Bill Text: IL SB2502 | 2017-2018 | 100th General Assembly | Introduced

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Bill Title: Amends the Use Tax Act and the Service Use Tax Act. Provides that retailers and servicemen that do not collect the taxes under those Acts shall make the following reports and notifications: (1) a notification with each purchase made to an Illinois purchaser that use tax is due on certain purchases at retail made from the retailer and that the State requires the purchaser to file a use tax return; and (2) an annual notification to each Illinois purchaser detailing the total amount paid by the purchaser for Illinois purchases at retail during the previous calendar year. Provides that, if a purchaser has otherwise failed to file a return with the Department of Revenue and remit the proper amount of tax due, and if the purchaser receives a notification from a retailer under the provisions of the amendatory Act, then that purchaser must file a return and pay the tax by April 15 of the year in which the notification is received. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2019-01-09 - Session Sine Die [SB2502 Detail]

Download: Illinois-2017-SB2502-Introduced.html

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100TH GENERAL ASSEMBLY State of Illinois 2017 and 2018 SB2502 Introduced 2/6/2018, by Sen. Jennifer Bertino-Tarrant SYNOPSIS AS INTRODUCED:
35 ILCS 105/3-45.5 new
35 ILCS 105/10 from Ch. 120, par. 439.10
35 ILCS 110/3-40.5 new
35 ILCS 110/10 from Ch. 120, par. 439.40
Amends the Use Tax Act and the Service Use Tax Act. Provides that retailers and servicemen that do not collect the taxes under those Acts shall make the following reports and notifications: (1) a notification with each purchase made to an Illinois purchaser that use tax is due on certain purchases at retail made from the retailer and that the State requires the purchaser to file a use tax return; and (2) an annual notification to each Illinois purchaser detailing the total amount paid by the purchaser for Illinois purchases at retail during the previous calendar year. Provides that, if a purchaser has otherwise failed to file a return with the Department of Revenue and remit the proper amount of tax due, and if the purchaser receives a notification from a retailer under the provisions of the amendatory Act, then that purchaser must file a return and pay the tax by April 15 of the year in which the notification is received. Effective immediately.
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A BILL FOR
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AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Use Tax Act is amended by changing Section
10 and by adding Section 3-45.5 as follows:
(35 ILCS 105/3-45.5 new)
Sec. 3-45.5. Notice and reporting requirements for
non-collecting retailers.
(a) Each retailer that does not collect the tax under this
Act shall, at the time of purchase, notify Illinois purchasers
that use tax is due on certain purchases at retail made from
the retailer and that the State requires the purchaser to file
a use tax return.
(b) Each retailer that does not collect the tax under this
Act shall send notification to all Illinois purchasers by
January 31 of each year showing such information as the
Department shall require by rule and including the total amount
paid by the purchaser for Illinois purchases at retail made
from the retailer in the previous calendar year. Such
notification shall include, if available, the dates of
purchases at retail, the amounts of each purchase at retail,
and the category of the purchase at retail, including, if known
by the retailer, whether the purchase at retail is exempt or

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not exempt from taxation. The notification shall inform the
purchaser that the State requires a use tax return to be filed
and use tax paid on certain Illinois purchases at retail made
by the purchaser from the retailer, as provided in Section 10
of this Act.
The Director of Revenue may require any retailer that does
not collect the tax under this Act and makes total Illinois
sales of more than $100,000 in a calendar year to file the
annual statement described in this subsection (c) by magnetic
media or another machine-readable form for that year.
(c) Failure to send the notification required in subsection
(a) shall subject the retailer to a penalty of $5 for each such
failure unless the retailer shows reasonable cause for the
failure. Failure to send the notification required in
subsection (b) shall subject the retailer to a penalty of $10
for each such failure unless the retailer shows reasonable
cause for the failure.
(d) Retailers that do not collect the tax under this Act
but made less than $100,000 in total gross sales in Illinois in
the previous calendar year, and who reasonably expect gross
sales in the current calendar year to be less than $100,000,
are exempt from the notice.
(e) As used in this Section, "Illinois purchaser" means a
person who purchases tangible personal property from a retailer
and provides either a billing address or a delivery address in
the State of Illinois.

