winnings. Payments received in

taxable years ending on or after December 31, 2021 of winnings

from sports wagering conducted in accordance with the Sports

Wagering Act are allocable to this State.

(e-5) Unemployment benefits. Unemployment benefits paid by

the Illinois Department of Employment Security are allocable

to this State.

(f) Taxability in other state. For purposes of allocation

of income pursuant to this Section, a taxpayer is taxable in

another state if:

(1) In that state he is subject to a net income tax, a

franchise tax measured by net income, a franchise tax for

the privilege of doing business, or a corporate stock tax;

or

(2) That state has jurisdiction to subject the

taxpayer to a net income tax regardless of whether, in

fact, the state does or does not.

(g) Cross references.

(1) For allocation of interest and dividends by

persons other than residents, see Section 301(c)(2).

(2) For allocation of nonbusiness income by residents,

see Section 301(a).

(Source: P.A. 101-31, eff. 6-28-19.)

(35 ILCS 5/304) (from Ch. 120, par. 3-304)

Sec. 304. Business income of persons other than residents.

(a) In general. The business income of a person other than

a resident shall be allocated to this State if such person's

business income is derived solely from this State. If a person

other than a resident derives business income from this State

and one or more other states, then, for tax years ending on or

before December 30, 1998, and except as otherwise provided by

this Section, such person's business income shall be

apportioned to this State by multiplying the income by a

fraction, the numerator of which is the sum of the property

factor (if any), the payroll factor (if any) and 200% of the

sales factor (if any), and the denominator of which is 4

reduced by the number of factors other than the sales factor

which have a denominator of zero and by an additional 2 if the

sales factor has a denominator of zero. For tax years ending on

or after December 31, 1998, and except as otherwise provided

by this Section, persons other than residents who derive

business income from this State and one or more other states

shall compute their apportionment factor by weighting their

property, payroll, and sales factors as provided in subsection

(h) of this Section.

(1) Property factor.

(A) The property factor is a fraction, the numerator

of which is the average value of the person's real and

tangible personal property owned or rented and used in the

trade or business in this State during the taxable year

and the denominator of which is the average value of all

the person's real and tangible personal property owned or

rented and used in the trade or business during the

taxable year.

(B) Property owned by the person is valued at its

original cost. Property rented by the person is valued at

8 times the net annual rental rate. Net annual rental rate

is the annual rental rate paid by the person less any

annual rental rate received by the person from

sub-rentals.

(C) The average value of property shall be determined

by averaging the values at the beginning and ending of the

taxable year but the Director may require the averaging of

monthly values during the taxable year if reasonably

required to reflect properly the average value of the

person's property.

(2) Payroll factor.

(A) The payroll factor is a fraction, the numerator of

which is the total amount paid in this State during the

taxable year by the person for compensation, and the

denominator of which is the total compensation paid

everywhere during the taxable year.

(B) Compensation is paid in this State if:

(i) The individual's service is performed entirely

within this State;

(ii) The individual's service is performed both

within and without this State, but the service

performed without this State is incidental to the

individual's service performed within this State; or

(iii) For tax years ending prior to December 31,

2020, some of the service is performed within this

State and either the base of operations, or if there is

no base of operations, the place from which the

service is directed or controlled is within this

State, or the base of operations or the place from

which the service is directed or controlled is not in

any state in which some part of the service is

performed, but the individual's residence is in this

State. For tax years ending on or after December 31,

2020, compensation is paid in this State if some of the

individual's service is performed within this State,

the individual's service performed within this State

is nonincidental to the individual's service performed

without this State, and the individual's service is

performed within this State for more than 30 working

days during the tax year. The amount of compensation

paid in this State shall include the portion of the

individual's total compensation for services performed

on behalf of his or her employer during the tax year

which the number of working days spent within this

State during the tax year bears to the total number of

working days spent both within and without this State

during the tax year. For purposes of this paragraph:

(a) The term "working day" means all days

during the tax year in which the individual

performs duties on behalf of his or her employer.

All days in which the individual performs no

duties on behalf of his or her employer (e.g.,

weekends, vacation days, sick days, and holidays)

are not working days.

(b) A working day is spent within this State

if:

(1) the individual performs service on

behalf of the employer and a greater amount of

time on that day is spent by the individual

performing duties on behalf of the employer

within this State, without regard to time

spent traveling, than is spent performing

duties on behalf of the employer without this

State; or

(2) the only service the individual

performs on behalf of the employer on that day

is traveling to a destination within this

State, and the individual arrives on that day.

(c) Working days spent within this State do

not include any day in which the employee is

performing services in this State during a

disaster period solely in response to a request

made to his or her employer by the government of

this State, by any political subdivision of this

State, or by a person conducting business in this

State to perform disaster or emergency-related

services in this State. For purposes of this item

(c):

"Declared State disaster or emergency"

means a disaster or emergency event (i) for

which a Governor's proclamation of a state of

emergency has been issued or (ii) for which a

Presidential declaration of a federal major

disaster or emergency has been issued.

"Disaster period" means a period that

begins 10 days prior to the date of the

Governor's proclamation or the President's

declaration (whichever is earlier) and extends

for a period of 60 calendar days after the end

of the declared disaster or emergency period.

"Disaster or emergency-related services"

means repairing, renovating, installing,

building, or rendering services or conducting

other business activities that relate to

infrastructure that has been damaged,

impaired, or destroyed by the declared State

disaster or emergency.

"Infrastructure" means property and

equipment owned or used by a public utility,

communications network, broadband and internet

service provider, cable and video service

provider, electric or gas distribution system,

or water pipeline that provides service to

more than one customer or person, including

related support facilities. "Infrastructure"

includes, but is not limited to, real and

personal property such as buildings, offices,

power lines, cable lines, poles,

communications lines, pipes, structures, and

equipment.

(iv) Compensation paid to nonresident professional

athletes.

(a) General. The Illinois source income of a

nonresident individual who is a member of a

professional athletic team includes the portion of the

individual's total compensation for services performed

as a member of a professional athletic team during the

taxable year which the number of duty days spent

within this State performing services for the team in

any manner during the taxable year bears to the total

number of duty days spent both within and without this

State during the taxable year.

(b) Travel days. Travel days that do not involve

either a game, practice, team meeting, or other

similar team event are not considered duty days spent

in this State. However, such travel days are

considered in the total duty days spent both within

and without this State.

(c) Definitions. For purposes of this subpart

(iv):

(1) The term "professional athletic team"

includes, but is not limited to, any professional

baseball, basketball, football, soccer, or hockey

team.

(2) The term "member of a professional

athletic team" includes those employees who are

active players, players on the disabled list, and

any other persons required to travel and who

travel with and perform services on behalf of a

professional athletic team on a regular basis.

This includes, but is not limited to, coaches,

managers, and trainers.

(3) Except as provided in items (C) and (D) of

this subpart (3), the term "duty days" means all

days during the taxable year from the beginning of

the professional athletic team's official

pre-season training period through the last game

in which the team competes or is scheduled to

compete. Duty days shall be counted for the year

in which they occur, including where a team's

official pre-season training period through the

last game in which the team competes or is

scheduled to compete, occurs during more than one

tax year.

(A) Duty days shall also include days on

which a member of a professional athletic team

performs service for a team on a date that

does not fall within the foregoing period

(e.g., participation in instructional leagues,

the "All Star Game", or promotional

"caravans"). Performing a service for a

professional athletic team includes conducting

training and rehabilitation activities, when

such activities are conducted at team

facilities.

(B) Also included in duty days are game

days, practice days, days spent at team

meetings, promotional caravans, preseason

training camps, and days served with the team

through all post-season games in which the

team competes or is scheduled to compete.

(C) Duty days for any person who joins a

team during the period from the beginning of

the professional athletic team's official

pre-season training period through the last

game in which the team competes, or is

scheduled to compete, shall begin on the day

that person joins the team. Conversely, duty

days for any person who leaves a team during

this period shall end on the day that person

leaves the team. Where a person switches teams

during a taxable year, a separate duty-day

calculation shall be made for the period the

person was with each team.

(D) Days for which a member of a

professional athletic team is not compensated

and is not performing services for the team in

any manner, including days when such member of

a professional athletic team has been

suspended without pay and prohibited from

performing any services for the team, shall

not be treated as duty days.

(E) Days for which a member of a

professional athletic team is on the disabled

list and does not conduct rehabilitation

activities at facilities of the team, and is

not otherwise performing services for the team

in Illinois, shall not be considered duty days

spent in this State. All days on the disabled

list, however, are considered to be included

in total duty days spent both within and

without this State.

(4) The term "total compensation for services

performed as a member of a professional athletic

team" means the total compensation received during

the taxable year for services performed:

(A) from the beginning of the official

pre-season training period through the last

game in which the team competes or is

scheduled to compete during that taxable year;

and

(B) during the taxable year on a date

which does not fall within the foregoing

period (e.g., participation in instructional

leagues, the "All Star Game", or promotional

caravans).

This compensation shall include, but is not

limited to, salaries, wages, bonuses as described

in this subpart, and any other type of

compensation paid during the taxable year to a

member of a professional athletic team for

services performed in that year. This compensation

does not include strike benefits, severance pay,

termination pay, contract or option year buy-out

payments, expansion or relocation payments, or any

other payments not related to services performed

for the team.

For purposes of this subparagraph, "bonuses"

included in "total compensation for services

performed as a member of a professional athletic

team" subject to the allocation described in

Section 302(c)(1) are: bonuses earned as a result

of play (i.e., performance bonuses) during the

season, including bonuses paid for championship,

playoff or "bowl" games played by a team, or for

selection to all-star league or other honorary

positions; and bonuses paid for signing a

contract, unless the payment of the signing bonus

is not conditional upon the signee playing any

games for the team or performing any subsequent

services for the team or even making the team, the

signing bonus is payable separately from the

salary and any other compensation, and the signing

bonus is nonrefundable.

(3) Sales factor.

(A) The sales factor is a fraction, the numerator of

which is the total sales of the person in this State during

the taxable year, and the denominator of which is the

total sales of the person everywhere during the taxable

year.

(B) Sales of tangible personal property are in this

State if:

(i) The property is delivered or shipped to a

purchaser, other than the United States government,

within this State regardless of the f. o. b. point or

other conditions of the sale; or

(ii) The property is shipped from an office,

store, warehouse, factory or other place of storage in

this State and either the purchaser is the United

States government or the person is not taxable in the

state of the purchaser; provided, however, that

premises owned or leased by a person who has

independently contracted with the seller for the

printing of newspapers, periodicals or books shall not

be deemed to be an office, store, warehouse, factory

or other place of storage for purposes of this

Section. Sales of tangible personal property are not

in this State if the seller and purchaser would be

members of the same unitary business group but for the

fact that either the seller or purchaser is a person

with 80% or more of total business activity outside of

the United States and the property is purchased for

resale.

(B-1) Patents, copyrights, trademarks, and similar

items of intangible personal property.

(i) Gross receipts from the licensing, sale, or

other disposition of a patent, copyright, trademark,

or similar item of intangible personal property, other

than gross receipts governed by paragraph (B-7) of

this item (3), are in this State to the extent the item

is utilized in this State during the year the gross

receipts are included in gross income.

(ii) Place of utilization.

(I) A patent is utilized in a state to the

extent that it is employed in production,

fabrication, manufacturing, or other processing in

the state or to the extent that a patented product

is produced in the state. If a patent is utilized

in more than one state, the extent to which it is

utilized in any one state shall be a fraction

equal to the gross receipts of the licensee or

purchaser from sales or leases of items produced,

fabricated, manufactured, or processed within that

state using the patent and of patented items

produced within that state, divided by the total

of such gross receipts for all states in which the

patent is utilized.

(II) A copyright is utilized in a state to the

extent that printing or other publication

originates in the state. If a copyright is

utilized in more than one state, the extent to

which it is utilized in any one state shall be a

fraction equal to the gross receipts from sales or

licenses of materials printed or published in that

state divided by the total of such gross receipts

for all states in which the copyright is utilized.

(III) Trademarks and other items of intangible

personal property governed by this paragraph (B-1)

are utilized in the state in which the commercial

domicile of the licensee or purchaser is located.

(iii) If the state of utilization of an item of

property governed by this paragraph (B-1) cannot be

determined from the taxpayer's books and records or

from the books and records of any person related to the

taxpayer within the meaning of Section 267(b) of the

Internal Revenue Code, 26 U.S.C. 267, the gross

receipts attributable to that item shall be excluded

from both the numerator and the denominator of the

sales factor.

(B-2) Gross receipts from the license, sale, or other

disposition of patents, copyrights, trademarks, and

similar items of intangible personal property, other than

gross receipts governed by paragraph (B-7) of this item

(3), may be included in the numerator or denominator of

the sales factor only if gross receipts from licenses,

sales, or other disposition of such items comprise more

than 50% of the taxpayer's total gross receipts included

in gross income during the tax year and during each of the

2 immediately preceding tax years; provided that, when a

taxpayer is a member of a unitary business group, such

determination shall be made on the basis of the gross

receipts of the entire unitary business group.

(B-5) For taxable years ending on or after December

31, 2008, except as provided in subsections (ii) through

(vii), receipts from the sale of telecommunications

service or mobile telecommunications service are in this

State if the customer's service address is in this State.

(i) For purposes of this subparagraph (B-5), the

following terms have the following meanings:

"Ancillary services" means services that are

associated with or incidental to the provision of

"telecommunications services", including, but not

limited to, "detailed telecommunications billing",

"directory assistance", "vertical service", and "voice

mail services".

"Air-to-Ground Radiotelephone service" means a

radio service, as that term is defined in 47 CFR 22.99,

in which common carriers are authorized to offer and

provide radio telecommunications service for hire to

subscribers in aircraft.

"Call-by-call Basis" means any method of charging

for telecommunications services where the price is

measured by individual calls.

"Communications Channel" means a physical or

virtual path of communications over which signals are

transmitted between or among customer channel

termination points.

"Conference bridging service" means an "ancillary

service" that links two or more participants of an

audio or video conference call and may include the

provision of a telephone number. "Conference bridging

service" does not include the "telecommunications

services" used to reach the conference bridge.

"Customer Channel Termination Point" means the

location where the customer either inputs or receives

the communications.

"Detailed telecommunications billing service"

means an "ancillary service" of separately stating

information pertaining to individual calls on a

customer's billing statement.

"Directory assistance" means an "ancillary

service" of providing telephone number information,

and/or address information.

"Home service provider" means the facilities based

carrier or reseller with which the customer contracts

for the provision of mobile telecommunications

services.

"Mobile telecommunications service" means

commercial mobile radio service, as defined in Section

20.3 of Title 47 of the Code of Federal Regulations as

in effect on June 1, 1999.

"Place of primary use" means the street address

representative of where the customer's use of the

telecommunications service primarily occurs, which

must be the residential street address or the primary

business street address of the customer. In the case

of mobile telecommunications services, "place of

primary use" must be within the licensed service area

of the home service provider.

"Post-paid telecommunication service" means the

telecommunications service obtained by making a

payment on a call-by-call basis either through the use

of a credit card or payment mechanism such as a bank

card, travel card, credit card, or debit card, or by

charge made to a telephone number which is not

associated with the origination or termination of the

telecommunications service. A post-paid calling

service includes telecommunications service, except a

prepaid wireless calling service, that would be a

prepaid calling service except it is not exclusively a

telecommunication service.

"Prepaid telecommunication service" means the

right to access exclusively telecommunications

services, which must be paid for in advance and which

enables the origination of calls using an access

number or authorization code, whether manually or

electronically dialed, and that is sold in

predetermined units or dollars of which the number

declines with use in a known amount.

"Prepaid Mobile telecommunication service" means a

telecommunications service that provides the right to

utilize mobile wireless service as well as other

non-telecommunication services, including, but not

limited to, ancillary services, which must be paid for

in advance that is sold in predetermined units or

dollars of which the number declines with use in a

known amount.

"Private communication service" means a

telecommunication service that entitles the customer

to exclusive or priority use of a communications

channel or group of channels between or among

termination points, regardless of the manner in which

such channel or channels are connected, and includes

switching capacity, extension lines, stations, and any

other associated services that are provided in

connection with the use of such channel or channels.

"Service address" means:

(a) The location of the telecommunications

equipment to which a customer's call is charged

and from which the call originates or terminates,

regardless of where the call is billed or paid;

(b) If the location in line (a) is not known,

service address means the origination point of the

signal of the telecommunications services first

identified by either the seller's

telecommunications system or in information

received by the seller from its service provider

where the system used to transport such signals is

not that of the seller; and

(c) If the locations in line (a) and line (b)

are not known, the service address means the

location of the customer's place of primary use.

"Telecommunications service" means the electronic

transmission, conveyance, or routing of voice, data,

audio, video, or any other information or signals to a

point, or between or among points. The term

"telecommunications service" includes such

transmission, conveyance, or routing in which computer

processing applications are used to act on the form,

code or protocol of the content for purposes of

transmission, conveyance or routing without regard to

whether such service is referred to as voice over

Internet protocol services or is classified by the

Federal Communications Commission as enhanced or value

added. "Telecommunications service" does not include:

(a) Data processing and information services

that allow data to be generated, acquired, stored,

processed, or retrieved and delivered by an

electronic transmission to a purchaser when such

purchaser's primary purpose for the underlying

transaction is the processed data or information;

(b) Installation or maintenance of wiring or

equipment on a customer's premises;

(c) Tangible personal property;

(d) Advertising, including, but not limited

to, directory advertising;

(e) Billing and collection services provided

to third parties;

(f) Internet access service;

(g) Radio and television audio and video

programming services, regardless of the medium,

including the furnishing of transmission,

conveyance and routing of such services by the

programming service provider. Radio and television

audio and video programming services shall

include, but not be limited to, cable service as

defined in 47 USC 522(6) and audio and video

programming services delivered by commercial

mobile radio service providers, as defined in 47

CFR 20.3;

(h) "Ancillary services"; or

(i) Digital products "delivered

electronically", including, but not limited to,

software, music, video, reading materials or ring

tones.

"Vertical service" means an "ancillary service"

that is offered in connection with one or more

"telecommunications services", which offers advanced

calling features that allow customers to identify

callers and to manage multiple calls and call

connections, including "conference bridging services".

"Voice mail service" means an "ancillary service"

that enables the customer to store, send or receive

recorded messages. "Voice mail service" does not

include any "vertical services" that the customer may

be required to have in order to utilize the "voice mail

service".

(ii) Receipts from the sale of telecommunications

service sold on an individual call-by-call basis are

in this State if either of the following applies:

(a) The call both originates and terminates in

this State.

(b) The call either originates or terminates

in this State and the service address is located

in this State.

(iii) Receipts from the sale of postpaid

telecommunications service at retail are in this State

if the origination point of the telecommunication

signal, as first identified by the service provider's

telecommunication system or as identified by

information received by the seller from its service

provider if the system used to transport

telecommunication signals is not the seller's, is

located in this State.

(iv) Receipts from the sale of prepaid

telecommunications service or prepaid mobile

telecommunications service at retail are in this State

if the purchaser obtains the prepaid card or similar

means of conveyance at a location in this State.

Receipts from recharging a prepaid telecommunications

service or mobile telecommunications service is in

this State if the purchaser's billing information

indicates a location in this State.

(v) Receipts from the sale of private

communication services are in this State as follows:

(a) 100% of receipts from charges imposed at

each channel termination point in this State.

(b) 100% of receipts from charges for the

total channel mileage between each channel

termination point in this State.

(c) 50% of the total receipts from charges for

service segments when those segments are between 2

customer channel termination points, 1 of which is

located in this State and the other is located

outside of this State, which segments are

separately charged.

(d) The receipts from charges for service

segments with a channel termination point located

in this State and in two or more other states, and

which segments are not separately billed, are in

this State based on a percentage determined by

dividing the number of customer channel

termination points in this State by the total

number of customer channel termination points.