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(35 ILCS 105/10) (from Ch. 120, par. 439.10)
Sec. 10. Except as to motor vehicles, aircraft, watercraft,
and trailers, and except as to cigarettes as defined in the
Cigarette Use Tax Act, when tangible personal property is
purchased from a retailer for use in this State by a purchaser
who did not pay the tax imposed by this Act to the retailer,
and who does not file returns with the Department as a retailer
under Section 9 of this Act, such purchaser (by the last day of
the month following the calendar month in which such purchaser
makes any payment upon the selling price of such property)
shall, except as otherwise provided in this Section, file a
return with the Department and pay the tax upon that portion of
the selling price so paid by the purchaser during the preceding
calendar month. Such return shall be filed on a form prescribed
by the Department and shall contain such information as the
Department may reasonably require. Such return and payment from
the purchaser shall be submitted to the Department sooner than
the last day of the month after the month in which the purchase
is made to the extent that that may be necessary in order to
secure the title to a motor vehicle or the certificate of
registration for an aircraft. However, except as to motor
vehicles and aircraft, and except as to cigarettes as defined
in the Cigarette Use Tax Act, if the purchaser's annual use tax
liability does not exceed $600, the purchaser may file the
return on an annual basis on or before April 15th of the year

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following the year use tax liability was incurred. Individual
purchasers with an annual use tax liability that does not
exceed $600 may, in lieu of the filing and payment requirements
in this Section, file and pay in compliance with Section 502.1
of the Illinois Income Tax Act.
If a purchaser has otherwise failed to file a return with
the Department and remit the proper amount of tax due as
required under this Act, and if the purchaser receives a
notification from a retailer under Section 3-45.5 of this Act,
then that purchaser, on or before April 15 of the year in which
the notification is received, must file a return and pay the
tax upon those portions of the selling prices so paid by the
purchaser, plus late fees, as determined by the Department, for
the failure to file a return with the Department and remit the
proper amount of tax due by the applicable deadline as
determined by this Act. Failure to file a return and pay taxes
in the manner described in this paragraph will result in
additional late fees as determined by the Department.
If cigarettes, as defined in the Cigarette Use Tax Act, are
purchased from a retailer for use in this State by a purchaser
who did not pay the tax imposed by this Act to the retailer,
and who does not file returns with the Department as a retailer
under Section 9 of this Act, such purchaser must, within 30
days after acquiring the cigarettes, file a return with the
Department and pay the tax upon that portion of the selling
price so paid by the purchaser for the cigarettes.

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In addition with respect to motor vehicles, aircraft,
watercraft, and trailers, a purchaser of such tangible personal
property for use in this State, who purchases such tangible
personal property from an out-of-state retailer, shall file
with the Department, upon a form to be prescribed and supplied
by the Department, a return for each such item of tangible
personal property purchased, except that if, in the same
transaction, (i) a purchaser of motor vehicles, aircraft,
watercraft, or trailers who is a retailer of motor vehicles,
aircraft, watercraft, or trailers purchases more than one motor
vehicle, aircraft, watercraft, or trailer for the purpose of
resale or (ii) a purchaser of motor vehicles, aircraft,
watercraft, or trailers purchases more than one motor vehicle,
aircraft, watercraft, or trailer for use as qualifying rolling
stock as provided in Section 3-55 of this Act, then the
purchaser may report the purchase of all motor vehicles,
aircraft, watercraft, or trailers involved in that transaction
to the Department on a single return prescribed by the
Department. Such return in the case of motor vehicles and
aircraft must show the name and address of the seller, the
name, address of purchaser, the amount of the selling price
including the amount allowed by the retailer for traded in
property, if any; the amount allowed by the retailer for the
traded-in tangible personal property, if any, to the extent to
which Section 2 of this Act allows an exemption for the value
of traded-in property; the balance payable after deducting such