(vi) Receipts from charges for ancillary services

for telecommunications service sold to customers at

retail are in this State if the customer's primary

place of use of telecommunications services associated

with those ancillary services is in this State. If the

seller of those ancillary services cannot determine

where the associated telecommunications are located,

then the ancillary services shall be based on the

location of the purchaser.

(vii) Receipts to access a carrier's network or

from the sale of telecommunication services or

ancillary services for resale are in this State as

follows:

(a) 100% of the receipts from access fees

attributable to intrastate telecommunications

service that both originates and terminates in

this State.

(b) 50% of the receipts from access fees

attributable to interstate telecommunications

service if the interstate call either originates

or terminates in this State.

(c) 100% of the receipts from interstate end

user access line charges, if the customer's

service address is in this State. As used in this

subdivision, "interstate end user access line

charges" includes, but is not limited to, the

surcharge approved by the federal communications

commission and levied pursuant to 47 CFR 69.

(d) Gross receipts from sales of

telecommunication services or from ancillary

services for telecommunications services sold to

other telecommunication service providers for

resale shall be sourced to this State using the

apportionment concepts used for non-resale

receipts of telecommunications services if the

information is readily available to make that

determination. If the information is not readily

available, then the taxpayer may use any other

reasonable and consistent method.

(B-7) For taxable years ending on or after December

31, 2008, receipts from the sale of broadcasting services

are in this State if the broadcasting services are

received in this State. For purposes of this paragraph

(B-7), the following terms have the following meanings:

"Advertising revenue" means consideration received

by the taxpayer in exchange for broadcasting services

or allowing the broadcasting of commercials or

announcements in connection with the broadcasting of

film or radio programming, from sponsorships of the

programming, or from product placements in the

programming.

"Audience factor" means the ratio that the

audience or subscribers located in this State of a

station, a network, or a cable system bears to the

total audience or total subscribers for that station,

network, or cable system. The audience factor for film

or radio programming shall be determined by reference

to the books and records of the taxpayer or by

reference to published rating statistics provided the

method used by the taxpayer is consistently used from

year to year for this purpose and fairly represents

the taxpayer's activity in this State.

"Broadcast" or "broadcasting" or "broadcasting

services" means the transmission or provision of film

or radio programming, whether through the public

airwaves, by cable, by direct or indirect satellite

transmission, or by any other means of communication,

either through a station, a network, or a cable

system.

"Film" or "film programming" means the broadcast

on television of any and all performances, events, or

productions, including, but not limited to, news,

sporting events, plays, stories, or other literary,

commercial, educational, or artistic works, either

live or through the use of video tape, disc, or any

other type of format or medium. Each episode of a

series of films produced for television shall

constitute separate "film" notwithstanding that the

series relates to the same principal subject and is

produced during one or more tax periods.

"Radio" or "radio programming" means the broadcast

on radio of any and all performances, events, or

productions, including, but not limited to, news,

sporting events, plays, stories, or other literary,

commercial, educational, or artistic works, either

live or through the use of an audio tape, disc, or any

other format or medium. Each episode in a series of

radio programming produced for radio broadcast shall

constitute a separate "radio programming"

notwithstanding that the series relates to the same

principal subject and is produced during one or more

tax periods.

(i) In the case of advertising revenue from

broadcasting, the customer is the advertiser and

the service is received in this State if the

commercial domicile of the advertiser is in this

State.

(ii) In the case where film or radio

programming is broadcast by a station, a network,

or a cable system for a fee or other remuneration

received from the recipient of the broadcast, the

portion of the service that is received in this

State is measured by the portion of the recipients

of the broadcast located in this State.

Accordingly, the fee or other remuneration for

such service that is included in the Illinois

numerator of the sales factor is the total of

those fees or other remuneration received from

recipients in Illinois. For purposes of this

paragraph, a taxpayer may determine the location

of the recipients of its broadcast using the

address of the recipient shown in its contracts

with the recipient or using the billing address of

the recipient in the taxpayer's records.

(iii) In the case where film or radio

programming is broadcast by a station, a network,

or a cable system for a fee or other remuneration

from the person providing the programming, the

portion of the broadcast service that is received

by such station, network, or cable system in this

State is measured by the portion of recipients of

the broadcast located in this State. Accordingly,

the amount of revenue related to such an

arrangement that is included in the Illinois

numerator of the sales factor is the total fee or

other total remuneration from the person providing

the programming related to that broadcast

multiplied by the Illinois audience factor for

that broadcast.

(iv) In the case where film or radio

programming is provided by a taxpayer that is a

network or station to a customer for broadcast in

exchange for a fee or other remuneration from that

customer the broadcasting service is received at

the location of the office of the customer from

which the services were ordered in the regular

course of the customer's trade or business.

Accordingly, in such a case the revenue derived by

the taxpayer that is included in the taxpayer's

Illinois numerator of the sales factor is the

revenue from such customers who receive the

broadcasting service in Illinois.

(v) In the case where film or radio

programming is provided by a taxpayer that is not

a network or station to another person for

broadcasting in exchange for a fee or other

remuneration from that person, the broadcasting

service is received at the location of the office

of the customer from which the services were

ordered in the regular course of the customer's

trade or business. Accordingly, in such a case the

revenue derived by the taxpayer that is included

in the taxpayer's Illinois numerator of the sales

factor is the revenue from such customers who

receive the broadcasting service in Illinois.

(B-8) Gross receipts from winnings under the Illinois

Lottery Law from the assignment of a prize under Section

13.1 of the Illinois Lottery Law are received in this

State. This paragraph (B-8) applies only to taxable years

ending on or after December 31, 2013.

(B-9) For taxable years ending on or after December

31, 2019, gross receipts from winnings from pari-mutuel

wagering conducted at a wagering facility licensed under

the Illinois Horse Racing Act of 1975 or from winnings

from gambling games conducted on a riverboat or in a

casino or organization gaming facility licensed under the

Illinois Gambling Act are in this State.

(B-10) For taxable years ending on or after December

31, 2021, gross receipts from winnings from sports

wagering conducted in accordance with the Sports Wagering

Act are in this State.

(C) For taxable years ending before December 31, 2008,

sales, other than sales governed by paragraphs (B), (B-1),

(B-2), and (B-8) are in this State if:

(i) The income-producing activity is performed in

this State; or

(ii) The income-producing activity is performed

both within and without this State and a greater

proportion of the income-producing activity is

performed within this State than without this State,

based on performance costs.

(C-5) For taxable years ending on or after December

31, 2008, sales, other than sales governed by paragraphs

(B), (B-1), (B-2), (B-5), and (B-7), are in this State if

any of the following criteria are met:

(i) Sales from the sale or lease of real property

are in this State if the property is located in this

State.

(ii) Sales from the lease or rental of tangible

personal property are in this State if the property is

located in this State during the rental period. Sales

from the lease or rental of tangible personal property

that is characteristically moving property, including,

but not limited to, motor vehicles, rolling stock,

aircraft, vessels, or mobile equipment are in this

State to the extent that the property is used in this

State.

(iii) In the case of interest, net gains (but not

less than zero) and other items of income from

intangible personal property, the sale is in this

State if:

(a) in the case of a taxpayer who is a dealer

in the item of intangible personal property within

the meaning of Section 475 of the Internal Revenue

Code, the income or gain is received from a

customer in this State. For purposes of this

subparagraph, a customer is in this State if the

customer is an individual, trust or estate who is

a resident of this State and, for all other

customers, if the customer's commercial domicile

is in this State. Unless the dealer has actual

knowledge of the residence or commercial domicile

of a customer during a taxable year, the customer

shall be deemed to be a customer in this State if

the billing address of the customer, as shown in

the records of the dealer, is in this State; or

(b) in all other cases, if the

income-producing activity of the taxpayer is

performed in this State or, if the

income-producing activity of the taxpayer is

performed both within and without this State, if a

greater proportion of the income-producing

activity of the taxpayer is performed within this

State than in any other state, based on

performance costs.

(iv) Sales of services are in this State if the

services are received in this State. For the purposes

of this section, gross receipts from the performance

of services provided to a corporation, partnership, or

trust may only be attributed to a state where that

corporation, partnership, or trust has a fixed place

of business. If the state where the services are

received is not readily determinable or is a state

where the corporation, partnership, or trust receiving

the service does not have a fixed place of business,

the services shall be deemed to be received at the

location of the office of the customer from which the

services were ordered in the regular course of the

customer's trade or business. If the ordering office

cannot be determined, the services shall be deemed to

be received at the office of the customer to which the

services are billed. If the taxpayer is not taxable in

the state in which the services are received, the sale

must be excluded from both the numerator and the

denominator of the sales factor. The Department shall

adopt rules prescribing where specific types of

service are received, including, but not limited to,

publishing, and utility service.

(D) For taxable years ending on or after December 31,

1995, the following items of income shall not be included

in the numerator or denominator of the sales factor:

dividends; amounts included under Section 78 of the

Internal Revenue Code; and Subpart F income as defined in

Section 952 of the Internal Revenue Code. No inference

shall be drawn from the enactment of this paragraph (D) in

construing this Section for taxable years ending before

December 31, 1995.

(E) Paragraphs (B-1) and (B-2) shall apply to tax

years ending on or after December 31, 1999, provided that

a taxpayer may elect to apply the provisions of these

paragraphs to prior tax years. Such election shall be made

in the form and manner prescribed by the Department, shall

be irrevocable, and shall apply to all tax years; provided

that, if a taxpayer's Illinois income tax liability for

any tax year, as assessed under Section 903 prior to

January 1, 1999, was computed in a manner contrary to the

provisions of paragraphs (B-1) or (B-2), no refund shall

be payable to the taxpayer for that tax year to the extent

such refund is the result of applying the provisions of

paragraph (B-1) or (B-2) retroactively. In the case of a

unitary business group, such election shall apply to all

members of such group for every tax year such group is in

existence, but shall not apply to any taxpayer for any

period during which that taxpayer is not a member of such

group.

(b) Insurance companies.

(1) In general. Except as otherwise provided by

paragraph (2), business income of an insurance company for

a taxable year shall be apportioned to this State by

multiplying such income by a fraction, the numerator of

which is the direct premiums written for insurance upon

property or risk in this State, and the denominator of

which is the direct premiums written for insurance upon

property or risk everywhere. For purposes of this

subsection, the term "direct premiums written" means the

total amount of direct premiums written, assessments and

annuity considerations as reported for the taxable year on

the annual statement filed by the company with the

Illinois Director of Insurance in the form approved by the

National Convention of Insurance Commissioners or such

other form as may be prescribed in lieu thereof.

(2) Reinsurance. If the principal source of premiums

written by an insurance company consists of premiums for

reinsurance accepted by it, the business income of such

company shall be apportioned to this State by multiplying

such income by a fraction, the numerator of which is the

sum of (i) direct premiums written for insurance upon

property or risk in this State, plus (ii) premiums written

for reinsurance accepted in respect of property or risk in

this State, and the denominator of which is the sum of

(iii) direct premiums written for insurance upon property

or risk everywhere, plus (iv) premiums written for

reinsurance accepted in respect of property or risk

everywhere. For purposes of this paragraph, premiums

written for reinsurance accepted in respect of property or

risk in this State, whether or not otherwise determinable,

may, at the election of the company, be determined on the

basis of the proportion which premiums written for

reinsurance accepted from companies commercially domiciled

in Illinois bears to premiums written for reinsurance

accepted from all sources, or, alternatively, in the

proportion which the sum of the direct premiums written

for insurance upon property or risk in this State by each

ceding company from which reinsurance is accepted bears to

the sum of the total direct premiums written by each such

ceding company for the taxable year. The election made by

a company under this paragraph for its first taxable year

ending on or after December 31, 2011, shall be binding for

that company for that taxable year and for all subsequent

taxable years, and may be altered only with the written

permission of the Department, which shall not be

unreasonably withheld.

(c) Financial organizations.

(1) In general. For taxable years ending before

December 31, 2008, business income of a financial

organization shall be apportioned to this State by

multiplying such income by a fraction, the numerator of

which is its business income from sources within this

State, and the denominator of which is its business income

from all sources. For the purposes of this subsection, the

business income of a financial organization from sources

within this State is the sum of the amounts referred to in

subparagraphs (A) through (E) following, but excluding the

adjusted income of an international banking facility as

determined in paragraph (2):

(A) Fees, commissions or other compensation for

financial services rendered within this State;

(B) Gross profits from trading in stocks, bonds or

other securities managed within this State;

(C) Dividends, and interest from Illinois

customers, which are received within this State;

(D) Interest charged to customers at places of

business maintained within this State for carrying

debit balances of margin accounts, without deduction

of any costs incurred in carrying such accounts; and

(E) Any other gross income resulting from the

operation as a financial organization within this

State.

In computing the amounts referred to in paragraphs (A)

through (E) of this subsection, any amount received by a

member of an affiliated group (determined under Section

1504(a) of the Internal Revenue Code but without reference

to whether any such corporation is an "includible

corporation" under Section 1504(b) of the Internal Revenue

Code) from another member of such group shall be included

only to the extent such amount exceeds expenses of the

recipient directly related thereto.

(2) International Banking Facility. For taxable years

ending before December 31, 2008:

(A) Adjusted Income. The adjusted income of an

international banking facility is its income reduced

by the amount of the floor amount.

(B) Floor Amount. The floor amount shall be the

amount, if any, determined by multiplying the income

of the international banking facility by a fraction,

not greater than one, which is determined as follows:

(i) The numerator shall be:

The average aggregate, determined on a

quarterly basis, of the financial organization's

loans to banks in foreign countries, to foreign

domiciled borrowers (except where secured

primarily by real estate) and to foreign

governments and other foreign official

institutions, as reported for its branches,

agencies and offices within the state on its

"Consolidated Report of Condition", Schedule A,

Lines 2.c., 5.b., and 7.a., which was filed with

the Federal Deposit Insurance Corporation and

other regulatory authorities, for the year 1980,

minus

The average aggregate, determined on a

quarterly basis, of such loans (other than loans

of an international banking facility), as reported

by the financial institution for its branches,

agencies and offices within the state, on the

corresponding Schedule and lines of the

Consolidated Report of Condition for the current

taxable year, provided, however, that in no case

shall the amount determined in this clause (the

subtrahend) exceed the amount determined in the

preceding clause (the minuend); and

(ii) the denominator shall be the average

aggregate, determined on a quarterly basis, of the

international banking facility's loans to banks in

foreign countries, to foreign domiciled borrowers

(except where secured primarily by real estate)

and to foreign governments and other foreign

official institutions, which were recorded in its

financial accounts for the current taxable year.

(C) Change to Consolidated Report of Condition and

in Qualification. In the event the Consolidated Report

of Condition which is filed with the Federal Deposit

Insurance Corporation and other regulatory authorities

is altered so that the information required for

determining the floor amount is not found on Schedule

A, lines 2.c., 5.b. and 7.a., the financial

institution shall notify the Department and the

Department may, by regulations or otherwise, prescribe

or authorize the use of an alternative source for such

information. The financial institution shall also

notify the Department should its international banking

facility fail to qualify as such, in whole or in part,

or should there be any amendment or change to the

Consolidated Report of Condition, as originally filed,

to the extent such amendment or change alters the

information used in determining the floor amount.

(3) For taxable years ending on or after December 31,

2008, the business income of a financial organization

shall be apportioned to this State by multiplying such

income by a fraction, the numerator of which is its gross

receipts from sources in this State or otherwise

attributable to this State's marketplace and the

denominator of which is its gross receipts everywhere

during the taxable year. "Gross receipts" for purposes of

this subparagraph (3) means gross income, including net

taxable gain on disposition of assets, including

securities and money market instruments, when derived from

transactions and activities in the regular course of the

financial organization's trade or business. The following

examples are illustrative:

(i) Receipts from the lease or rental of real or

tangible personal property are in this State if the

property is located in this State during the rental

period. Receipts from the lease or rental of tangible

personal property that is characteristically moving

property, including, but not limited to, motor

vehicles, rolling stock, aircraft, vessels, or mobile

equipment are from sources in this State to the extent

that the property is used in this State.

(ii) Interest income, commissions, fees, gains on

disposition, and other receipts from assets in the

nature of loans that are secured primarily by real

estate or tangible personal property are from sources

in this State if the security is located in this State.

(iii) Interest income, commissions, fees, gains on

disposition, and other receipts from consumer loans

that are not secured by real or tangible personal

property are from sources in this State if the debtor

is a resident of this State.

(iv) Interest income, commissions, fees, gains on

disposition, and other receipts from commercial loans

and installment obligations that are not secured by

real or tangible personal property are from sources in

this State if the proceeds of the loan are to be

applied in this State. If it cannot be determined

where the funds are to be applied, the income and

receipts are from sources in this State if the office

of the borrower from which the loan was negotiated in

the regular course of business is located in this

State. If the location of this office cannot be

determined, the income and receipts shall be excluded

from the numerator and denominator of the sales

factor.

(v) Interest income, fees, gains on disposition,

service charges, merchant discount income, and other

receipts from credit card receivables are from sources

in this State if the card charges are regularly billed

to a customer in this State.

(vi) Receipts from the performance of services,

including, but not limited to, fiduciary, advisory,

and brokerage services, are in this State if the

services are received in this State within the meaning

of subparagraph (a)(3)(C-5)(iv) of this Section.

(vii) Receipts from the issuance of travelers

checks and money orders are from sources in this State

if the checks and money orders are issued from a

location within this State.

(viii) Receipts from investment assets and

activities and trading assets and activities are

included in the receipts factor as follows:

(1) Interest, dividends, net gains (but not

less than zero) and other income from investment

assets and activities from trading assets and

activities shall be included in the receipts

factor. Investment assets and activities and

trading assets and activities include, but are not

limited to: investment securities; trading account

assets; federal funds; securities purchased and

sold under agreements to resell or repurchase;

options; futures contracts; forward contracts;

notional principal contracts such as swaps;

equities; and foreign currency transactions. With

respect to the investment and trading assets and

activities described in subparagraphs (A) and (B)

of this paragraph, the receipts factor shall

include the amounts described in such

subparagraphs.

(A) The receipts factor shall include the

amount by which interest from federal funds

sold and securities purchased under resale

agreements exceeds interest expense on federal

funds purchased and securities sold under

repurchase agreements.

(B) The receipts factor shall include the

amount by which interest, dividends, gains and

other income from trading assets and

activities, including, but not limited to,

assets and activities in the matched book, in

the arbitrage book, and foreign currency

transactions, exceed amounts paid in lieu of

interest, amounts paid in lieu of dividends,

and losses from such assets and activities.

(2) The numerator of the receipts factor

includes interest, dividends, net gains (but not

less than zero), and other income from investment

assets and activities and from trading assets and

activities described in paragraph (1) of this

subsection that are attributable to this State.

(A) The amount of interest, dividends, net

gains (but not less than zero), and other

income from investment assets and activities

in the investment account to be attributed to

this State and included in the numerator is

determined by multiplying all such income from

such assets and activities by a fraction, the

numerator of which is the gross income from

such assets and activities which are properly

assigned to a fixed place of business of the

taxpayer within this State and the denominator

of which is the gross income from all such

assets and activities.

(B) The amount of interest from federal

funds sold and purchased and from securities

purchased under resale agreements and

securities sold under repurchase agreements

attributable to this State and included in the

numerator is determined by multiplying the

amount described in subparagraph (A) of

paragraph (1) of this subsection from such

funds and such securities by a fraction, the

numerator of which is the gross income from

such funds and such securities which are

properly assigned to a fixed place of business

of the taxpayer within this State and the

denominator of which is the gross income from

all such funds and such securities.

(C) The amount of interest, dividends,

gains, and other income from trading assets

and activities, including, but not limited to,

assets and activities in the matched book, in

the arbitrage book and foreign currency

transactions (but excluding amounts described

in subparagraphs (A) or (B) of this

paragraph), attributable to this State and

included in the numerator is determined by

multiplying the amount described in

subparagraph (B) of paragraph (1) of this

subsection by a fraction, the numerator of

which is the gross income from such trading

assets and activities which are properly

assigned to a fixed place of business of the

taxpayer within this State and the denominator

of which is the gross income from all such

assets and activities.

(D) Properly assigned, for purposes of

this paragraph (2) of this subsection, means

the investment or trading asset or activity is

assigned to the fixed place of business with

which it has a preponderance of substantive

contacts. An investment or trading asset or

activity assigned by the taxpayer to a fixed

place of business without the State shall be

presumed to have been properly assigned if:

(i) the taxpayer has assigned, in the

regular course of its business, such asset

or activity on its records to a fixed

place of business consistent with federal

or state regulatory requirements;

(ii) such assignment on its records is

based upon substantive contacts of the

asset or activity to such fixed place of

business; and

(iii) the taxpayer uses such records

reflecting assignment of such assets or

activities for the filing of all state and

local tax returns for which an assignment

of such assets or activities to a fixed

place of business is required.

(E) The presumption of proper assignment

of an investment or trading asset or activity

provided in subparagraph (D) of paragraph (2)

of this subsection may be rebutted upon a

showing by the Department, supported by a

preponderance of the evidence, that the

preponderance of substantive contacts

regarding such asset or activity did not occur

at the fixed place of business to which it was

assigned on the taxpayer's records. If the

fixed place of business that has a

preponderance of substantive contacts cannot

be determined for an investment or trading

asset or activity to which the presumption in

subparagraph (D) of paragraph (2) of this

subsection does not apply or with respect to

which that presumption has been rebutted, that

asset or activity is properly assigned to the

state in which the taxpayer's commercial

domicile is located. For purposes of this

subparagraph (E), it shall be presumed,

subject to rebuttal, that taxpayer's

commercial domicile is in the state of the

United States or the District of Columbia to

which the greatest number of employees are

regularly connected with the management of the

investment or trading income or out of which

they are working, irrespective of where the

services of such employees are performed, as

of the last day of the taxable year.

(4) (Blank).

(5) (Blank).

(c-1) Federally regulated exchanges. For taxable years

ending on or after December 31, 2012, business income of a

federally regulated exchange shall, at the option of the

federally regulated exchange, be apportioned to this State by

multiplying such income by a fraction, the numerator of which

is its business income from sources within this State, and the

denominator of which is its business income from all sources.

For purposes of this subsection, the business income within

this State of a federally regulated exchange is the sum of the

following:

(1) Receipts attributable to transactions executed on

a physical trading floor if that physical trading floor is

located in this State.

(2) Receipts attributable to all other matching,

execution, or clearing transactions, including without

limitation receipts from the provision of matching,

execution, or clearing services to another entity,

multiplied by (i) for taxable years ending on or after

December 31, 2012 but before December 31, 2013, 63.77%;

and (ii) for taxable years ending on or after December 31,

2013, 27.54%.

(3) All other receipts not governed by subparagraphs

(1) or (2) of this subsection (c-1), to the extent the

receipts would be characterized as "sales in this State"

under item (3) of subsection (a) of this Section.

"Federally regulated exchange" means (i) a "registered

entity" within the meaning of 7 U.S.C. Section 1a(40)(A), (B),

or (C), (ii) an "exchange" or "clearing agency" within the

meaning of 15 U.S.C. Section 78c (a)(1) or (23), (iii) any such

entities regulated under any successor regulatory structure to

the foregoing, and (iv) all taxpayers who are members of the

same unitary business group as a federally regulated exchange,

determined without regard to the prohibition in Section

1501(a)(27) of this Act against including in a unitary

business group taxpayers who are ordinarily required to

apportion business income under different subsections of this

Section; provided that this subparagraph (iv) shall apply only

if 50% or more of the business receipts of the unitary business

group determined by application of this subparagraph (iv) for

the taxable year are attributable to the matching, execution,

or clearing of transactions conducted by an entity described

in subparagraph (i), (ii), or (iii) of this paragraph.

In no event shall the Illinois apportionment percentage

computed in accordance with this subsection (c-1) for any

taxpayer for any tax year be less than the Illinois

apportionment percentage computed under this subsection (c-1)

for that taxpayer for the first full tax year ending on or

after December 31, 2013 for which this subsection (c-1)

applied to the taxpayer.

(d) Transportation services. For taxable years ending

before December 31, 2008, business income derived from

furnishing transportation services shall be apportioned to

this State in accordance with paragraphs (1) and (2):

(1) Such business income (other than that derived from

transportation by pipeline) shall be apportioned to this

State by multiplying such income by a fraction, the

numerator of which is the revenue miles of the person in

this State, and the denominator of which is the revenue

miles of the person everywhere. For purposes of this

paragraph, a revenue mile is the transportation of 1

passenger or 1 net ton of freight the distance of 1 mile

for a consideration. Where a person is engaged in the

transportation of both passengers and freight, the

fraction above referred to shall be determined by means of

an average of the passenger revenue mile fraction and the

freight revenue mile fraction, weighted to reflect the

person's

(A) relative railway operating income from total

passenger and total freight service, as reported to

the Interstate Commerce Commission, in the case of

transportation by railroad, and

(B) relative gross receipts from passenger and

freight transportation, in case of transportation

other than by railroad.

(2) Such business income derived from transportation

by pipeline shall be apportioned to this State by

multiplying such income by a fraction, the numerator of

which is the revenue miles of the person in this State, and

the denominator of which is the revenue miles of the

person everywhere. For the purposes of this paragraph, a

revenue mile is the transportation by pipeline of 1 barrel

of oil, 1,000 cubic feet of gas, or of any specified

quantity of any other substance, the distance of 1 mile

for a consideration.

(3) For taxable years ending on or after December 31,

2008, business income derived from providing

transportation services other than airline services shall

be apportioned to this State by using a fraction, (a) the

numerator of which shall be (i) all receipts from any

movement or shipment of people, goods, mail, oil, gas, or

any other substance (other than by airline) that both

originates and terminates in this State, plus (ii) that

portion of the person's gross receipts from movements or

shipments of people, goods, mail, oil, gas, or any other

substance (other than by airline) that originates in one

state or jurisdiction and terminates in another state or

jurisdiction, that is determined by the ratio that the

miles traveled in this State bears to total miles

everywhere and (b) the denominator of which shall be all

revenue derived from the movement or shipment of people,

goods, mail, oil, gas, or any other substance (other than

by airline). Where a taxpayer is engaged in the

transportation of both passengers and freight, the

fraction above referred to shall first be determined

separately for passenger miles and freight miles. Then an

average of the passenger miles fraction and the freight

miles fraction shall be weighted to reflect the

taxpayer's:

(A) relative railway operating income from total

passenger and total freight service, as reported to

the Surface Transportation Board, in the case of

transportation by railroad; and

(B) relative gross receipts from passenger and

freight transportation, in case of transportation

other than by railroad.

(4) For taxable years ending on or after December 31,

2008, business income derived from furnishing airline

transportation services shall be apportioned to this State

by multiplying such income by a fraction, the numerator of

which is the revenue miles of the person in this State, and

the denominator of which is the revenue miles of the

person everywhere. For purposes of this paragraph, a

revenue mile is the transportation of one passenger or one

net ton of freight the distance of one mile for a

consideration. If a person is engaged in the

transportation of both passengers and freight, the

fraction above referred to shall be determined by means of

an average of the passenger revenue mile fraction and the

freight revenue mile fraction, weighted to reflect the

person's relative gross receipts from passenger and

freight airline transportation.

(e) Combined apportionment. Where 2 or more persons are

engaged in a unitary business as described in subsection

(a)(27) of Section 1501, a part of which is conducted in this

State by one or more members of the group, the business income

attributable to this State by any such member or members shall

be apportioned by means of the combined apportionment method.

(f) Alternative allocation. If the allocation and

apportionment provisions of subsections (a) through (e) and of

subsection (h) do not, for taxable years ending before

December 31, 2008, fairly represent the extent of a person's

business activity in this State, or, for taxable years ending

on or after December 31, 2008, fairly represent the market for

the person's goods, services, or other sources of business

income, the person may petition for, or the Director may,

without a petition, permit or require, in respect of all or any

part of the person's business activity, if reasonable:

(1) Separate accounting;

(2) The exclusion of any one or more factors;

(3) The inclusion of one or more additional factors

which will fairly represent the person's business

activities or market in this State; or

(4) The employment of any other method to effectuate

an equitable allocation and apportionment of the person's

business income.

(g) Cross reference. For allocation of business income by

residents, see Section 301(a).

(h) For tax years ending on or after December 31, 1998, the

apportionment factor of persons who apportion their business

income to this State under subsection (a) shall be equal to:

(1) for tax years ending on or after December 31, 1998

and before December 31, 1999, 16 2/3% of the property

factor plus 16 2/3% of the payroll factor plus 66 2/3% of

the sales factor;

(2) for tax years ending on or after December 31, 1999

and before December 31, 2000, 8 1/3% of the property

factor plus 8 1/3% of the payroll factor plus 83 1/3% of

the sales factor;

(3) for tax years ending on or after December 31,

2000, the sales factor.

If, in any tax year ending on or after December 31, 1998 and

before December 31, 2000, the denominator of the payroll,

property, or sales factor is zero, the apportionment factor

computed in paragraph (1) or (2) of this subsection for that

year shall be divided by an amount equal to 100% minus the

percentage weight given to each factor whose denominator is

equal to zero.

(Source: P.A. 100-201, eff. 8-18-17; 101-31, eff. 6-28-19;

101-585, eff. 8-26-19; revised 9-12-19.)

(35 ILCS 5/710) (from Ch. 120, par. 7-710)

Sec. 710. Withholding from lottery, wagering, and gambling

winnings.

(a) In general.

(1) Any person making a payment to a resident or

nonresident of winnings under the Illinois Lottery Law and

not required to withhold Illinois income tax from such

payment under Subsection (b) of Section 701 of this Act

because those winnings are not subject to Federal income

tax withholding, must withhold Illinois income tax from

such payment at a rate equal to the percentage tax rate for

individuals provided in subsection (b) of Section 201,

provided that withholding is not required if such payment

of winnings is less than $1,000.

(2) In the case of an assignment of a lottery prize

under Section 13.1 of the Illinois Lottery Law, any person

making a payment of the purchase price after December 31,

2013, shall withhold from the amount of each payment at a

rate equal to the percentage tax rate for individuals

provided in subsection (b) of Section 201.

(3) Any person making a payment after December 31,

2019 to a resident or nonresident of winnings from

pari-mutuel wagering conducted at a wagering facility

licensed under the Illinois Horse Racing Act of 1975 or

from gambling games conducted on a riverboat or in a

casino or organization gaming facility licensed under the

Illinois Gambling Act must withhold Illinois income tax

from such payment at a rate equal to the percentage tax

rate for individuals provided in subsection (b) of Section

201, provided that the person making the payment is

required to withhold under Section 3402(q) of the Internal

Revenue Code.

(4) Any person making a payment after December 31,

2021 to a resident or nonresident of winnings from sports

wagering conducted in accordance with the Sports Wagering

Act must withhold Illinois income tax from such payment at

a rate equal to the percentage tax rate for individuals

provided in subsection (b) of Section 201, provided that

the person making the payment is required to withhold

under Section 3402(q) of the Internal Revenue Code.

(b) Credit for taxes withheld. Any amount withheld under

Subsection (a) shall be a credit against the Illinois income

tax liability of the person to whom the payment of winnings was

made for the taxable year in which that person incurred an

Illinois income tax liability with respect to those winnings.

(Source: P.A. 101-31, eff. 6-28-19.)

(35 ILCS 5/902) (from Ch. 120, par. 9-902)

Sec. 902. Notice and Demand.

(a) In general. Except as provided in subsection (b) the

Director shall, as soon as practicable after an amount payable

under this Act is deemed assessed (as provided in Section

903), give notice to each person liable for any unpaid portion

of such assessment, stating the amount unpaid and demanding

payment thereof. In the case of tax deemed assessed with the

filing of a return, the Director shall give notice no later

than 3 years after the date the return was filed. Upon receipt

of any notice and demand there shall be paid at the place and

time stated in such notice the amount stated in such notice.

Such notice shall be left at the dwelling or usual place of

business of such person or shall be sent by mail to the

person's last known address.

(b) Judicial review. In the case of a deficiency deemed

assessed under Section 903(a)(2) after the filing of a

protest, notice and demand shall not be made with respect to

such assessment until all proceedings in court for the review

of such assessment have terminated or the time for the taking

thereof has expired without such proceedings being instituted.

(c) Action for recovery of taxes. At any time that the

Department might commence proceedings for a levy under Section

1109, regardless of whether a notice of lien was filed under

the provisions of Section 1103, it may bring an action in any

court of competent jurisdiction within or without this State

in the name of the people of this State to recover the amount

of any taxes, penalties and interest due and unpaid under this

Act. In such action, the certificate of the Department showing

the amount of the delinquency shall be prima facie evidence of

the correctness of such amount, its assessment and of the

compliance by the Department with all the provisions of this

Act.

(d) Sales or transfers outside the usual course of

business-Report-Payment of Tax - Rights and duties of

purchaser or transferee - penalty. If any taxpayer, outside

the usual course of his business, sells or transfers the major

part of any one or more of (A) the stock of goods which he is

engaged in the business of selling, or (B) the furniture or

fixtures, or (C) the machinery and equipment, or (D) the real

property, of any business that is subject to the provisions of

this Act, the purchaser or transferee of such assets shall, no

later than 10 business days before after the sale or transfer,

file a notice of sale or transfer of business assets with the

Chicago office of the Department disclosing the name and

address of the seller or transferor, the name and address of

the purchaser or transferee, the date of the sale or transfer,

a copy of the sales contract and financing agreements which

shall include a description of the property sold or

transferred, the amount of the purchase price or a statement

of other consideration for the sale or transfer, and the terms

for payment of the purchase price, and such other information

as the Department may reasonably require. If the purchaser or

transferee fails to file the above described notice of sale

with the Department within the prescribed time, the purchaser

or transferee shall be personally liable to the Department for

the amount owed hereunder by the seller or transferor but

unpaid, up to the amount of the reasonable value of the

property acquired by the purchaser or transferee. The

purchaser or transferee shall pay the Department the amount of

tax, penalties, and interest owed by the seller or transferor

under this Act, to the extent they have not been paid by the

seller or transferor. The seller or transferor, or the

purchaser or transferee, at least 10 business days before the

date of the sale or transfer, may notify the Department of the

intended sale or transfer and request the Department to make a

determination as to whether the seller or transferor owes any

tax, penalty or interest due under this Act. The Department

shall take such steps as may be appropriate to comply with such

request.

Any order issued by the Department pursuant to this

Section to withhold from the purchase price shall be issued

within 10 business days after the Department receives

notification of a sale as provided in this Section. The

purchaser or transferee shall withhold such portion of the

purchase price as may be directed by the Department, but not to

exceed a minimum amount varying by type of business, as

determined by the Department pursuant to regulations, plus

twice the outstanding unpaid liabilities and twice the average

liability of preceding filings times the number of unfiled

returns which were not filed when due, to cover the amount of

all tax, penalty, and interest due and unpaid by the seller or

transferor under this Act or, if the payment of money or

property is not involved, shall withhold the performance of

the condition that constitutes the consideration for the sale

or transfer. Within 60 business days after issuance of the

initial order to withhold, the Department shall provide

written notice to the purchaser or transferee of the actual

amount of all taxes, penalties and interest then due and

whether or not additional amounts may become due as a result of

unpaid taxes required to be withheld by an employer, returns

which were not filed when due, pending assessments and audits

not completed. The purchaser or transferee shall continue to

withhold the amount directed to be withheld by the initial

order or such lesser amount as is specified by the final

withholding order or to withhold the performance of the

condition which constitutes the consideration for the sale or

transfer until the purchaser or transferee receives from the

Department a certificate showing that no unpaid tax, penalty

or interest is due from the seller or transferor under this

Act.

The purchaser or transferee is relieved of any duty to

continue to withhold from the purchase price and of any

liability for tax, penalty, or interest due hereunder from the

seller or transferor if the Department fails to notify the

purchaser or transferee in the manner provided herein of the

amount to be withheld within 10 business days after the sale or

transfer has been reported to the Department or within 60

business days after issuance of the initial order to withhold,

as the case may be. The Department shall have the right to

determine amounts claimed on an estimated basis to allow for

periods for which returns were not filed when due, pending

assessments and audits not completed, however the purchaser or

transferee shall be personally liable only for the actual

amount due when determined.

If the seller or transferor has failed to pay the tax,

penalty, and interest due from him hereunder and the

Department makes timely claim therefor against the purchaser

or transferee as hereinabove provided, then the purchaser or

transferee shall pay to the Department the amount so withheld

from the purchase price. If the purchaser or transferee fails

to comply with the requirements of this Section, the purchaser

or transferee shall be personally liable to the Department for

the amount owed hereunder by the seller or transferor up to the

amount of the reasonable value of the property acquired by the

purchaser or transferee.

Any person who shall acquire any property or rights

thereto which, at the time of such acquisition, is subject to a

valid lien in favor of the Department, shall be personally

liable to the Department for a sum equal to the amount of

taxes, penalties and interests, secured by such lien, but not

to exceed the reasonable value of such property acquired by

him.

(Source: P.A. 94-776, eff. 5-19-06.)

(35 ILCS 5/905) (from Ch. 120, par. 9-905)

Sec. 905. Limitations on Notices of Deficiency.

(a) In general. Except as otherwise provided in this Act:

(1) A notice of deficiency shall be issued not later

than 3 years after the date the return was filed, and

(2) No deficiency shall be assessed or collected with

respect to the year for which the return was filed unless

such notice is issued within such period.

(a-5) Notwithstanding any other provision of this Act to

the contrary, for any taxable year included in a claim for

credit or refund for which the statute of limitations for

issuing a notice of deficiency under this Act will expire less

than 6 months after the date a taxpayer files the claim for

credit or refund, the statute of limitations is automatically

extended for 6 months from the date it would have otherwise

expired.

(b) Substantial omission of items.

(1) Omission of more than 25% of income. If the

taxpayer omits from base income an amount properly

includible therein which is in excess of 25% of the amount

of base income stated in the return, a notice of

deficiency may be issued not later than 6 years after the

return was filed. For purposes of this paragraph, there

shall not be taken into account any amount which is

omitted in the return if such amount is disclosed in the

return, or in a statement attached to the return, in a

manner adequate to apprise the Department of the nature

and the amount of such item.

(2) Reportable transactions. If a taxpayer fails to

include on any return or statement for any taxable year

any information with respect to a reportable transaction,

as required under Section 501(b) of this Act, a notice of

deficiency may be issued not later than 6 years after the

return is filed with respect to the taxable year in which

the taxpayer participated in the reportable transaction

and said deficiency is limited to the non-disclosed item.

(3) Withholding. If an employer omits from a return

required under Section 704A of this Act for any period

beginning on or after January 1, 2013, an amount required

to be withheld and to be reported on that return which is

in excess of 25% of the total amount of withholding

required to be reported on that return, a notice of

deficiency may be issued not later than 6 years after the

return was filed.

(c) No return or fraudulent return. If no return is filed

or a false and fraudulent return is filed with intent to evade

the tax imposed by this Act, a notice of deficiency may be

issued at any time. For purposes of this subsection (c), any

taxpayer who is required to join in the filing of a return

filed under the provisions of subsection (e) of Section 502 of

this Act for a taxable year ending on or after December 31,

2013 and who is not included on that return and does not file

its own return for that taxable year shall be deemed to have

failed to file a return; provided that the amount of any

proposed assessment set forth in a notice of deficiency issued

under this subsection (c) shall be limited to the amount of any

increase in liability under this Act that should have reported

on the return required under the provisions of subsection (e)

of Section 502 of this Act for that taxable year resulting from

proper inclusion of that taxpayer on that return.