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trade-in allowance from the total selling price; the amount of
tax due from the purchaser with respect to such transaction;
the amount of tax collected from the purchaser by the retailer
on such transaction (or satisfactory evidence that such tax is
not due in that particular instance if that is claimed to be
the fact); the place and date of the sale, a sufficient
identification of the property sold, and such other information
as the Department may reasonably require.
Such return shall be filed not later than 30 days after
such motor vehicle or aircraft is brought into this State for
use.
For purposes of this Section, "watercraft" means a Class 2,
Class 3, or Class 4 watercraft as defined in Section 3-2 of the
Boat Registration and Safety Act, a personal watercraft, or any
boat equipped with an inboard motor.
The return and tax remittance or proof of exemption from
the tax that is imposed by this Act may be transmitted to the
Department by way of the State agency with which, or State
officer with whom, the tangible personal property must be
titled or registered (if titling or registration is required)
if the Department and such agency or State officer determine
that this procedure will expedite the processing of
applications for title or registration.
With each such return, the purchaser shall remit the proper
amount of tax due (or shall submit satisfactory evidence that
the sale is not taxable if that is the case), to the Department

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or its agents, whereupon the Department shall issue, in the
purchaser's name, a tax receipt (or a certificate of exemption
if the Department is satisfied that the particular sale is tax
exempt) which such purchaser may submit to the agency with
which, or State officer with whom, he must title or register
the tangible personal property that is involved (if titling or
registration is required) in support of such purchaser's
application for an Illinois certificate or other evidence of
title or registration to such tangible personal property.
When a purchaser pays a tax imposed by this Act directly to
the Department, the Department (upon request therefor from such
purchaser) shall issue an appropriate receipt to such purchaser
showing that he has paid such tax to the Department. Such
receipt shall be sufficient to relieve the purchaser from
further liability for the tax to which such receipt may refer.
A user who is liable to pay use tax directly to the
Department only occasionally and not on a frequently recurring
basis, and who is not required to file returns with the
Department as a retailer under Section 9 of this Act, or under
the "Retailers' Occupation Tax Act", or as a registrant with
the Department under the "Service Occupation Tax Act" or the
"Service Use Tax Act", need not register with the Department.
However, if such a user has a frequently recurring direct use
tax liability to pay to the Department, such user shall be
required to register with the Department on forms prescribed by
the Department and to obtain and display a certificate of

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registration from the Department. In that event, all of the
provisions of Section 9 of this Act concerning the filing of
regular monthly, quarterly or annual tax returns and all of the
provisions of Section 2a of the "Retailers' Occupation Tax Act"
concerning the requirements for registrants to post bond or
other security with the Department, as the provisions of such
sections now exist or may hereafter be amended, shall apply to
such users to the same extent as if such provisions were
included herein.
(Source: P.A. 100-321, eff. 8-24-17.)
Section 10. The Service Use Tax Act is amended by changing
Section 10 and by adding Section 3-40.5 as follows:
(35 ILCS 110/3-40.5 new)
Sec. 3-40.5. Notice and reporting requirements for
non-collecting servicemen.
(a) Each serviceman that does not collect the tax under
this Act shall, at the time of purchase, notify Illinois
purchasers that use tax is due on certain purchases at retail
made from the retailer and that the State requires the
purchaser to file a use tax return.
(b) Each serviceman that does not collect the tax under
this Act shall send notification to all Illinois purchasers by
January 31 of each year showing such information as the
Department shall require by rule and including the total amount

SB2502 - 9 - LRB100 14948 HLH 32495 b
paid by the purchaser for Illinois purchases at retail made
from the serviceman in the previous calendar year. Such
notification shall include, if available, the dates of
purchases at retail, the amounts of each purchase at retail,
and the category of the purchase at retail, including, if known
by the serviceman, whether the purchase at retail is exempt or
not exempt from taxation. The notification shall inform the
purchaser that the State requires a use tax return to be filed
and use tax paid on certain Illinois purchases at retail made
by the purchaser from the serviceman, as provided in Section 10
of this Act.
The notification specified in this subsection (b) shall be
sent separately to all Illinois purchasers by first-class mail
and shall not be included with any other shipments. The
notification shall include the words "Important Tax Document
Enclosed" on the exterior of the mailing. The notification
shall include the name of the serviceman.
(c) Failure to send the notification required in subsection
(a) shall subject the serviceman to a penalty of $5 for each
such failure unless the serviceman shows reasonable cause for
the failure. Failure to send the notification required in
subsection (b) shall subject the serviceman to a penalty of $10
for each such failure unless the serviceman shows reasonable
cause for the failure.
(d) Servicemen that do not collect the tax under this Act
but made less than $100,000 in total gross sales in Illinois in

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the previous calendar year, and who reasonably expect gross
sales in the current calendar year to be less than $100,000,
are exempt from the notice.
(e) As used in this Section, "Illinois purchaser" means a
person who purchases tangible personal property from a
serviceman and provides either a billing address or a delivery
address in the State of Illinois.
(35 ILCS 110/10) (from Ch. 120, par. 439.40)
Sec. 10. Where property is acquired as an incident to the
purchase of a service from a serviceman for use in this State
by a purchaser who did not pay the tax herein imposed to the
serviceman, and who does not file returns with the Department
as a serviceman under Section 9 of this Act, such purchaser (by
the last day of the month following the calendar month in which
such purchaser makes any payment upon the selling price of such
property) shall, except as hereinafter provided in this
Section, file a return with the Department and pay the tax upon
that portion of the selling price so paid by the purchaser
during the preceding calendar month. Such return shall be filed
on a form prescribed by the Department and shall contain such
information as the Department may reasonably require.
When a purchaser pays a tax herein imposed directly to the
Department, the Department (upon request therefor from such
purchaser) shall issue an appropriate receipt to such purchaser
showing that he has paid such tax to the Department. Such

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receipt shall be sufficient to relieve the purchaser from
further liability from the tax to which such receipt may refer.
A user who is liable to pay Service Use Tax directly to the
Department only occasionally and not on a frequently recurring
basis, and who is not required to file returns within the
Department as a serviceman under Section 9 of this Act, or as a
serviceman under the "Service Occupation Tax Act", or as a
retailer or user under the "Use Tax Act", or as a retailer
under the "Retailers' Occupation Tax Act", need not register
with the Department. However, if such a user has a frequently
recurring direct Service Use Tax liability to pay to the
Department, such user shall be required to register with the
Department on forms prescribed by the Department and to obtain
and display a certificate of registration from the Department.
In that event, all of the provisions of Section 9 of this Act
concerning the filing of regular monthly, quarterly or annual
tax returns and all of the provisions of Section 2a of the
"Retailers' Occupation Tax Act" concerning the requirements
for registrants to post bond or other security with the
Department, as the provisions of such sections now exist or may
hereafter be amended, shall apply to such users to the same
extent as if such provisions were included herein.
If a purchaser has otherwise failed to file a return with
the Department and remit the proper amount of tax due as
required under this Act, and if the purchaser receives a
notification from a serviceman under Section 3-40.5 of this

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Act, then that purchaser, on or before April 15 of the year in
which the notification is received, must file a return and pay
the tax upon those portions of the selling prices so paid by
the purchaser, plus late fees, as determined by the Department,
for the failure to file a return with the Department and remit
the proper amount of tax due by the applicable deadline as
determined by this Act. Failure to file a return and pay taxes
in the manner described in this paragraph will result in
additional late fees as determined by the Department.
(Source: P.A. 91-51, eff. 6-30-99.)
Section 99. Effective date. This Act takes effect upon
becoming law.