(d) Failure to report federal change. If a taxpayer fails

to notify the Department in any case where notification is

required by Section 304(c) or 506(b), or fails to report a

change or correction which is treated in the same manner as if

it were a deficiency for federal income tax purposes, a notice

of deficiency may be issued (i) at any time or (ii) on or after

August 13, 1999, at any time for the taxable year for which the

notification is required or for any taxable year to which the

taxpayer may carry an Article 2 credit, or a Section 207 loss,

earned, incurred, or used in the year for which the

notification is required; provided, however, that the amount

of any proposed assessment set forth in the notice shall be

limited to the amount of any deficiency resulting under this

Act from the recomputation of the taxpayer's net income,

Article 2 credits, or Section 207 loss earned, incurred, or

used in the taxable year for which the notification is

required after giving effect to the item or items required to

be reported.

(e) Report of federal change.

(1) Before August 13, 1999, in any case where

notification of an alteration is given as required by

Section 506(b), a notice of deficiency may be issued at

any time within 2 years after the date such notification

is given, provided, however, that the amount of any

proposed assessment set forth in such notice shall be

limited to the amount of any deficiency resulting under

this Act from recomputation of the taxpayer's net income,

net loss, or Article 2 credits for the taxable year after

giving effect to the item or items reflected in the

reported alteration.

(2) On and after August 13, 1999, in any case where

notification of an alteration is given as required by

Section 506(b), a notice of deficiency may be issued at

any time within 2 years after the date such notification

is given for the taxable year for which the notification

is given or for any taxable year to which the taxpayer may

carry an Article 2 credit, or a Section 207 loss, earned,

incurred, or used in the year for which the notification

is given, provided, however, that the amount of any

proposed assessment set forth in such notice shall be

limited to the amount of any deficiency resulting under

this Act from recomputation of the taxpayer's net income,

Article 2 credits, or Section 207 loss earned, incurred,

or used in the taxable year for which the notification is

given after giving effect to the item or items reflected

in the reported alteration.

(f) Extension by agreement. Where, before the expiration

of the time prescribed in this Section for the issuance of a

notice of deficiency, both the Department and the taxpayer

shall have consented in writing to its issuance after such

time, such notice may be issued at any time prior to the

expiration of the period agreed upon. In the case of a taxpayer

who is a partnership, Subchapter S corporation, or trust and

who enters into an agreement with the Department pursuant to

this subsection on or after January 1, 2003, a notice of

deficiency may be issued to the partners, shareholders, or

beneficiaries of the taxpayer at any time prior to the

expiration of the period agreed upon. Any proposed assessment

set forth in the notice, however, shall be limited to the

amount of any deficiency resulting under this Act from

recomputation of items of income, deduction, credits, or other

amounts of the taxpayer that are taken into account by the

partner, shareholder, or beneficiary in computing its

liability under this Act. The period so agreed upon may be

extended by subsequent agreements in writing made before the

expiration of the period previously agreed upon.

(g) Erroneous refunds. In any case in which there has been

an erroneous refund of tax payable under this Act, a notice of

deficiency may be issued at any time within 2 years from the

making of such refund, or within 5 years from the making of

such refund if it appears that any part of the refund was

induced by fraud or the misrepresentation of a material fact,

provided, however, that the amount of any proposed assessment

set forth in such notice shall be limited to the amount of such

erroneous refund.

Beginning July 1, 1993, in any case in which there has been

a refund of tax payable under this Act attributable to a net

loss carryback as provided for in Section 207, and that refund

is subsequently determined to be an erroneous refund due to a

reduction in the amount of the net loss which was originally

carried back, a notice of deficiency for the erroneous refund

amount may be issued at any time during the same time period in

which a notice of deficiency can be issued on the loss year

creating the carryback amount and subsequent erroneous refund.

The amount of any proposed assessment set forth in the notice

shall be limited to the amount of such erroneous refund.

(h) Time return deemed filed. For purposes of this Section

a tax return filed before the last day prescribed by law

(including any extension thereof) shall be deemed to have been

filed on such last day.

(i) Request for prompt determination of liability. For

purposes of subsection (a)(1), in the case of a tax return

required under this Act in respect of a decedent, or by his

estate during the period of administration, or by a

corporation, the period referred to in such Subsection shall

be 18 months after a written request for prompt determination

of liability is filed with the Department (at such time and in

such form and manner as the Department shall by regulations

prescribe) by the executor, administrator, or other fiduciary

representing the estate of such decedent, or by such

corporation, but not more than 3 years after the date the

return was filed. This subsection shall not apply in the case

of a corporation unless:

(1) (A) such written request notifies the Department

that the corporation contemplates dissolution at or before

the expiration of such 18-month period, (B) the

dissolution is begun in good faith before the expiration

of such 18-month period, and (C) the dissolution is

completed;

(2) (A) such written request notifies the Department

that a dissolution has in good faith been begun, and (B)

the dissolution is completed; or

(3) a dissolution has been completed at the time such

written request is made.

(j) Withholding tax. In the case of returns required under

Article 7 of this Act (with respect to any amounts withheld as

tax or any amounts required to have been withheld as tax) a

notice of deficiency shall be issued not later than 3 years

after the 15th day of the 4th month following the close of the

calendar year in which such withholding was required.

(k) Penalties for failure to make information reports. A

notice of deficiency for the penalties provided by Subsection

1405.1(c) of this Act may not be issued more than 3 years after

the due date of the reports with respect to which the penalties

are asserted.

(l) Penalty for failure to file withholding returns. A

notice of deficiency for penalties provided by Section 1004 of

this Act for taxpayer's failure to file withholding returns

may not be issued more than three years after the 15th day of

the 4th month following the close of the calendar year in which

the withholding giving rise to taxpayer's obligation to file

those returns occurred.

(m) Transferee liability. A notice of deficiency may be

issued to a transferee relative to a liability asserted under

Section 1405 during time periods defined as follows:

1) Initial Transferee. In the case of the liability of

an initial transferee, up to 2 years after the expiration

of the period of limitation for assessment against the

transferor, except that if a court proceeding for review

of the assessment against the transferor has begun, then

up to 2 years after the return of the certified copy of the

judgment in the court proceeding.

2) Transferee of Transferee. In the case of the

liability of a transferee, up to 2 years after the

expiration of the period of limitation for assessment

against the preceding transferee, but not more than 3

years after the expiration of the period of limitation for

assessment against the initial transferor; except that if,

before the expiration of the period of limitation for the

assessment of the liability of the transferee, a court

proceeding for the collection of the tax or liability in

respect thereof has been begun against the initial

transferor or the last preceding transferee, as the case

may be, then the period of limitation for assessment of

the liability of the transferee shall expire 2 years after

the return of the certified copy of the judgment in the

court proceeding.

(n) Notice of decrease in net loss. On and after August 23,

2002, no notice of deficiency shall be issued as the result of

a decrease determined by the Department in the net loss

incurred by a taxpayer in any taxable year ending prior to

December 31, 2002 under Section 207 of this Act unless the

Department has notified the taxpayer of the proposed decrease

within 3 years after the return reporting the loss was filed or

within one year after an amended return reporting an increase

in the loss was filed, provided that in the case of an amended

return, a decrease proposed by the Department more than 3

years after the original return was filed may not exceed the

increase claimed by the taxpayer on the original return.

(Source: P.A. 98-496, eff. 1-1-14.)

Section 15. The Use Tax Act is amended by changing Section

21 as follows:

(35 ILCS 105/21) (from Ch. 120, par. 439.21)

Sec. 21. As to any claim for credit or refund filed with

the Department on and after January 1 but on or before June 30

of any given year, no amount of tax or penalty or interest

erroneously paid (either in total or partial liquidation of a

tax or penalty or interest under this Act) more than 3 years

prior to such January 1 shall be credited or refunded, and as

to any such claim filed on and after July 1 but on or before

December 31 of any given year, no amount of tax or penalty or

interest erroneously paid (either in total or partial

liquidation of a tax or penalty or interest under this Act)

more than 3 years prior to such July 1 shall be credited or

refunded. Notwithstanding any other provision of this Act to

the contrary, for any period included in a claim for credit or

refund for which the statute of limitations for issuing a

notice of tax liability under this Act will expire less than 6

months after the date a taxpayer files the claim for credit or

refund, the statute of limitations is automatically extended

for 6 months from the date it would have otherwise expired. No

claim shall be allowed for any amount paid to the Department,

whether paid voluntarily or involuntarily, if paid in total or

partial liquidation of an assessment which had become final

before the claim for credit or refund to recover the amount so

paid is filed with the Department, or if paid in total or

partial liquidation of a judgment or order of court.

(Source: P.A. 79-1366; 79-1365.)

Section 20. The Service Occupation Tax Act is amended by

changing Section 19 as follows:

(35 ILCS 115/19) (from Ch. 120, par. 439.119)

Sec. 19. As to any claim for credit or refund filed with

the Department on or after each January 1 and July 1, no amount

of tax or penalty or interest erroneously paid (either in

total or partial liquidation of a tax or penalty or interest

under this Act) more than 3 years prior to such January 1 and

July 1, respectively, shall be credited or refunded, except

that if both the Department and taxpayer have agreed to an

extension of time to issue a notice of tax liability as

provided in Section 4 of the Retailers' Occupation Tax Act,

such claim may be filed at any time prior to the expiration of

the period agreed upon. Notwithstanding any other provision of

this Act to the contrary, for any period included in a claim

for credit or refund for which the statute of limitations for

issuing a notice of tax liability under this Act will expire

less than 6 months after the date a taxpayer files the claim

for credit or refund, the statute of limitations is

automatically extended for 6 months from the date it would

have otherwise expired. No claim shall be allowed for any

amount paid to the Department, whether paid voluntarily or

involuntarily, if paid in total or partial liquidation of an

assessment which had become final before the claim for credit

or refund to recover the amount so paid is filed with the

Department, or if paid in total or partial liquidation of a

judgment or order of court.

(Source: P.A. 90-562, eff. 12-16-97.)

Section 25. The Retailers' Occupation Tax Act is amended

by changing Sections 2a and 6 as follows:

(35 ILCS 120/2a) (from Ch. 120, par. 441a)

Sec. 2a. It is unlawful for any person to engage in the

business of selling tangible personal property at retail in

this State without a certificate of registration from the

Department. Application for a certificate of registration

shall be made to the Department upon forms furnished by it.

Each such application shall be signed and verified and shall

state: (1) the name and social security number of the

applicant; (2) the address of his principal place of business;

(3) the address of the principal place of business from which

he engages in the business of selling tangible personal

property at retail in this State and the addresses of all other

places of business, if any (enumerating such addresses, if

any, in a separate list attached to and made a part of the

application), from which he engages in the business of selling

tangible personal property at retail in this State; (4) the

name and address of the person or persons who will be

responsible for filing returns and payment of taxes due under

this Act; (5) in the case of a publicly traded corporation, the

name and title of the Chief Financial Officer, Chief Operating

Officer, and any other officer or employee with responsibility

for preparing tax returns under this Act, and, in the case of

all other corporations, the name, title, and social security

number of each corporate officer; (6) in the case of a limited

liability company, the name, social security number, and FEIN

number of each manager and member; and (7) such other

information as the Department may reasonably require. The

application shall contain an acceptance of responsibility

signed by the person or persons who will be responsible for

filing returns and payment of the taxes due under this Act. If

the applicant will sell tangible personal property at retail

through vending machines, his application to register shall

indicate the number of vending machines to be so operated. If

requested by the Department at any time, that person shall

verify the total number of vending machines he or she uses in

his or her business of selling tangible personal property at

retail.

The Department shall provide by rule for an expedited

business registration process for remote retailers required to

register and file under subsection (b) of Section 2 who use a

certified service provider to file their returns under this

Act. Such expedited registration process shall allow the

Department to register a taxpayer based upon the same

registration information required by the Streamlined Sales Tax

Governing Board for states participating in the Streamlined

Sales Tax Project.

The Department may deny a certificate of registration to

any applicant if a person who is named as the owner, a partner,

a manager or member of a limited liability company, or a

corporate officer of the applicant on the application for the

certificate of registration is or has been named as the owner,

a partner, a manager or member of a limited liability company,

or a corporate officer on the application for the certificate

of registration of another retailer that is in default for

moneys due under this Act or any other tax or fee Act

administered by the Department. For purposes of this paragraph

only, in determining whether a person is in default for moneys

due, the Department shall include only amounts established as

a final liability within the 23 20 years prior to the date of

the Department's notice of denial of a certificate of

registration.

The Department may require an applicant for a certificate

of registration hereunder to, at the time of filing such

application, furnish a bond from a surety company authorized

to do business in the State of Illinois, or an irrevocable bank

letter of credit or a bond signed by 2 personal sureties who

have filed, with the Department, sworn statements disclosing

net assets equal to at least 3 times the amount of the bond to

be required of such applicant, or a bond secured by an

assignment of a bank account or certificate of deposit, stocks

or bonds, conditioned upon the applicant paying to the State

of Illinois all moneys becoming due under this Act and under

any other State tax law or municipal or county tax ordinance or

resolution under which the certificate of registration that is

issued to the applicant under this Act will permit the

applicant to engage in business without registering separately

under such other law, ordinance or resolution. In making a

determination as to whether to require a bond or other

security, the Department shall take into consideration whether

the owner, any partner, any manager or member of a limited

liability company, or a corporate officer of the applicant is

or has been the owner, a partner, a manager or member of a

limited liability company, or a corporate officer of another

retailer that is in default for moneys due under this Act or

any other tax or fee Act administered by the Department; and

whether the owner, any partner, any manager or member of a

limited liability company, or a corporate officer of the

applicant is or has been the owner, a partner, a manager or

member of a limited liability company, or a corporate officer

of another retailer whose certificate of registration has been

revoked within the previous 5 years under this Act or any other

tax or fee Act administered by the Department. If a bond or

other security is required, the Department shall fix the

amount of the bond or other security, taking into

consideration the amount of money expected to become due from

the applicant under this Act and under any other State tax law

or municipal or county tax ordinance or resolution under which

the certificate of registration that is issued to the

applicant under this Act will permit the applicant to engage

in business without registering separately under such other

law, ordinance, or resolution. The amount of security required

by the Department shall be such as, in its opinion, will

protect the State of Illinois against failure to pay the

amount which may become due from the applicant under this Act

and under any other State tax law or municipal or county tax

ordinance or resolution under which the certificate of

registration that is issued to the applicant under this Act

will permit the applicant to engage in business without

registering separately under such other law, ordinance or

resolution, but the amount of the security required by the

Department shall not exceed three times the amount of the

applicant's average monthly tax liability, or $50,000.00,

whichever amount is lower.

No certificate of registration under this Act shall be

issued by the Department until the applicant provides the

Department with satisfactory security, if required, as herein

provided for.

Upon receipt of the application for certificate of

registration in proper form, and upon approval by the

Department of the security furnished by the applicant, if

required, the Department shall issue to such applicant a

certificate of registration which shall permit the person to

whom it is issued to engage in the business of selling tangible

personal property at retail in this State. The certificate of

registration shall be conspicuously displayed at the place of

business which the person so registered states in his

application to be the principal place of business from which

he engages in the business of selling tangible personal

property at retail in this State.

No certificate of registration issued prior to July 1,

2017 to a taxpayer who files returns required by this Act on a

monthly basis or renewed prior to July 1, 2017 by a taxpayer

who files returns required by this Act on a monthly basis shall

be valid after the expiration of 5 years from the date of its

issuance or last renewal. No certificate of registration

issued on or after July 1, 2017 to a taxpayer who files returns

required by this Act on a monthly basis or renewed on or after

July 1, 2017 by a taxpayer who files returns required by this

Act on a monthly basis shall be valid after the expiration of

one year from the date of its issuance or last renewal. The

expiration date of a sub-certificate of registration shall be

that of the certificate of registration to which the

sub-certificate relates. Prior to July 1, 2017, a certificate

of registration shall automatically be renewed, subject to

revocation as provided by this Act, for an additional 5 years

from the date of its expiration unless otherwise notified by

the Department as provided by this paragraph. On and after

July 1, 2017, a certificate of registration shall

automatically be renewed, subject to revocation as provided by

this Act, for an additional one year from the date of its

expiration unless otherwise notified by the Department as

provided by this paragraph.

Where a taxpayer to whom a certificate of registration is

issued under this Act is in default to the State of Illinois

for delinquent returns or for moneys due under this Act or any

other State tax law or municipal or county ordinance

administered or enforced by the Department, the Department

shall, not less than 60 days before the expiration date of such

certificate of registration, give notice to the taxpayer to

whom the certificate was issued of the account period of the

delinquent returns, the amount of tax, penalty and interest

due and owing from the taxpayer, and that the certificate of

registration shall not be automatically renewed upon its

expiration date unless the taxpayer, on or before the date of

expiration, has filed and paid the delinquent returns or paid

the defaulted amount in full. A taxpayer to whom such a notice

is issued shall be deemed an applicant for renewal. The

Department shall promulgate regulations establishing

procedures for taxpayers who file returns on a monthly basis

but desire and qualify to change to a quarterly or yearly

filing basis and will no longer be subject to renewal under

this Section, and for taxpayers who file returns on a yearly or

quarterly basis but who desire or are required to change to a

monthly filing basis and will be subject to renewal under this

Section.

The Department may in its discretion approve renewal by an

applicant who is in default if, at the time of application for

renewal, the applicant files all of the delinquent returns or

pays to the Department such percentage of the defaulted amount

as may be determined by the Department and agrees in writing to

waive all limitations upon the Department for collection of

the remaining defaulted amount to the Department over a period

not to exceed 5 years from the date of renewal of the

certificate; however, no renewal application submitted by an

applicant who is in default shall be approved if the

immediately preceding renewal by the applicant was conditioned

upon the installment payment agreement described in this

Section. The payment agreement herein provided for shall be in

addition to and not in lieu of the security that may be

required by this Section of a taxpayer who is no longer

considered a prior continuous compliance taxpayer. The

execution of the payment agreement as provided in this Act

shall not toll the accrual of interest at the statutory rate.

The Department may suspend a certificate of registration

if the Department finds that the person to whom the

certificate of registration has been issued knowingly sold

contraband cigarettes.

A certificate of registration issued under this Act more

than 5 years before January 1, 1990 (the effective date of

Public Act 86-383) shall expire and be subject to the renewal

provisions of this Section on the next anniversary of the date

of issuance of such certificate which occurs more than 6

months after January 1, 1990 (the effective date of Public Act

86-383). A certificate of registration issued less than 5

years before January 1, 1990 (the effective date of Public Act

86-383) shall expire and be subject to the renewal provisions

of this Section on the 5th anniversary of the issuance of the

certificate.

If the person so registered states that he operates other

places of business from which he engages in the business of

selling tangible personal property at retail in this State,

the Department shall furnish him with a sub-certificate of

registration for each such place of business, and the

applicant shall display the appropriate sub-certificate of

registration at each such place of business. All

sub-certificates of registration shall bear the same

registration number as that appearing upon the certificate of

registration to which such sub-certificates relate.

If the applicant will sell tangible personal property at

retail through vending machines, the Department shall furnish

him with a sub-certificate of registration for each such

vending machine, and the applicant shall display the

appropriate sub-certificate of registration on each such

vending machine by attaching the sub-certificate of

registration to a conspicuous part of such vending machine. If

a person who is registered to sell tangible personal property

at retail through vending machines adds an additional vending

machine or additional vending machines to the number of

vending machines he or she uses in his or her business of

selling tangible personal property at retail, he or she shall

notify the Department, on a form prescribed by the Department,

to request an additional sub-certificate or additional

sub-certificates of registration, as applicable. With each

such request, the applicant shall report the number of

sub-certificates of registration he or she is requesting as

well as the total number of vending machines from which he or

she makes retail sales.

Where the same person engages in 2 or more businesses of

selling tangible personal property at retail in this State,

which businesses are substantially different in character or

engaged in under different trade names or engaged in under

other substantially dissimilar circumstances (so that it is

more practicable, from an accounting, auditing or bookkeeping

standpoint, for such businesses to be separately registered),

the Department may require or permit such person (subject to

the same requirements concerning the furnishing of security as

those that are provided for hereinbefore in this Section as to

each application for a certificate of registration) to apply

for and obtain a separate certificate of registration for each

such business or for any of such businesses, under a single

certificate of registration supplemented by related

sub-certificates of registration.

Any person who is registered under the Retailers'

Occupation Tax Act as of March 8, 1963, and who, during the

3-year period immediately prior to March 8, 1963, or during a

continuous 3-year period part of which passed immediately

before and the remainder of which passes immediately after

March 8, 1963, has been so registered continuously and who is

determined by the Department not to have been either

delinquent or deficient in the payment of tax liability during

that period under this Act or under any other State tax law or

municipal or county tax ordinance or resolution under which

the certificate of registration that is issued to the

registrant under this Act will permit the registrant to engage

in business without registering separately under such other

law, ordinance or resolution, shall be considered to be a

Prior Continuous Compliance taxpayer. Also any taxpayer who

has, as verified by the Department, faithfully and

continuously complied with the condition of his bond or other

security under the provisions of this Act for a period of 3

consecutive years shall be considered to be a Prior Continuous

Compliance taxpayer.

Every Prior Continuous Compliance taxpayer shall be exempt

from all requirements under this Act concerning the furnishing

of a bond or other security as a condition precedent to his

being authorized to engage in the business of selling tangible

personal property at retail in this State. This exemption

shall continue for each such taxpayer until such time as he may

be determined by the Department to be delinquent in the filing

of any returns, or is determined by the Department (either

through the Department's issuance of a final assessment which

has become final under the Act, or by the taxpayer's filing of

a return which admits tax that is not paid to be due) to be

delinquent or deficient in the paying of any tax under this Act

or under any other State tax law or municipal or county tax

ordinance or resolution under which the certificate of

registration that is issued to the registrant under this Act

will permit the registrant to engage in business without

registering separately under such other law, ordinance or

resolution, at which time that taxpayer shall become subject

to all the financial responsibility requirements of this Act

and, as a condition of being allowed to continue to engage in

the business of selling tangible personal property at retail,

may be required to post bond or other acceptable security with

the Department covering liability which such taxpayer may

thereafter incur. Any taxpayer who fails to pay an admitted or

established liability under this Act may also be required to

post bond or other acceptable security with this Department

guaranteeing the payment of such admitted or established

liability.

No certificate of registration shall be issued to any

person who is in default to the State of Illinois for moneys

due under this Act or under any other State tax law or

municipal or county tax ordinance or resolution under which

the certificate of registration that is issued to the

applicant under this Act will permit the applicant to engage

in business without registering separately under such other

law, ordinance or resolution.

Any person aggrieved by any decision of the Department

under this Section may, within 20 days after notice of such

decision, protest and request a hearing, whereupon the

Department shall give notice to such person of the time and

place fixed for such hearing and shall hold a hearing in

conformity with the provisions of this Act and then issue its

final administrative decision in the matter to such person. In

the absence of such a protest within 20 days, the Department's

decision shall become final without any further determination

being made or notice given.

With respect to security other than bonds (upon which the

Department may sue in the event of a forfeiture), if the

taxpayer fails to pay, when due, any amount whose payment such

security guarantees, the Department shall, after such

liability is admitted by the taxpayer or established by the

Department through the issuance of a final assessment that has

become final under the law, convert the security which that

taxpayer has furnished into money for the State, after first

giving the taxpayer at least 10 days' written notice, by

registered or certified mail, to pay the liability or forfeit

such security to the Department. If the security consists of

stocks or bonds or other securities which are listed on a

public exchange, the Department shall sell such securities

through such public exchange. If the security consists of an

irrevocable bank letter of credit, the Department shall

convert the security in the manner provided for in the Uniform

Commercial Code. If the security consists of a bank

certificate of deposit, the Department shall convert the

security into money by demanding and collecting the amount of

such bank certificate of deposit from the bank which issued

such certificate. If the security consists of a type of stocks

or other securities which are not listed on a public exchange,

the Department shall sell such security to the highest and

best bidder after giving at least 10 days' notice of the date,

time and place of the intended sale by publication in the

"State Official Newspaper". If the Department realizes more

than the amount of such liability from the security, plus the

expenses incurred by the Department in converting the security

into money, the Department shall pay such excess to the

taxpayer who furnished such security, and the balance shall be

paid into the State Treasury.

The Department shall discharge any surety and shall

release and return any security deposited, assigned, pledged

or otherwise provided to it by a taxpayer under this Section

within 30 days after:

(1) such taxpayer becomes a Prior Continuous

Compliance taxpayer; or

(2) such taxpayer has ceased to collect receipts on

which he is required to remit tax to the Department, has

filed a final tax return, and has paid to the Department an

amount sufficient to discharge his remaining tax

liability, as determined by the Department, under this Act

and under every other State tax law or municipal or county

tax ordinance or resolution under which the certificate of

registration issued under this Act permits the registrant

to engage in business without registering separately under

such other law, ordinance or resolution. The Department

shall make a final determination of the taxpayer's

outstanding tax liability as expeditiously as possible

after his final tax return has been filed; if the

Department cannot make such final determination within 45

days after receiving the final tax return, within such

period it shall so notify the taxpayer, stating its

reasons therefor.

(Source: P.A. 100-302, eff. 8-24-17; 100-303, eff. 8-24-17;

100-863, eff. 8-14-18; 101-31, eff. 6-28-19.)

(35 ILCS 120/6) (from Ch. 120, par. 445)

Sec. 6. Credit memorandum or refund. If it appears, after

claim therefor filed with the Department, that an amount of

tax or penalty or interest has been paid which was not due

under this Act, whether as the result of a mistake of fact or

an error of law, except as hereinafter provided, then the

Department shall issue a credit memorandum or refund to the

person who made the erroneous payment or, if that person died

or became a person under legal disability, to his or her legal

representative, as such. For purposes of this Section, the tax

is deemed to be erroneously paid by a retailer when the

manufacturer of a motor vehicle sold by the retailer accepts

the return of that automobile and refunds to the purchaser the

selling price of that vehicle as provided in the New Vehicle

Buyer Protection Act. When a motor vehicle is returned for a

refund of the purchase price under the New Vehicle Buyer

Protection Act, the Department shall issue a credit memorandum

or a refund for the amount of tax paid by the retailer under

this Act attributable to the initial sale of that vehicle.

Claims submitted by the retailer are subject to the same

restrictions and procedures provided for in this Act. If it is

determined that the Department should issue a credit

memorandum or refund, the Department may first apply the

amount thereof against any tax or penalty or interest due or to

become due under this Act or under the Use Tax Act, the Service

Occupation Tax Act, the Service Use Tax Act, any local

occupation or use tax administered by the Department, Section

4 of the Water Commission Act of 1985, subsections (b), (c) and

(d) of Section 5.01 of the Local Mass Transit District Act, or

subsections (e), (f) and (g) of Section 4.03 of the Regional

Transportation Authority Act, from the person who made the

erroneous payment. If no tax or penalty or interest is due and

no proceeding is pending to determine whether such person is

indebted to the Department for tax or penalty or interest, the

credit memorandum or refund shall be issued to the claimant;

or (in the case of a credit memorandum) the credit memorandum

may be assigned and set over by the lawful holder thereof,

subject to reasonable rules of the Department, to any other

person who is subject to this Act, the Use Tax Act, the Service

Occupation Tax Act, the Service Use Tax Act, any local

occupation or use tax administered by the Department, Section

4 of the Water Commission Act of 1985, subsections (b), (c) and

(d) of Section 5.01 of the Local Mass Transit District Act, or

subsections (e), (f) and (g) of Section 4.03 of the Regional

Transportation Authority Act, and the amount thereof applied

by the Department against any tax or penalty or interest due or

to become due under this Act or under the Use Tax Act, the

Service Occupation Tax Act, the Service Use Tax Act, any local

occupation or use tax administered by the Department, Section

4 of the Water Commission Act of 1985, subsections (b), (c) and

(d) of Section 5.01 of the Local Mass Transit District Act, or

subsections (e), (f) and (g) of Section 4.03 of the Regional

Transportation Authority Act, from such assignee. However, as

to any claim for credit or refund filed with the Department on

and after each January 1 and July 1 no amount of tax or penalty

or interest erroneously paid (either in total or partial

liquidation of a tax or penalty or amount of interest under

this Act) more than 3 years prior to such January 1 and July 1,

respectively, shall be credited or refunded, except that if

both the Department and the taxpayer have agreed to an

extension of time to issue a notice of tax liability as

provided in Section 4 of this Act, such claim may be filed at

any time prior to the expiration of the period agreed upon.

Notwithstanding any other provision of this Act to the

contrary, for any period included in a claim for credit or

refund for which the statute of limitations for issuing a

notice of tax liability under this Act will expire less than 6

months after the date a taxpayer files the claim for credit or

refund, the statute of limitations is automatically extended

for 6 months from the date it would have otherwise expired.

No claim may be allowed for any amount paid to the

Department, whether paid voluntarily or involuntarily, if paid

in total or partial liquidation of an assessment which had

become final before the claim for credit or refund to recover

the amount so paid is filed with the Department, or if paid in

total or partial liquidation of a judgment or order of court.

No credit may be allowed or refund made for any amount paid by

or collected from any claimant unless it appears (a) that the

claimant bore the burden of such amount and has not been

relieved thereof nor reimbursed therefor and has not shifted

such burden directly or indirectly through inclusion of such

amount in the price of the tangible personal property sold by

him or her or in any manner whatsoever; and that no

understanding or agreement, written or oral, exists whereby he

or she or his or her legal representative may be relieved of

the burden of such amount, be reimbursed therefor or may shift

the burden thereof; or (b) that he or she or his or her legal

representative has repaid unconditionally such amount to his

or her vendee (1) who bore the burden thereof and has not

shifted such burden directly or indirectly, in any manner

whatsoever; (2) who, if he or she has shifted such burden, has

repaid unconditionally such amount to his own vendee; and (3)

who is not entitled to receive any reimbursement therefor from

any other source than from his or her vendor, nor to be

relieved of such burden in any manner whatsoever. No credit

may be allowed or refund made for any amount paid by or

collected from any claimant unless it appears that the

claimant has unconditionally repaid, to the purchaser, any

amount collected from the purchaser and retained by the

claimant with respect to the same transaction under the Use

Tax Act.

Any credit or refund that is allowed under this Section

shall bear interest at the rate and in the manner specified in

the Uniform Penalty and Interest Act.

In case the Department determines that the claimant is

entitled to a refund, such refund shall be made only from the

Aviation Fuel Sales Tax Refund Fund or from such appropriation

as may be available for that purpose, as appropriate. If it

appears unlikely that the amount available would permit

everyone having a claim allowed during the period covered by

such appropriation or from the Aviation Fuel Sales Tax Refund

Fund, as appropriate, to elect to receive a cash refund, the

Department, by rule or regulation, shall provide for the

payment of refunds in hardship cases and shall define what

types of cases qualify as hardship cases.

If a retailer who has failed to pay retailers' occupation

tax on gross receipts from retail sales is required by the

Department to pay such tax, such retailer, without filing any

formal claim with the Department, shall be allowed to take

credit against such retailers' occupation tax liability to the

extent, if any, to which such retailer has paid an amount

equivalent to retailers' occupation tax or has paid use tax in

error to his or her vendor or vendors of the same tangible

personal property which such retailer bought for resale and

did not first use before selling it, and no penalty or interest

shall be charged to such retailer on the amount of such credit.

However, when such credit is allowed to the retailer by the

Department, the vendor is precluded from refunding any of that

tax to the retailer and filing a claim for credit or refund

with respect thereto with the Department. The provisions of

this amendatory Act shall be applied retroactively, regardless

of the date of the transaction.

(Source: P.A. 101-10, eff. 6-5-19.)

Section 30. The Cigarette Machine Operators' Occupation

Tax Act is amended by changing Section 1-55 as follows:

(35 ILCS 128/1-55)

Sec. 1-55. Claims; credit memorandum or refunds. If it

appears, after claim is filed with the Department, that an

amount of tax or penalty has been paid which was not due under

this Act, whether as the result of a mistake of fact or an

error of law, except as hereinafter provided, then the

Department shall issue a credit memorandum or refund to the

person who made the erroneous payment or, if that person has

died or become a person under legal disability, to his or her

legal representative.

If it is determined that the Department should issue a

credit or refund under this Act, the Department may first

apply the amount thereof against any amount of tax or penalty

due under this Act, the Cigarette Tax Act, the Cigarette Use

Tax Act, or the Tobacco Products Act of 1995 from the person

entitled to that credit or refund. For this purpose, if

proceedings are pending to determine whether or not any tax or

penalty is due under this Act or under the Cigarette Tax Act,

Cigarette Use Tax Act, or the Tobacco Products Act of 1995 from

the person, the Department may withhold issuance of the credit

or refund pending the final disposition of such proceedings

and may apply such credit or refund against any amount found to

be due to the Department under this Act, the Cigarette Tax Act,

the Cigarette Use Tax Act, or the Tobacco Products Act of 1995

as a result of such proceedings. The balance, if any, of the

credit or refund shall be issued to the person entitled

thereto.

If no tax or penalty is due and no proceeding is pending to

determine whether such taxpayer is indebted to the Department

for the payment of a tax or penalty, the credit memorandum or

refund shall be issued to the claimant; or (in the case of a

credit memorandum) the credit memorandum may be assigned and

set over by the lawful holder thereof, subject to reasonable

rules of the Department, to any other person who is subject to

this Act, the Cigarette Tax Act, the Cigarette Use Tax Act, or

the Tobacco Products Act of 1995, and the amount thereof shall

be applied by the Department against any tax or penalty due or

to become due under this Act, the Cigarette Tax Act, the

Cigarette Use Tax Act, or the Tobacco Products Act of 1995 from

such assignee.

As to any claim filed hereunder with the Department on and

after each January 1 and July 1, no amount of tax or penalty

erroneously paid (either in total or partial liquidation of a

tax or penalty under this Act) more than 3 years prior to such

January 1 and July 1, respectively, shall be credited or

refunded, except that, if both the Department and the taxpayer

have agreed to an extension of time to issue a notice of tax

liability under this Act, the claim may be filed at any time

prior to the expiration of the period agreed upon.

Notwithstanding any other provision of this Act to the

contrary, for any period included in a claim for credit or

refund for which the statute of limitations for issuing a

notice of tax liability under this Act will expire less than 6

months after the date a taxpayer files the claim for credit or

refund, the statute of limitations is automatically extended

for 6 months from the date it would have otherwise expired.

Any credit or refund that is allowed under this Act shall

bear interest at the rate and in the manner set forth in the

Uniform Penalty and Interest Act.

In case the Department determines that the claimant is

entitled to a refund, such refund shall be made only from

appropriations available for that purpose. If it appears

unlikely that the amount appropriated would permit everyone

having a claim allowed during the period covered by such

appropriation to elect to receive a cash refund, the

Department, by rule or regulation, shall provide for the

payment of refunds in hardship cases and shall define what

types of cases qualify as hardship cases.

The provisions of Sections 6a, 6b, and 6c of the

Retailers' Occupation Tax Act which are not inconsistent with

this Act shall apply, as far as practicable, to the subject

matter of this Act to the same extent as if such provisions

were included herein.

(Source: P.A. 97-688, eff. 6-14-12.)

Section 35. The Cigarette Tax Act is amended by changing

Section 9d as follows:

(35 ILCS 130/9d) (from Ch. 120, par. 453.9d)

Sec. 9d. If it appears, after claim therefor filed with

the Department, that an amount of tax or penalty has been paid

which was not due under this Act, whether as the result of a

mistake of fact or an error of law, except as hereinafter

provided, then the Department shall issue a credit memorandum

or refund to the person who made the erroneous payment or, if

that person has died or become a person under legal

disability, to his or her legal representative, as such.

If it is determined that the Department should issue a

credit or refund under this Act, the Department may first

apply the amount thereof against any amount of tax or penalty

due under this Act or under the Cigarette Use Tax Act from the

person entitled to such credit or refund. For this purpose, if

proceedings are pending to determine whether or not any tax or

penalty is due under this Act or under the Cigarette Use Tax

Act from such person, the Department may withhold issuance of

the credit or refund pending the final disposition of such

proceedings and may apply such credit or refund against any

amount found to be due to the Department under this Act or

under the Cigarette Use Tax Act as a result of such

proceedings. The balance, if any, of the credit or refund

shall be issued to the person entitled thereto.

If no tax or penalty is due and no proceeding is pending to

determine whether such taxpayer is indebted to the Department

for tax or penalty, the credit memorandum or refund shall be

issued to the claimant; or (in the case of a credit memorandum)

the credit memorandum may be assigned and set over by the

lawful holder thereof, subject to reasonable rules of the

Department, to any other person who is subject to this Act or

the Cigarette Use Tax Act, and the amount thereof shall be

applied by the Department against any tax or penalty due or to

become due under this Act or under the Cigarette Use Tax Act

from such assignee.

As to any claim filed hereunder with the Department on and

after each January 1 and July 1, no amount of tax or penalty

erroneously paid (either in total or partial liquidation of a

tax or penalty under this Act) more than 3 years prior to such

January 1 and July 1, respectively, shall be credited or

refunded, except that if both the Department and the taxpayer

have agreed to an extension of time to issue a notice of tax

liability under this Act, the claim may be filed at any time

prior to the expiration of the period agreed upon.

Notwithstanding any other provision of this Act to the

contrary, for any period included in a claim for credit or

refund for which the statute of limitations for issuing a

notice of tax liability under this Act will expire less than 6

months after the date a taxpayer files the claim for credit or

refund, the statute of limitations is automatically extended

for 6 months from the date it would have otherwise expired.

If the Department approves a claim for stamps affixed to a

product returned to a manufacturer or for replacement of

stamps, the credit memorandum shall not exceed the face value

of stamps originally affixed, and replacement stamps shall be

issued only in an amount equal to the value of the stamps

previously affixed. Higher denomination stamps shall not be

issued as replacements for lower value stamps. Distributors

must prove the face value of the stamps which have been

destroyed or returned to manufacturers when filing claims.

Any credit or refund that is allowed under this Act shall

bear interest at the rate and in the manner set forth in the

Uniform Penalty and Interest Act.

In case the Department determines that the claimant is

entitled to a refund, such refund shall be made only from such

appropriation as may be available for that purpose. If it

appears unlikely that the amount appropriated would permit

everyone having a claim allowed during the period covered by

such appropriation to elect to receive a cash refund, the

Department, by rule or regulation, shall provide for the

payment of refunds in hardship cases and shall define what

types of cases qualify as hardship cases.

If the Department approves a claim for the physical

replacement of cigarette tax stamps, the Department (subject

to the same limitations as those provided for hereinbefore in

this Section) may issue an assignable credit memorandum or

refund to the claimant or to the claimant's legal

representative.

The provisions of Sections 6a, 6b and 6c of the Retailers'

Occupation Tax Act which are not inconsistent with this Act,

shall apply, as far as practicable, to the subject matter of

this Act to the same extent as if such provisions were included

herein.

(Source: P.A. 90-491, eff. 1-1-98.)

Section 40. The Cigarette Use Tax Act is amended by

changing Section 14a as follows:

(35 ILCS 135/14a) (from Ch. 120, par. 453.44a)

Sec. 14a. If it appears, after claim therefor filed with

the Department, that an amount of tax or penalty has been paid

which was not due under this Act, whether as the result of a

mistake of fact or an error of law, except as hereinafter

provided, then the Department shall issue a credit memorandum

or refund to the person who made the erroneous payment or, if

that person has died or become a person under legal

disability, to his or her legal representative, as such.

If it is determined that the Department should issue a

credit or refund under this Act, the Department may first

apply the amount thereof against any amount of tax or penalty

due under this Act or under the Cigarette Tax Act from the

person entitled to such credit or refund. For this purpose, if

proceedings are pending to determine whether or not any tax or

penalty is due under this Act or under the Cigarette Tax Act

from such person, the Department may withhold issuance of the

credit or refund pending the final disposition of such

proceedings and may apply such credit or refund against any

amount found to be due to the Department under this Act or

under the Cigarette Tax Act as a result of such proceedings.

The balance, if any, of the credit or refund shall be issued to

the person entitled thereto.

If no tax or penalty is due and no proceeding is pending to

determine whether such taxpayer is indebted to the Department

for tax or penalty, the credit memorandum or refund shall be

issued to the claimant; or (in the case of a credit memorandum)

may be assigned and set over by the lawful holder thereof,

subject to reasonable rules of the Department, to any other

person who is subject to this Act or the Cigarette Tax Act, and

the amount thereof shall be applied by the Department against

any tax or penalty due or to become due under this Act or under

the Cigarette Tax Act from such assignee.

As to any claim filed hereunder with the Department on and

after each January 1 and July 1, no amount of tax or penalty

erroneously paid (either in total or partial liquidation of a

tax or penalty under this Act) more than 3 years prior to such

January 1 and July 1, respectively, shall be credited or

refunded, except that if both the Department and the taxpayer

have agreed to an extension of time to issue a notice of tax

liability under this Act, the claim may be filed at any time

prior to the expiration of the period agreed upon.

Notwithstanding any other provision of this Act to the

contrary, for any period included in a claim for credit or

refund for which the statute of limitations for issuing a

notice of tax liability under this Act will expire less than 6

months after the date a taxpayer files the claim for credit or

refund, the statute of limitations is automatically extended

for 6 months from the date it would have otherwise expired.

In case the Department determines that the claimant is

entitled to a refund, such refund shall be made only from such

appropriation as may be available for that purpose. If it

appears unlikely that the amount appropriated would permit

everyone having a claim allowed during the period covered by

such appropriation to elect to receive a cash refund, the

Department, by rule or regulation, shall provide for the

payment of refunds in hardship cases and shall define what

types of cases qualify as hardship cases.

If the Department approves a claim for the physical

replacement of cigarette tax stamps, the Department (subject

to the same limitations as those provided for hereinbefore in

this Section) may issue an assignable credit memorandum or

refund to the claimant or to the claimant's legal

representative.

Any credit or refund that is allowed under this Act shall

bear interest at the rate and in the manner set forth in the

Uniform Penalty and Interest Act.

The provisions of Sections 6a, 6b and 6c of the

"Retailers' Occupation Tax Act", approved June 28, 1933, as

amended, in effect on the effective date of this amendatory

Act, as subsequently amended, which are not inconsistent with

this Act, shall apply, as far as practicable, to the subject

matter of this Act to the same extent as if such provisions

were included herein.

(Source: P.A. 90-491, eff. 1-1-98.)

Section 45. The Tobacco Products Tax Act of 1995 is

amended by changing Section 10-5 as follows:

(35 ILCS 143/10-5)

Sec. 10-5. Definitions. For purposes of this Act:

"Business" means any trade, occupation, activity, or

enterprise engaged in, at any location whatsoever, for the

purpose of selling tobacco products.

"Cigarette" has the meaning ascribed to the term in

Section 1 of the Cigarette Tax Act.

"Contraband little cigar" means:

(1) packages of little cigars containing 20 or 25

little cigars that do not bear a required tax stamp under

this Act;

(2) packages of little cigars containing 20 or 25

little cigars that bear a fraudulent, imitation, or

counterfeit tax stamp;

(3) packages of little cigars containing 20 or 25

little cigars that are improperly tax stamped, including

packages of little cigars that bear only a tax stamp of

another state or taxing jurisdiction; or

(4) packages of little cigars containing other than 20

or 25 little cigars in the possession of a distributor,

retailer or wholesaler, unless the distributor, retailer,

or wholesaler possesses, or produces within the time frame

provided in Section 10-27 or 10-28 of this Act, an invoice

from a stamping distributor, distributor, or wholesaler

showing that the tax on the packages has been or will be

paid.

"Correctional Industries program" means a program run by a

State penal institution in which residents of the penal

institution produce tobacco products for sale to persons

incarcerated in penal institutions or resident patients of a

State operated mental health facility.

"Department" means the Illinois Department of Revenue.

"Distributor" means any of the following:

(1) Any manufacturer or wholesaler in this State

engaged in the business of selling tobacco products who

sells, exchanges, or distributes tobacco products to

retailers or consumers in this State.

(2) Any manufacturer or wholesaler engaged in the

business of selling tobacco products from without this

State who sells, exchanges, distributes, ships, or

transports tobacco products to retailers or consumers

located in this State, so long as that manufacturer or

wholesaler has or maintains within this State, directly or

by subsidiary, an office, sales house, or other place of

business, or any agent or other representative operating

within this State under the authority of the person or

subsidiary, irrespective of whether the place of business

or agent or other representative is located here

permanently or temporarily.

(3) Any retailer who receives tobacco products on

which the tax has not been or will not be paid by another

distributor.

"Distributor" does not include any person, wherever

resident or located, who makes, manufactures, or fabricates

tobacco products as part of a Correctional Industries program

for sale to residents incarcerated in penal institutions or

resident patients of a State operated mental health facility.

"Electronic cigarette" means:

(1) any device that employs a battery or other

mechanism to heat a solution or substance to produce a

vapor or aerosol intended for inhalation, except for (A)

any device designed solely for use with cannabis that

contains a statement on the retail packaging that the

device is designed solely for use with cannabis and not

for use with tobacco or (B) any device that contains a

solution or substance that contains cannabis subject to

tax under the Compassionate Use of Medical Cannabis

Program Act or the Cannabis Regulation and Tax Act;

(2) any cartridge or container of a solution or

substance intended to be used with or in the device or to

refill the device, except for any cartridge or container

of a solution or substance that contains cannabis subject

to tax under the Compassionate Use of Medical Cannabis

Program Act or the Cannabis Regulation and Tax Act; or

(3) any solution or substance, whether or not it

contains nicotine, intended for use in the device, except

for any solution or substance that contains cannabis

subject to tax under the Compassionate Use of Medical

Cannabis Program Act or the Cannabis Regulation and Tax

Act.

The changes made to the definition of "electronic

cigarette" by this amendatory Act of the 102nd General

Assembly apply on and after June 28, 2019, but no claim for

credit or refund is allowed on or after the effective date of

this amendatory Act of the 102nd General Assembly for such

taxes paid during the period beginning June 28, 2019 and the

effective date of this amendatory Act of the 102nd General

Assembly.

"Electronic cigarette" includes, but is not limited to,

any electronic nicotine delivery system, electronic cigar,

electronic cigarillo, electronic pipe, electronic hookah, vape

pen, or similar product or device, and any component or part

that can be used to build the product or device. "Electronic

cigarette" does not include: cigarettes, as defined in Section

1 of the Cigarette Tax Act; any product approved by the United

States Food and Drug Administration for sale as a tobacco

cessation product, a tobacco dependence product, or for other

medical purposes that is marketed and sold solely for that

approved purpose; any asthma inhaler prescribed by a physician

for that condition that is marketed and sold solely for that

approved purpose; or any therapeutic product approved for use

under the Compassionate Use of Medical Cannabis Program Act.

"Little cigar" means and includes any roll, made wholly or

in part of tobacco, where such roll has an integrated

cellulose acetate filter and weighs less than 4 pounds per

thousand and the wrapper or cover of which is made in whole or

in part of tobacco.

"Manufacturer" means any person, wherever resident or

located, who manufactures and sells tobacco products, except a

person who makes, manufactures, or fabricates tobacco products

as a part of a Correctional Industries program for sale to

persons incarcerated in penal institutions or resident

patients of a State operated mental health facility.

Beginning on January 1, 2013, "moist snuff" means any

finely cut, ground, or powdered tobacco that is not intended

to be smoked, but shall not include any finely cut, ground, or

powdered tobacco that is intended to be placed in the nasal

cavity.

"Person" means any natural individual, firm, partnership,

association, joint stock company, joint venture, limited

liability company, or public or private corporation, however

formed, or a receiver, executor, administrator, trustee,

conservator, or other representative appointed by order of any

court.

"Place of business" means and includes any place where

tobacco products are sold or where tobacco products are

manufactured, stored, or kept for the purpose of sale or

consumption, including any vessel, vehicle, airplane, train,

or vending machine.

"Retailer" means any person in this State engaged in the

business of selling tobacco products to consumers in this

State, regardless of quantity or number of sales.

"Sale" means any transfer, exchange, or barter in any

manner or by any means whatsoever for a consideration and

includes all sales made by persons.

"Stamp" or "stamps" mean the indicia required to be

affixed on a package of little cigars that evidence payment of

the tax on packages of little cigars containing 20 or 25 little

cigars under Section 10-10 of this Act. These stamps shall be

the same stamps used for cigarettes under the Cigarette Tax

Act.

"Stamping distributor" means a distributor licensed under

this Act and also licensed as a distributor under the

Cigarette Tax Act or Cigarette Use Tax Act.

"Tobacco products" means any cigars, including little

cigars; cheroots; stogies; periques; granulated, plug cut,

crimp cut, ready rubbed, and other smoking tobacco; snuff

(including moist snuff) or snuff flour; cavendish; plug and

twist tobacco; fine-cut and other chewing tobaccos; shorts;

refuse scraps, clippings, cuttings, and sweeping of tobacco;

and other kinds and forms of tobacco, prepared in such manner

as to be suitable for chewing or smoking in a pipe or

otherwise, or both for chewing and smoking; but does not

include cigarettes as defined in Section 1 of the Cigarette

Tax Act or tobacco purchased for the manufacture of cigarettes

by cigarette distributors and manufacturers defined in the

Cigarette Tax Act and persons who make, manufacture, or

fabricate cigarettes as a part of a Correctional Industries

program for sale to residents incarcerated in penal

institutions or resident patients of a State operated mental

health facility.

Beginning on July 1, 2019, "tobacco products" also

includes electronic cigarettes.

"Wholesale price" means the established list price for

which a manufacturer sells tobacco products to a distributor,

before the allowance of any discount, trade allowance, rebate,

or other reduction. In the absence of such an established list

price, the manufacturer's invoice price at which the

manufacturer sells the tobacco product to unaffiliated

distributors, before any discounts, trade allowances, rebates,

or other reductions, shall be presumed to be the wholesale

price.

"Wholesaler" means any person, wherever resident or

located, engaged in the business of selling tobacco products

to others for the purpose of resale. "Wholesaler", when used

in this Act, does not include a person licensed as a

distributor under Section 10-20 of this Act unless expressly

stated in this Act.

(Source: P.A. 101-31, eff. 6-28-19; 101-593, eff. 12-4-19.)

Section 50. The Messages Tax Act is amended by changing

Section 6 as follows:

(35 ILCS 610/6) (from Ch. 120, par. 467.6)

Sec. 6. If it appears, after claim therefor filed with the

Department, that an amount of tax or penalty or interest has

been paid which was not due under this Act, whether as the

result of a mistake of fact or an error of law, except as

hereinafter provided, then the Department shall issue a credit

memorandum or refund to the person who made the erroneous

payment or, if that person has died or become a person under

legal disability, to his or her legal representative, as such.

If it is determined that the Department should issue a

credit or refund under this Act, the Department may first

apply the amount thereof against any amount of tax or penalty

or interest due hereunder from the person entitled to such

credit or refund. For this purpose, if proceedings are pending

to determine whether or not any tax or penalty or interest is

due under this Act from such person, the Department may

withhold issuance of the credit or refund pending the final

disposition of such proceedings and may apply such credit or

refund against any amount found to be due to the Department as

a result of such proceedings. The balance, if any, of the

credit or refund shall be issued to the person entitled

thereto.

If no tax or penalty or interest is due and no proceeding

is pending to determine whether such person is indebted to the

Department for tax or penalty or interest, the credit

memorandum or refund shall be issued to the claimant; or (in

the case of a credit memorandum) the credit memorandum may be

assigned and set over by the lawful holder thereof, subject to

reasonable rules of the Department, to any other person who is

subject to this Act, and the amount thereof shall be applied by

the Department against any tax or penalty or interest due or to

become due under this Act from such assignee.

As to any claim for credit or refund filed with the

Department on or after each January 1 and July 1, no amounts

erroneously paid more than 3 years prior to such January 1 and

July 1, respectively, shall be credited or refunded, except

that if both the Department and the taxpayer have agreed to an

extension of time to issue a notice of tax liability under this

Act, the claim may be filed at any time prior to the expiration

of the period agreed upon. Notwithstanding any other provision

of this Act to the contrary, for any period included in a claim

for credit or refund for which the statute of limitations for

issuing a notice of tax liability under this Act will expire

less than 6 months after the date a taxpayer files the claim

for credit or refund, the statute of limitations is

automatically extended for 6 months from the date it would

have otherwise expired.

Claims for credit or refund shall be filed upon forms

provided by the Department. As soon as practicable after any

claim for credit or refund is filed, the Department shall

examine the same and determine the amount of credit or refund

to which the claimant is entitled and shall notify the

claimant of such determination, which amount shall be prima

facie correct.

Any credit or refund that is allowed under this Act shall

bear interest at the rate and in the manner specified in the

Uniform Penalty and Interest Act.

In case the Department determines that the claimant is

entitled to a refund, such refund shall be made only from such

appropriation as may be available for that purpose. If it

appears unlikely that the amount appropriated would permit

everyone having a claim allowed during the period covered by

such appropriation to elect to receive a cash refund, the

Department, by rule or regulation, shall provide for the

payment of refunds in hardship cases and shall define what

types of cases qualify as hardship cases.

(Source: P.A. 90-491, eff. 1-1-98.)

Section 55. The Gas Revenue Tax Act is amended by changing

Section 6 as follows:

(35 ILCS 615/6) (from Ch. 120, par. 467.21)

Sec. 6. If it appears, after claim therefor filed with the

Department, that an amount of tax or penalty or interest has

been paid which was not due under this Act, whether as the

result of a mistake of fact or an error of law, except as

hereinafter provided, then the Department shall issue a credit

memorandum or refund to the person who made the erroneous

payment or, if that person has died or become a person under

legal disability, to his or her legal representative, as such.

If it is determined that the Department should issue a

credit or refund under this Act, the Department may first

apply the amount thereof against any amount of tax or penalty

or interest due hereunder from the person entitled to such

credit or refund. For this purpose, if proceedings are pending

to determine whether or not any tax or penalty or interest is

due under this Act from such person, the Department may

withhold issuance of the credit or refund pending the final

disposition of such proceedings and may apply such credit or

refund against any amount found to be due to the Department as

a result of such proceedings. The balance, if any, of the

credit or refund shall be issued to the person entitled

thereto.

If no tax or penalty or interest is due and no proceeding

is pending to determine whether such person is indebted to the

Department for tax or penalty or interest, the credit

memorandum or refund shall be issued to the claimant; or (in

the case of a credit memorandum) the credit memorandum may be

assigned and set over by the lawful holder thereof, subject to

reasonable rules of the Department, to any other person who is

subject to this Act, and the amount thereof shall be applied by

the Department against any tax or penalty or interest due or to

become due under this Act from such assignee.

As to any claim for credit or refund filed with the

Department on or after each January 1 and July 1, no amounts

erroneously paid more than 3 years prior to such January 1 and

July 1, respectively, shall be credited or refunded, except

that if both the Department and the taxpayer have agreed to an

extension of time to issue a notice of tax liability under this

Act, the claim may be filed at any time prior to the expiration

of the period agreed upon. Notwithstanding any other provision

of this Act to the contrary, for any period included in a claim

for credit or refund for which the statute of limitations for

issuing a notice of tax liability under this Act will expire

less than 6 months after the date a taxpayer files the claim

for credit or refund, the statute of limitations is

automatically extended for 6 months from the date it would

have otherwise expired.

Claims for credit or refund shall be filed upon forms

provided by the Department. As soon as practicable after any

claim for credit or refund is filed, the Department shall

examine the same and determine the amount of credit or refund

to which the claimant is entitled and shall notify the

claimant of such determination, which amount shall be prima

facie correct.

Any credit or refund that is allowed under this Act shall

bear interest at the rate and in the manner specified in the

Uniform Penalty and Interest Act.

In case the Department determines that the claimant is

entitled to a refund, such refund shall be made only from such

appropriation as may be available for that purpose. If it

appears unlikely that the amount appropriated would permit

everyone having a claim allowed during the period covered by

such appropriation to elect to receive a cash refund, the

Department, by rule or regulation, shall provide for the

payment of refunds in hardship cases and shall define what

types of cases qualify as hardship cases.

(Source: P.A. 90-491, eff. 1-1-98.)

Section 60. The Public Utilities Revenue Act is amended by

changing Section 6 as follows:

(35 ILCS 620/6) (from Ch. 120, par. 473)

Sec. 6. If it appears, after claim therefor filed with the

Department, that an amount of tax or penalty or interest has

been paid which was not due under this Act, whether as the

result of a mistake of fact or an error of law, except as

hereinafter provided, then the Department shall issue a credit

memorandum or refund to the person who made the erroneous

payment or, if that person has died or become a person under

legal disability, to his or her legal representative, as such.

If it is determined that the Department should issue a

credit or refund under this Act, the Department may first

apply the amount thereof against any amount of tax or penalty

or interest due hereunder from the person entitled to such

credit or refund. Any credit memorandum issued under the

Electricity Excise Tax Law may be applied against any

liability incurred under the tax previously imposed by Section

2 of this Act. For this purpose, if proceedings are pending to

determine whether or not any tax or penalty or interest is due

under this Act from such person, the Department may withhold

issuance of the credit or refund pending the final disposition

of such proceedings and may apply such credit or refund

against any amount found to be due to the Department as a

result of such proceedings. The balance, if any, of the credit

or refund shall be issued to the person entitled thereto.

If no tax or penalty or interest is due and no proceeding

is pending to determine whether such person is indebted to the

Department for tax or penalty or interest, the credit

memorandum or refund shall be issued to the claimant; or (in

the case of a credit memorandum) the credit memorandum may be

assigned and set over by the lawful holder thereof, subject to

reasonable rules of the Department, to any other person who is

subject to this Act, and the amount thereof shall be applied by

the Department against any tax or penalty or interest due or to

become due under this Act from such assignee.

As to any claim for credit or refund filed with the

Department on or after each January 1 and July 1, no amounts

erroneously paid more than 3 years prior to such January 1 and

July 1, respectively, shall be credited or refunded, except

that if both the Department and the taxpayer have agreed to an

extension of time to issue a notice of tax liability under this

Act, the claim may be filed at any time prior to the expiration

of the period agreed upon. Notwithstanding any other provision

of this Act to the contrary, for any period included in a claim

for credit or refund for which the statute of limitations for

issuing a notice of tax liability under this Act will expire

less than 6 months after the date a taxpayer files the claim

for credit or refund, the statute of limitations is

automatically extended for 6 months from the date it would

have otherwise expired.

Claims for credit or refund shall be filed upon forms

provided by the Department. As soon as practicable after any

claim for credit or refund is filed, the Department shall

examine the same and determine the amount of credit or refund

to which the claimant is entitled and shall notify the

claimant of such determination, which amount shall be prima

facie correct.

Any credit or refund that is allowed under this Act shall

bear interest at the rate and in the manner specified in the

Uniform Penalty and Interest Act.

In case the Department determines that the claimant is

entitled to a refund, such refund shall be made only from such

appropriation as may be available for that purpose. If it

appears unlikely that the amount appropriated would permit

everyone having a claim allowed during the period covered by

such appropriation to elect to receive a cash refund, the

Department, by rule or regulation, shall provide for the

payment of refunds in hardship cases and shall define what

types of cases qualify as hardship cases.

(Source: P.A. 90-491, eff. 1-1-98; 90-624, eff. 7-10-98.)

Section 65. The Water Company Invested Capital Tax Act is

amended by changing Section 6 as follows:

(35 ILCS 625/6) (from Ch. 120, par. 1416)

Sec. 6. If it appears, after claim therefor filed with the

Department, that an amount of tax or penalty or interest has

been paid which was not due under this Act, whether as the

result of a mistake of fact or an error of law, except as

hereinafter provided, then the Department shall issue a credit

memorandum or refund to the person who made the erroneous

payment or, if that person has died or become incompetent, to

his legal representative, as such.

If it is determined that the Department should issue a

credit or refund under this Act, the Department may first

apply the amount thereof against any amount of tax or penalty

or interest due hereunder from the person entitled to such

credit or refund. For this purpose, if proceedings are pending

to determine whether or not any tax or penalty or interest is

due under this Act from such person, the Department may

withhold issuance of the credit or refund pending the final

disposition of such proceedings and may apply such credit or

refund against any amount found to be due to the Department as

a result of such proceedings. The balance, if any, of the

credit or refund shall be issued to the person entitled

thereto.

If no tax or penalty or interest is due and no proceeding

is pending to determine whether such person is indebted to the

Department for tax or penalty or interest, the credit

memorandum or refund shall be issued to the claimant; or (in

the case of a credit memorandum) the credit memorandum may be

assigned and set over by the lawful holder thereof, subject to

reasonable rules of the Department, to any other person who is

subject to this Act, and the amount thereof shall be applied by

the Department against any tax or penalty or interest due or to

become due under this Act from such assignee.

As to any claim for credit or refund filed with the

Department on or after each January 1 and July 1, no amounts

erroneously paid more than 3 years prior to such January 1 and

July 1, respectively, shall be credited or refunded, except

that if both the Department and the taxpayer have agreed to an

extension of time to issue a notice of tax liability under this

Act, the claim may be filed at any time prior to the expiration

of the period agreed upon. Notwithstanding any other provision

of this Act to the contrary, for any period included in a claim

for credit or refund for which the statute of limitations for

issuing a notice of tax liability under this Act will expire

less than 6 months after the date a taxpayer files the claim

for credit or refund, the statute of limitations is

automatically extended for 6 months from the date it would

have otherwise expired.

Claims for credit or refund shall be filed upon forms

provided by the Department. As soon as practicable after any

claim for credit or refund is filed, the Department shall

examine the same and determine the amount of credit or refund

to which the claimant is entitled and shall notify the

claimant of such determination, which amount shall be prima

facie correct.

Any credit or refund that is allowed under this Section

shall bear interest at the rate and in the manner specified in

the Uniform Penalty and Interest Act.

In case the Department determines that the claimant is

entitled to a refund, such refund shall be made only from such

appropriation as may be available for that purpose. If it

appears unlikely that the amount appropriated would permit

everyone having a claim allowed during the period covered by

such appropriation to elect to receive a cash refund, the

Department, by rule or regulation, shall provide for the

payment of refunds in hardship cases and shall define what

types of cases qualify as hardship cases.

(Source: P.A. 90-491, eff. 1-1-98.)

Section 70. The Telecommunications Excise Tax Act is

amended by changing Section 10 as follows:

(35 ILCS 630/10) (from Ch. 120, par. 2010)

Sec. 10. If it shall appear that an amount of tax or

penalty or interest has been paid in error hereunder to the

Department by a taxpayer, as distinguished from the retailer,

whether such amount be paid through a mistake of fact or an

error of law, such taxpayer may file a claim for credit or

refund with the Department. If it shall appear that an amount

of tax or penalty or interest has been paid in error to the

Department hereunder by a retailer who is required or

authorized to collect and remit the tax imposed by this

Article, whether such amount be paid through a mistake of fact

or an error of law, such retailer may file a claim for credit

or refund with the Department, provided that no credit or

refund shall be allowed for any amount paid by any such

retailer unless it shall appear that he bore the burden of such

amount and did not shift the burden thereof to anyone else, or

unless it shall appear that he or she or his or her legal

representative has unconditionally repaid such amount to his

customer (1) who bore the burden thereof and has not shifted

such burden directly or indirectly in any manner whatsoever;

or (2) who, if he or she shifted such burden, has repaid

unconditionally such amount to his or her own customer; and

(3) who is not entitled to receive any reimbursement therefor

from any other source than from his retailer, nor to be

relieved of such burden in any other manner whatsoever.

If it is determined that the Department should issue a

credit or refund under this Article, the Department may first

apply the amount thereof against any amount of tax or penalty

or interest due hereunder from the person entitled to such

credit or refund. For this purpose, if proceedings are pending

to determine whether or not any tax or penalty or interest is

due under this Article from such person, the Department may

withhold issuance of the credit or refund pending the final

disposition of such proceedings and may apply such credit or

refund against any amount found to be due to the Department as

a result of such proceedings. The balance, if any, of the

credit or refund shall be issued to the person entitled

thereto.

If no tax or penalty or interest is due and no proceeding

is pending to determine whether such person is indebted to the

Department for tax or penalty or interest, the credit

memorandum or refund shall be issued to the claimant; or (in

the case of a credit memorandum) the credit memorandum may be

assigned and set over by the lawful holder thereof, subject to

reasonable rules of the Department, to any other person who is

subject to this Article, and the amount thereof shall be

applied by the Department against any tax or penalty or

interest due or to become due under this Article from such

assignee.

As to any claim for credit or refund filed with the

Department on or after each January 1 and July 1, no amounts

erroneously paid more than three years prior to such January 1

and July 1, respectively, shall be credited or refunded,

except that if both the Department and the taxpayer have

agreed to an extension of time to issue a notice of tax

liability under this Act, the claim may be filed at any time

prior to the expiration of the period agreed upon.

Notwithstanding any other provision of this Act to the

contrary, for any period included in a claim for credit or

refund for which the statute of limitations for issuing a

notice of tax liability under this Act will expire less than 6

months after the date a taxpayer files the claim for credit or

refund, the statute of limitations is automatically extended

for 6 months from the date it would have otherwise expired.

Claims for credit or refund shall be filed upon forms

provided by the Department. As soon as practicable after any

claim for credit or refund is filed, the Department shall

examine the same and determine the amount of credit or refund

to which the claimant is entitled and shall notify the

claimant of such determination, which amount shall be prima

facie correct.

A claim for credit or refund shall be considered to have

been filed with the Department on the date upon which it is

received by the Department. Upon receipt of any claim for

credit or refund filed under this Article, any officer or

employee of the Department, authorized in writing by the

Director of Revenue to acknowledge receipt of such claims on

behalf of the Department, shall execute on behalf of the

Department, and shall deliver or mail to the claimant or his

duly authorized agent, a written receipt, acknowledging that

the claim has been filed with the Department, describing the

claim in sufficient detail to identify it and stating the date

upon which the claim was received by the Department. Such

written receipt shall be prima facie evidence that the

Department received the claim described in such receipt and

shall be prima facie evidence of the date when such claim was

received by the Department. In the absence of such a written

receipt, the records of the Department as to when the claim was

received by the Department, or as to whether or not the claim

was received at all by the Department, shall be deemed to be

prima facie correct upon these questions in the event of any

dispute between the claimant (or his or her legal

representative) and the Department concerning these questions.

Any credit or refund that is allowed under this Article

shall bear interest at the rate and in the manner specified in

the Uniform Penalty and Interest Act.

In case the Department determines that the claimant is

entitled to a refund, such refund shall be made only from such

appropriation as may be available for that purpose. If it

appears unlikely that the amount appropriated would permit

everyone having a claim allowed during the period covered by

such appropriation to elect to receive a cash refund, the

Department by rule or regulation shall provide for the payment

of refunds in hardship cases and shall define what types of

cases qualify as hardship cases.

If a retailer who has failed to pay tax on gross charges

for telecommunications is required by the Department to pay

such tax, such retailer, without filing any formal claim with

the Department, shall be allowed to take credit against such

tax liability to the extent, if any, to which such retailer has

paid the tax to its vendor of the telecommunications which

such retailer purchased and used for resale, and no penalty or

interest shall be charged to such retailer on the amount of

such credit. However, when such credit is allowed to the

retailer by the Department, the vendor is precluded from

refunding any of the tax to the retailer and filing a claim for

credit or refund with respect thereto with the Department. The

provisions of this Section added by this amendatory Act of

1988 shall be applied retroactively, regardless of the date of

the transaction.

(Source: P.A. 90-491, eff. 1-1-98.)

Section 75. The Local Government Revenue Recapture Act is

amended by changing Sections 5-5, 5-10, 5-15, 5-20, 5-30,

5-35, 5-37, 10-15, 10-20, 10-30, 10-35, and 10-40 as follows:

(50 ILCS 355/5-5)

Sec. 5-5. Definitions. As used in this Article:

"Department" means the Department of Revenue.

"Family member" means the following, whether by whole

blood, half-blood, or adoption:

(1) a parent or step-parent;

(2) a child or step-child;

(3) a grandparent or step-grandparent;

(4) an aunt, uncle, great-aunt, or great-uncle;

(4.1) a niece, nephew, great-niece, or great-nephew;

(5) a sibling;

(6) a spouse or domestic partner; and

(7) the spouse or domestic partner of any person

referenced in items (1) through (5).

"Financial information" means the information provided to

the municipality or county by the Department under Section 11

of the Retailers' Occupation Tax Act that is reported to the

Department by a business located in a given municipality or

county.

"Person" means an individual, sole proprietorship,

corporation, registered limited liability partnership, limited

liability company, partnership, professional service

corporation, or any other form of organization.

"Misallocation" means tax paid by the taxpayer and

allocated to one unit of local government that should have

been allocated to a different unit of local government. This

includes misallocations discovered by a unit of local

government through the tax location verification process under

Section 8-11-16 of the Illinois Municipal Code and

misallocations discovered by the Department other than through

an audit of the taxpayer. "Misallocation" does not, however,

include any amount reported by a taxpayer in an amended return

or any amount discovered in an audit of the taxpayer by the

Department or discovered in an audit of the taxpayer by a

qualified practitioner under Article 10 of this Act.

"Misallocation" also does not include amounts overpaid by the

taxpayer and therefore not owed to any unit of local

government, nor amounts underpaid by the taxpayer and

therefore not previously allocated to any unit of local

government.

"Monitoring disbursements" means keeping track of payments

from the Department by a municipality, county, or third party

for the limited purpose of tracking previous misallocations.

"Third party" means a person, partnership, corporation, or

other entity or individual registered to do business in

Illinois who contracts with a municipality or county to review

financial information related to the disbursement of local

taxes by the Department to the municipality or county.

(Source: P.A. 101-628, eff. 6-1-20.)

(50 ILCS 355/5-10)

Sec. 5-10. Contracts with third parties. A municipality or

county that receives a disbursement of tax proceeds from the

Department may contract with a third party for the purpose of

ensuring that the municipality or county receives the correct

disbursement from the Department and monitoring disbursements.

The third party may not contact the Department on behalf of the

municipality or county, but instead must work directly with

the municipality or county to acquire financial information. A

third party may, however, directly access a municipality's or

county's financial information that is provided by the

Department by electronic means under Section 11 of the

Retailers' Occupation Tax Act, provided that the third party

meets all other conditions under this Section for the receipt

of financial information. To be eligible to receive financial

information from the municipality or county, the third party

must:

(1) enter into a confidentiality agreement with the

municipality or county in the form and manner required by

the Department prior to receiving the financial

information;

(2) have an existing contract with the municipality or

county at the time the third party enters into the

confidentiality agreement with the municipality or county;

a copy of that existing contract must be on file with the

Department;

(3) abide by the same conditions as the municipality

or county with respect to the furnishing of financial

information under Section 11 of the Retailers' Occupation

Tax Act; and

(4) be registered with the Department as required by

Section 5-35 of this Act.

(Source: P.A. 101-628, eff. 6-1-20.)

(50 ILCS 355/5-15)

Sec. 5-15. Financial information. The third party may use

the financial information it receives from the contracting

municipality or county only for the purpose of providing

services to the municipality or county as specified in this

Act and may not use the information for any other purpose.

Electronic data submitted to third parties or by the

contracting municipality or county must be accessible only to

third parties who have entered into a confidentiality

agreement with the municipality or county or who have an

existing contract with the municipality or county.

(Source: P.A. 101-628, eff. 6-1-20.)

(50 ILCS 355/5-20)

Sec. 5-20. Retention, collection, disclosure, and

destruction of financial information.

(a) A third party in possession of a taxpayer's financial

information must permanently destroy that financial

information pursuant to this Act. The financial information

shall be destroyed upon the soonest of the following to occur:

(1) if the taxpayer is not referred to the Department,

within 30 days after receipt of the taxpayer's financial

information from either the municipality or county, unless

the third party is monitoring disbursements from the

Department on an ongoing basis for a municipality or

county, in which case, the financial information shall be

destroyed no later than 3 years after receipt; or

(2) within 30 days after the Department receives a

taxpayer audit referral from a third party referring the

taxpayer to the Department for additional review.

(b) No third party in possession of financial information

may sell, lease, trade, market, or otherwise utilize or profit

from a taxpayer's financial information. The , except for a

fee as negotiated by the municipality or county may, however,

negotiate a fee with the third party. The fee may be in the

form of a contingency fee for a percentage of the amount of

additional distributions the municipality or county receives

for no more than 3 years following the first disbursement to

the municipality or county as a result of the services of the

third party under this Act.

(c) No third party may permanently or temporarily collect,

capture, purchase, use, receive through trade, or otherwise

retain a taxpayer's financial information beyond the scope of

subsection (a) of this Section.

(d) No third party in possession of confidential

information may disclose, redisclose, share, or otherwise

disseminate a taxpayer's financial information.

(e) A third party must dispose of the materials containing

financial information in a manner that renders the financial

information unreadable, unusable, and undecipherable. Proper

disposal methods include, but are not limited to, the

following:

(1) in the case of paper documents, burning,

pulverizing, or shredding so that the information cannot

practicably be read or reconstructed; and

(2) in the case of electronic media and other

non-paper media containing information, destroying or

erasing so that information cannot practicably be read,

reconstructed, or otherwise utilized by the third party or

others.

(Source: P.A. 101-628, eff. 6-1-20.)

(50 ILCS 355/5-30)

Sec. 5-30. Posting results. Annually, the third party

shall provide the municipality or county with a final summary

of the review for publication. It is the responsibility of the

third party to ensure that this summary includes no personal

or identifying information of taxpayers and that all such

taxpayer information is kept confidential. If the summary

includes any discussion of tax revenue, it shall include only

aggregate amounts by tax type, and shall in no way include

information about an individual return or an individual

taxpayer, even with identifying information redacted. No

aggregated data may be published that includes taxpayer

information for 4 or fewer taxpayers. In addition, due to the

preliminary nature of such a summary based only on unaudited

financial information, no claim of specific tax savings or

revenue generation may be made in the summary.

(Source: P.A. 101-628, eff. 6-1-20.)

(50 ILCS 355/5-35)

Sec. 5-35. Third party registration.

(a) Beginning on January 1, 2021, no person shall engage

in business as a third party pursuant to this Act in this State

without first having registered with the Department.

Application for registration or renewal of registration shall

be made to the Department, by electronic means, in a form and

at the time prescribed by the Department. Each applicant for

registration or renewal of registration under this Section

shall furnish to the Department, in an electronic format

established by the Department, the following information:

(1) the name and address of the applicant;

(2) the address of the location at which the applicant

proposes to engage in business as a third party in this

State;

(3) valid and updated contact information;

(4) attestation of good standing to do business in

Illinois;

(5) a copy of each contract it has entered into with a

municipality or county; if an applicant has a contract

with a municipality or county prior to the effective date

of this Act, a copy of all existing contracts must be

provided;

(6) an annual certification of process letter that:

(A) is signed by an attorney or certified public

accountant licensed and authorized to practice in the

State of Illinois;

(B) contains findings that, after due diligence,

the author is of the opinion that:

(i) the third party's confidentiality

standards for storing encrypted data at rest,

using a cryptographic algorithm, conform to

Security Level 1 of the Federal Information

Processing Standard (FIPS) Publication 140-2, or

conform to similar security requirements contained

in any successor publication;

(ii) the third party uses multi-factor

authentication;

(iii) the third party uses HTTPS with at least

TLS 1.2 or its successor to protect the data files

while in transit between a browser and server;

(iv) the third party adheres to best practices

as recommended by the Open Web Application

Security Project (OWASP);

(v) the third party has a firewall which

protects against unauthorized use of the data; and

(vi) the third party shall maintain a physical

location in this State at all times; if, at any

time, the third party fails to have a physical

location in this State, the third party's

registration shall be revoked; and

(7) such other additional information as the

Department may require by rule.

The annual registration fee payable to the Department for

each third party shall be $15,000. The fee shall be deposited

into the Tax Compliance and Administration Fund and shall be

used for the cost of administering the certified audit pilot

project under Article 10.

Each applicant shall pay the fee to the Department at the

time of submitting its application or renewal to the

Department. The Department may require an applicant under this

Section to electronically file and pay the fee.

(b) The following are ineligible to register as a third

party under this Act:

(1) a person who has been convicted of a felony

related to financial crimes under any federal or State

law, if the Department, after investigation and a hearing

if requested by the applicant, determines that the person

has not been sufficiently rehabilitated to warrant the

public trust, including an individual or any employee,

officer, manager, member, partner, or director of an

entity that has been convicted as provided in this

paragraph (1);

(2) a person, if any employee, contractual employee,

officer, manager, or director thereof, or any person or

persons owning in the aggregate more than 5% thereof, is

employed by or appointed or elected to the corporate

authorities of any municipality or county in this State;

(3) a person, if any employee, contractual employee,

officer, manager, or director thereof, or any person or

persons owning in the aggregate more than 5% thereof, is

not or would not be eligible to receive a certificate of

registration under this Act or a license under the

Illinois Public Accounting Act for any reason;

(4) a person who is a family member of any person who

is employed by or appointed or elected to the corporate

authorities of any municipality or county in the State;

(5) a person who is a qualified practitioner, as

defined by Section 10-15 of this Act;

(6) a third party owned, in whole or in part, by any

entity that competes directly or indirectly with any

taxpayer whose financial information they are seeking or

receiving; and

(7) a third party owning in whole or in part, directly

or indirectly, any entity that competes, directly or

indirectly, with any taxpayer whose financial information

they are seeking or receiving.

(c) The Department shall begin accepting applications no

later than January 1, 2021. Upon receipt of an application and

registration fee in proper form from a person who is eligible

to register as a third party under this Act, the Department

shall issue, within 60 days after receipt of an application, a

certificate of registration to such applicant in such form as

prescribed by the Department. That certificate of registration

shall permit the applicant to whom it is issued to engage in

business as a third party under this Act. All certificates of

registration issued by the Department under this Section shall

be valid for a period not to exceed one year after issuance

unless sooner revoked or suspended as provided in this Act. No

certificate of registration issued under this Section is

transferable or assignable. A person who obtains a certificate

of registration as a third party who ceases to do business as

specified in the certificate of registration, or who never

commenced business, or whose certificate of registration is

suspended or revoked, shall immediately surrender the

certificate of registration to the Department.

(d) Any person aggrieved by any decision of the Department

under this Section may, within 60 days after notice of the

decision, protest and request a hearing. Upon receiving a

request for a hearing, the Department shall give written

notice to the person requesting the hearing of the time and

place fixed for the hearing and shall hold a hearing and then

issue its final administrative decision in the matter to that

person within 60 days after the date of the hearing or at a

later date upon agreement of all of the parties. In the absence

of a protest and request for a hearing within 60 days, the

Department's decision shall become final without any further

determination being made or notice given.

(e) All final decisions by the Department under this

Section are subject to judicial review under the provisions of

the Administrative Review Law.

(Source: P.A. 101-628, eff. 6-1-20.)

(50 ILCS 355/5-37)

Sec. 5-37. Insurance policy requirement. A third party is

required to file and maintain in force an insurance policy

issued by an insurance company authorized to transact fidelity

and surety business in the State of Illinois. The insurance

policy shall be for coverage of potential legal claims,

including, but by not limited to, penalties set forth under

Section 5-60, embezzlement, dishonesty, fraud, omissions or

errors, or other financial wrongdoing in the course of

providing services. The policy shall be in the form prescribed

by the Department in the sum of $500,000. The policy shall be

continuous in form and run concurrently with the original and

each renewal certification period unless terminated by the

insurance company. An insurance company may terminate a policy

and avoid further liability by filing a 60-day notice of

termination with the Department and at the same time sending

the same notice to the licensee. A licensee that receives a

notice of termination must promptly notify each municipality

and county with whom it has a contract under this Act of the

notice of termination. A license shall be canceled on the

termination date of the policy unless a new policy is filed

with the Department and becomes effective at the termination

date of the prior policy. If a policy has been canceled under

this Section, the third party must file a new application and

will be considered a new applicant if it obtains a new policy.

(Source: P.A. 101-628, eff. 6-1-20.)

(50 ILCS 355/10-15)

Sec. 10-15. Definitions. As used in this Article:

"Audit" means an agreed-upon procedures engagement in

accordance with Statements on Standards for the Attestation

Engagements (AICPA Professional Standards, AT-C Section 315

(Compliance Attestation Attest)).

"Certification program" means an instructional curriculum,

examination, and process for certification, recertification,

and revocation of certification of certified public

accountants that is administered by the Department with the

assistance of the Illinois CPA Society and that is officially

approved by the Department to ensure that a certified public

accountant possesses the necessary skills and abilities to

successfully perform an attestation engagement for a

limited-scope tax compliance review in a certified audit

project under this Act.

"Department" means the Department of Revenue.

"Family member" means the following, whether by whole

blood, half-blood, or adoption:

(1) a parent or step-parent;

(2) a child or step-child;

(3) a grandparent or step-grandparent;

(4) an aunt, uncle, great-aunt, or great-uncle;

(4.1) a niece, nephew, great-niece, or great-nephew;

(5) a sibling;

(6) a spouse or domestic partner; and

(7) the spouse or domestic partner of any person

referenced in items (1) through (5).

"Misallocation" means tax paid by the taxpayer and

allocated to one unit of local government that should have

been allocated to a different unit of local government. This

includes misallocations discovered by a unit of local

government through the tax location verification process under

Section 8-11-16 of the Illinois Municipal Code and

misallocations discovered by the Department other than through

an audit of the taxpayer. "Misallocation" does not, however,

include any amount reported by a taxpayer in an amended return

or any amount discovered in an audit of the taxpayer by the

Department or discovered in an audit of the taxpayer by a

qualified practitioner under Article 10 of this Act.

"Misallocation" also does not include amounts overpaid by the

taxpayer and therefore not owed to any unit of local

government, nor amounts underpaid by the taxpayer and

therefore not previously allocated to any unit of local

government.

"Participating taxpayer" means any person subject to the

revenue laws administered by the Department who is the subject

of a tax compliance referral by a municipality, county, or

third party, who enters into an engagement with a qualified

practitioner for a limited-scope tax compliance review under

this Act, and who is approved by the Department under the local

government revenue recapture certified audit pilot project.

"Qualified practitioner" means a certified public

accountant who is licensed or registered to perform

accountancy activities in Illinois under Section 8.05 of the

Illinois Public Accounting Act and who has met all

requirements for the local government revenue recapture

certified audit training course, achieved the required score

on the certification test as approved by the Department, and

been certified by the Department. "Qualified practitioner"

does not include a third party, as defined by Section 5-5 of

this Act, or any employee, contractual employee, officer,

manager, or director thereof, any person or persons owning in

the aggregate more than 5% of such third party, or a person who

is a family member of any person who is employed by or is an

appointed or elected member of any corporate authorities, as

defined in the Illinois Municipal Code.

(Source: P.A. 101-628, eff. 6-1-20; revised 8-20-20.)

(50 ILCS 355/10-20)

Sec. 10-20. Local government revenue recapture certified

audit project.

(a) The Department shall initiate a certified audit pilot

project to further enhance tax compliance reviews performed by

qualified practitioners and to encourage taxpayers to hire

qualified practitioners at their own expense to review and

report on certain aspects of their sales tax and use tax

compliance in cases where the Department has notified the

taxpayer that it has received a tax compliance referral from a

municipality, county, or third party under this Act. The

nature of the certified audit work performed by qualified

practitioners shall be agreed-upon procedures of a Compliance

Attestation in which the Department is the specified user of

the resulting report. Qualified practitioners are prohibited

from using information obtained from audit manuals, training

materials, or any other materials provided by the Department

under this Act for any purpose other than to perform the tax

compliance reviews under the certified audit pilot program

under this Act.

The tax compliance reviews shall be limited in scope and

may include only: (i) whether the taxpayer is reporting

receipts in the proper jurisdiction; (ii) whether tangible

personal property asset purchases that were used or consumed

by the taxpayer were taxed properly; (iii) an evaluation of

sales reported as exempt from tax; (iv) whether the proper tax

rate was charged; (v) whether the tax was properly reported as

retailers' occupation tax or use tax; and (vi) any other

factor that impacts the Department's allocation of sales and

use tax revenues to the jurisdiction in which the taxpayer

reports sales or use tax.

(b) As an incentive for taxpayers to incur the costs of a

certified audit, the Department shall abate penalties due on

any tax liabilities revealed by a certified audit, except that

this authority to abate penalties shall not apply to any

liability for taxes that were collected by the participating

taxpayer but not remitted to the Department, nor shall the

Department have the authority to abate fraud penalties.

(c) The certified audit pilot project shall apply only to

taxpayers who have been notified that an audit referral has

been received by the Department under this Act and only to

occupation and use taxes administered and collected by the

Department.

(c-5) The Department shall charge a fee of $2,500 to each

participant in the certification program under this Article.

(d) The certified audit pilot project shall begin with

audit referrals received on and after January 1, 2021. Upon

obtaining proper certification, qualified practitioners may

initiate certified audits beginning January 1, 2021.

(Source: P.A. 101-628, eff. 6-1-20.)

(50 ILCS 355/10-30)

Sec. 10-30. Local government revenue recapture audit

referral.

(a) A third party shall not refer a taxpayer to the

Department for audit consideration unless the third party is

registered with the Department pursuant to Section 5-35.

(b) If, based on a review of the financial information

provided by the Department to a municipality or county, or

provided by a municipality or county to a registered third

party, the municipality or county discovers that a taxpayer

may have underpaid local retailers' or service occupation

taxes, then it may refer the matter to the Department for audit

consideration. The tax compliance referral may be made only by

the municipality, county, or third party and shall be made in

the form and manner required by the Department, including any

requirement that the referral be submitted electronically. The

tax compliance referral shall, at a minimum, include proof of

registration as a third party, a copy of a contract between the

third party and the county or municipality, the taxpayer's

name, Department account identification number, mailing

address, and business location, and the specific reason for

the tax compliance referral, including as much detail as

possible.

(c) The Department shall complete its evaluation of all

audit referrals under this Act within 90 60 days after receipt

of the referral and shall handle all audit referrals as

follows:

(1) the Department shall evaluate the referral to

determine whether it is sufficient to warrant further

action based on the information provided in the referral,

any other information the Department possesses, and audit

selection procedures of the Department;

(2) if the Department determines that the referral is

not actionable, then the Department shall notify the local

government that it has evaluated the referral and has

determined that no action is deemed necessary and provide

the local government with an explanation for that

decision, including, but not limited to an explanation

that (i) the Department has previously conducted an audit;

(ii) the Department is in the process of conducting an

investigation or other examination of the taxpayer's

records; (iii) the taxpayer has already been referred to

the Department and the Department determined an audit

referral is not actionable; (iv) the Department or a

qualified practitioner has previously conducted an audit

after referral under this Section 10-30; or (v) for just

cause;

(3) if the Department determines that the referral is

actionable, then it shall determine whether the taxpayer

is currently under audit or scheduled for audit by the

Department;

(A) if the taxpayer is not currently under audit

by the Department or scheduled for audit by the

Department, the Department shall determine whether it

will schedule the taxpayer for audit; and

(B) if the taxpayer is not under audit by the

Department or scheduled for audit by the Department

and the Department decides under subparagraph (A) not

to schedule the taxpayer for audit by the Department,

then the Department shall notify the taxpayer that the

Department has received an actionable audit referral

on the taxpayer and issue a notice to the taxpayer as

provided under subsection (d) of this Section.

(d) The notice to the taxpayer required by subparagraph

(B) of paragraph (3) of subsection (c) shall include, but not

be limited to, the following:

(1) that the taxpayer must either: (A) engage a

qualified practitioner, at the taxpayer's expense, to

complete a certified audit, limited in scope to the

taxpayer's Retailers' Occupation Tax, Use Tax, Service

Occupation Tax, or Service Use Tax liability, and the

taxpayer's liability for any local retailers' or service

occupation tax administered by the Department; or (B) be

subject to audit by the Department;

(2) that, as an incentive, for taxpayers who agree to

the limited-scope certified audit, the Department shall

abate penalties as provided in Section 10-20; and

(3) A statement that reads: "[INSERT THE NAME OF THE

ELECTED CHIEF EXECUTIVE OF THE CORPORATE AUTHORITY] has

contracted with [INSERT THIRD PARTY] to review your

Retailers' Occupation Tax, Use Tax, Service Occupation

Tax, Service Use Tax, and any local retailers' or service

occupation taxes reported to the Illinois Department of

Revenue ("Department"). [INSERT THE NAME OF THE ELECTED

CHIEF EXECUTIVE OF THE CORPORATE AUTHORITY] and [INSERT

THE THIRD PARTY] have selected and referred your business

to the Department for a certified audit of your Retailers'

Occupation Tax, Use Tax, Service Occupation Tax, Service

Use Tax, and any local retailers' or service occupation

taxes reported to the Department pursuant to the Local

Government Revenue Recapture Act. The purpose of the audit

is to verify that your business reported and submitted the

proper Retailers' Occupation Tax, Use Tax, Service

Occupation Tax, Service Use Tax, and any local retailers'

or service occupation taxes administered by the

Department. The Department is required to disclose your

confidential financial information to [INSERT THE NAME OF

THE ELECTED CHIEF EXECUTIVE OF THE CORPORATE AUTHORITY]

and [INSERT THE THIRD PARTY]. Additional information can

be accessed from the Department's website and publications

for a basic overview of your rights as a Taxpayer. If you

have questions regarding your business's referral to the

Department for audit, please contact [CORPORATE

AUTHORITY'S] mayor, village president, or any other person

serving as [CORPORATE AUTHORITY'S] chief executive officer

or chief financial officer. [INSERT THIRD PARTY] is

prohibited from discussing this matter with you directly

or indirectly in any manner regardless of who initiates

the contact. If [INSERT THIRD PARTY] contacts you, please

contact the Department.".

(e) Within 90 days after notice by the Department, the

taxpayer must respond by stating in writing whether it will or

will not arrange for the performance of a certified audit

under this Act. If the taxpayer states that it will arrange for

the performance of a certified audit, then it must do so within

60 days after responding to the Department or within 90 days

after notice by the Department, whichever comes first. If the

taxpayer states that it will not arrange for the performance

of a certified audit or if the taxpayer does not arrange for

the performance of a certified audit within 180 days after

notice by the Department, then the Department may schedule the

taxpayer for audit by the Department.

(f) The certified audit must not be a contingent-fee

engagement and must be completed in accordance with this

Article 10.

(Source: P.A. 101-628, eff. 6-1-20.)

(50 ILCS 355/10-35)

Sec. 10-35. Notification by qualified practitioner.

(a) A qualified practitioner hired by a taxpayer who

elects to perform a certified audit under Section 10-30 shall

notify the Department of an engagement to perform a certified

audit and shall provide the Department with the information

the Department deems necessary to identify the taxpayer, to

confirm that the taxpayer is not already under audit by the

Department, and to establish the basic nature of the

taxpayer's business and the taxpayer's potential exposure to

Illinois occupation and use tax laws. The information provided

in the notification shall be submitted in the form and manner

required by the Department and shall include the taxpayer's

name, federal employer identification number or social

security number, Department account identification number,

mailing address, and business location, and the specific

occupation and use taxes and period proposed to be covered by

the engagement for the certified audit. In addition, the

notice shall include the name, address, identification number,

contact person, and telephone number of the engaged firm. An

engagement for a qualified practitioner to perform a certified

audit under this Act shall not be authorized by the Department

unless the taxpayer received notice from the Department under

subparagraph (B) (b) of paragraph (3) of subsection (c) of

Section 10-30.

(b) If the taxpayer has received notice of an audit

referral from the Department and has not been issued a written

notice of intent to conduct an audit, the taxpayer shall be a

participating taxpayer and the Department shall so advise the

qualified practitioner in writing within 10 days after receipt

of the engagement notice. However, the Department may exclude

a taxpayer from a certified audit or may limit the taxes or

periods subject to the certified audit on the basis that: (i)

the Department has previously conducted an audit; (ii) the

Department is in the process of conducting an investigation or

other examination of the taxpayer's records; (iii) the

taxpayer has already been referred to the Department pursuant

to Section 10-30 and the Department determined an audit

referral is not actionable; (iv) the Department or a qualified

practitioner has previously conducted an audit under Section

10-30 of this Act; or (v) for just cause.

(c) Within 30 days after receipt of the notice of

qualification from the Department under subsection (b), the

qualified practitioner shall contact the Department and

submit, for review and agreement by the Department, a proposed

audit plan and procedures. The Department may extend the time

for submission of the plan and procedures for reasonable

cause. The qualified practitioner shall initiate action to

advise the Department that amendment or modification of the

plan and procedures is necessary if the qualified

practitioner's inspection reveals that the taxpayer's

circumstances or exposure to the revenue laws is substantially

different from those described in the engagement notice.

(Source: P.A. 101-628, eff. 6-1-20.)

(50 ILCS 355/10-40)

Sec. 10-40. Audit performance and review.

(a) Upon the Department's designation of the agreed-upon

procedures to be followed by a practitioner in a certified

audit, the qualified practitioner shall perform the engagement

and shall timely submit a completed report to the Department

in the form and manner required by the Department and

professional standards. The report shall affirm completion of

the agreed-upon procedures and shall provide any required

disclosures.

(b) The Department shall review the report of the

certified audit and shall accept it when it is determined to be

complete by the qualified practitioner. Once the report is

accepted by the Department, the Department shall issue a

notice of proposed assessment reflecting the determination of

any additional liability reflected in the report and shall

provide the taxpayer with all the normal payment, protest, and

appeal rights with respect to any the liability reflected in

the report, including the right to a review by the Informal

Conference Board. In cases in which the report indicates an

overpayment has been made, the taxpayer shall submit a

properly executed claim for credit or refund to the

Department. Otherwise, the certified audit report is a final

and conclusive determination with respect to the tax and

period covered. No additional assessment may be made by the

Department for the specific taxes and period referenced in the

report, except upon a showing of fraud or material

misrepresentation. This determination shall not prevent the

Department from collecting liabilities not covered by the

report or from conducting an audit or investigation and making

an assessment for additional tax, penalty, or interest for any

tax or period not covered by the report.

(c) Any A notice of proposed assessment issued by the

Department under this Act is subject to the statute of

limitations for assessments under the Retailers' Occupation

Tax Act, the Use Tax Act, the Service Occupation Tax Act, the

Service Use Tax Act, and any local retailers' or service

occupation tax, as appropriate, and local taxes collected on

assessments issued shall be allocated to units of local

government for the full period of the statute of limitations

in accordance with those Acts and any applicable local

retailers' or service occupation tax Act. The Department shall

provide notice in writing to the municipality or county and

the third party, if applicable, of any audit findings,

determinations, or collections once finalized, but limited to

the amount of additional liability, if any, for distribution

to the municipality or county as part of the municipality's or

county's share of the State Retailers' Occupation Tax or

Service Occupation Tax or under the municipality's or county's

locally imposed retailer's or service occupation tax.

Claims for credit or refund filed by taxpayers under this

Act are subject to the statute of limitations under the

Retailers' Occupation Tax Act, the Use Tax Act, the Service

Occupation Tax Act, the Service Use Tax Act, and any local

retailers' or service occupation tax Act, as appropriate, and

any credit or refund of local taxes allowed to the taxpayer

shall be de-allocated from units of local government for the

full period of the statute of limitations in accordance with

those Acts and any applicable local retailers' or service

occupation tax Act.

If a reallocation of tax from one unit of local government

to another occurs as a result of an amended return filed by a

taxpayer or an audit of a taxpayer, the Department shall make

the reallocation for the full period of the statute of

limitations under the Retailers' Occupation Tax Act, the Use

Tax Act, the Service Occupation Tax Act, the Service Use Tax

Act, and any applicable local retailer's or service occupation

tax Act.

With respect to misallocations discovered under this Act,

the Department shall increase or decrease the amount allocated

to a unit of local government by an amount necessary to offset

any misallocation of previous disbursements. The offset amount

shall be the amount erroneously disbursed within the previous

6 months from the time a misallocation is discovered.

(d) Under no circumstances may a person, including a

municipality or county or third party, other than the person

audited and his or her attorney, have any right to participate

in an appeal or other proceeding regarding the audit,

participate in settlement negotiations, challenge the validity

of any settlement between the Department and any person, or

review any materials, other than financial information as

otherwise provided in this Act, that are subject to the

confidentiality provisions of the underlying tax Act. In

addition, the Department's determination of whether to audit a

taxpayer or the result of the audit creates no justiciable

cause of action, and any adjudication related to this program

is limited to the taxpayer's rights in an administrative

hearing held by the Department, an administrative hearing held

by the Illinois Independent Tax Tribunal, or related to

payments made under protest as provided in Section 2a.1 of the

State Officers and Employees Money Disposition Act, as

appropriate.

(Source: P.A. 101-628, eff. 6-1-20.)

Section 80. The Liquor Control Act of 1934 is amended by

changing Section 8-3 as follows:

(235 ILCS 5/8-3) (from Ch. 43, par. 159a)

Sec. 8-3. If it appears, after claim therefor filed with

the Department, that an amount of tax or penalty or interest

has been paid which was not due under this Article, whether as

the result of a mistake of fact or an error of law, except as

hereinafter provided, then the Department shall issue a credit

memorandum or refund to the person who made the erroneous

payment or, if that person died or became a person under legal

disability, to his or her legal representative, as such.

If it is determined that the Department should issue a

credit or refund under this Article, the Department may first

apply the amount thereof against any amount of tax or penalty

or interest due hereunder from the person entitled to such

credit or refund. For this purpose, if proceedings are pending

to determine whether or not any tax or penalty or interest is

due under this Article from such person, the Department may

withhold issuance of the credit or refund pending the final

disposition of such proceedings and may apply such credit or

refund against any amount found to be due to the Department as

a result of such proceedings. The balance, if any, of the

credit or refund shall be issued to the person entitled

thereto.

If no tax or penalty or interest is due and no proceeding

is pending to determine whether such taxpayer is indebted to

the Department for tax or penalty or interest the credit

memorandum or refund shall be issued to the claimant; or (in

the case of a credit memorandum) the credit memorandum may be

assigned and set over by the lawful holder thereof, subject to

reasonable rules of the Department, to any other person who is

subject to this Article, and the amount thereof shall be

applied by the Department against any tax or penalty or

interest due or to become due under this Article from such

assignee.

As to any claim filed hereunder with the Department on and

after each January 1 and July 1, no amount of tax or penalty or

interest, erroneously paid (either in total or partial

liquidation of a tax or penalty or interest under this

Article) more than 3 years prior to such January 1 and July 1,

respectively, shall be credited or refunded. Notwithstanding

any other provision of this Act to the contrary, for any period

included in a claim for credit or refund for which the statute

of limitations for issuing a notice of tax liability under

this Act will expire less than 6 months after the date a

taxpayer files the claim for credit or refund, the statute of

limitations is automatically extended for 6 months from the

date it would have otherwise expired.

Any credit or refund that is allowed under this Act shall

bear interest at the rate and in the manner specified in the

Uniform Penalty and Interest Act.

In case the Department determines that the claimant is

entitled to a refund, such refund shall be made only from such

appropriation as may be available for that purpose. If it

appears unlikely that the amount appropriated would permit

everyone having a claim allowed during the period covered by

such appropriation to elect to receive a cash refund, the

Department, by rule or regulation, shall provide for the

payment of refunds in hardship cases and shall define what

types of cases qualify as hardship cases.

(Source: P.A. 87-205.)