Bill Text: IL SB3278 | 2013-2014 | 98th General Assembly | Introduced
Bill Title: Amends the Use Tax Act and the Service Use Tax Act. Extends the Manufacturer's Purchase Credit until August 30, 2019 (now, August 30, 2014). Effective immediately.
Spectrum: Slight Partisan Bill (Republican 2-1)
Status: (Failed) 2015-01-13 - Session Sine Die [SB3278 Detail]
Download: Illinois-2013-SB3278-Introduced.html
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1 | AN ACT concerning revenue.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Use Tax Act is amended by changing Section | ||||||||||||||||||||||||||
5 | 3-85 as follows:
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6 | (35 ILCS 105/3-85)
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7 | Sec. 3-85. Manufacturer's Purchase Credit. For purchases | ||||||||||||||||||||||||||
8 | of machinery and
equipment made on and after January 1, 1995 | ||||||||||||||||||||||||||
9 | through June 30, 2003, and on and after September 1, 2004 | ||||||||||||||||||||||||||
10 | through August 30, 2019 August 30, 2014 ,
a
purchaser of | ||||||||||||||||||||||||||
11 | manufacturing
machinery and equipment that qualifies for the | ||||||||||||||||||||||||||
12 | exemption provided by
paragraph (18) of Section 3-5 of this Act | ||||||||||||||||||||||||||
13 | earns a credit in an amount equal to
a fixed percentage of the | ||||||||||||||||||||||||||
14 | tax which would have been incurred under this Act on
those | ||||||||||||||||||||||||||
15 | purchases.
For purchases of graphic arts machinery and | ||||||||||||||||||||||||||
16 | equipment made on or after July
1, 1996 and through June 30, | ||||||||||||||||||||||||||
17 | 2003, and on and after September 1, 2004 through August 30, | ||||||||||||||||||||||||||
18 | 2019 August 30, 2014 , a purchaser of graphic arts machinery
and | ||||||||||||||||||||||||||
19 | equipment that qualifies for
the exemption provided by | ||||||||||||||||||||||||||
20 | paragraph (6) of Section 3-5 of this Act earns a
credit in an | ||||||||||||||||||||||||||
21 | amount equal to a fixed percentage of the tax that would have | ||||||||||||||||||||||||||
22 | been
incurred under this Act on those purchases.
The credit | ||||||||||||||||||||||||||
23 | earned for purchases of manufacturing machinery and equipment |
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| |||||||
1 | or
graphic arts machinery and equipment shall be referred to as | ||||||
2 | the
Manufacturer's Purchase
Credit.
A graphic arts producer is | ||||||
3 | a person engaged in graphic arts production as
defined in | ||||||
4 | Section 2-30 of the Retailers' Occupation Tax Act. Beginning | ||||||
5 | July
1, 1996, all references in this Section to manufacturers | ||||||
6 | or manufacturing shall
also be deemed to refer to graphic arts | ||||||
7 | producers or graphic arts production.
| ||||||
8 | The amount of credit shall be a percentage of the tax that | ||||||
9 | would have
been incurred on the purchase of manufacturing | ||||||
10 | machinery and equipment
or graphic arts machinery and equipment
| ||||||
11 | if the exemptions provided by paragraph (6) or paragraph
(18) | ||||||
12 | of Section 3-5
of this Act had not been applicable. The | ||||||
13 | percentage shall be as follows:
| ||||||
14 | (1) 15% for purchases made on or before June 30, 1995.
| ||||||
15 | (2) 25% for purchases made after June 30, 1995, and on | ||||||
16 | or before June 30,
1996.
| ||||||
17 | (3) 40% for purchases made after June 30, 1996, and on | ||||||
18 | or before June 30,
1997.
| ||||||
19 | (4) 50% for purchases made on or after July 1, 1997.
| ||||||
20 | (a) Manufacturer's Purchase Credit earned prior to July 1, | ||||||
21 | 2003. This subsection (a) applies to Manufacturer's Purchase | ||||||
22 | Credit earned prior to July 1, 2003. A purchaser of production | ||||||
23 | related tangible personal property desiring to use
the | ||||||
24 | Manufacturer's Purchase Credit shall certify to the seller | ||||||
25 | prior to
October 1, 2003 that the
purchaser is satisfying all | ||||||
26 | or part of the liability under the Use Tax Act or
the Service |
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| |||||||
1 | Use Tax Act that is due on the
purchase of the production | ||||||
2 | related tangible personal property by use of
Manufacturer's | ||||||
3 | Purchase Credit. The Manufacturer's Purchase Credit
| ||||||
4 | certification must be dated and shall include the name and | ||||||
5 | address of the
purchaser, the purchaser's registration number, | ||||||
6 | if registered, the credit being
applied, and a statement that | ||||||
7 | the State Use Tax or Service Use Tax liability is
being | ||||||
8 | satisfied with the manufacturer's or graphic arts producer's
| ||||||
9 | accumulated purchase credit.
Certification may be incorporated | ||||||
10 | into the manufacturer's or graphic arts
producer's purchase | ||||||
11 | order.
Manufacturer's Purchase Credit certification provided | ||||||
12 | by the manufacturer
or graphic
arts producer prior to October | ||||||
13 | 1, 2003 may be used to
satisfy the retailer's or serviceman's | ||||||
14 | liability under the Retailers'
Occupation Tax Act or Service | ||||||
15 | Occupation Tax Act for the credit claimed, not to
exceed 6.25% | ||||||
16 | of the receipts subject to tax from a qualifying purchase, but
| ||||||
17 | only if the retailer or serviceman reports the Manufacturer's | ||||||
18 | Purchase Credit
claimed as required by the Department. A | ||||||
19 | Manufacturer's Purchase Credit
reported on any original or | ||||||
20 | amended return
filed under
this Act after October 20, 2003 | ||||||
21 | shall be disallowed. The Manufacturer's
Purchase Credit
earned | ||||||
22 | by purchase of exempt manufacturing machinery and equipment
or | ||||||
23 | graphic arts machinery and equipment is a non-transferable | ||||||
24 | credit. A
manufacturer or graphic arts producer that enters | ||||||
25 | into a
contract involving the installation of tangible personal | ||||||
26 | property
into real estate within a manufacturing or graphic |
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| |||||||
1 | arts production facility
may, prior to October 1, 2003, | ||||||
2 | authorize a construction contractor
to utilize credit | ||||||
3 | accumulated by the manufacturer or graphic arts producer
to
| ||||||
4 | purchase the tangible personal property. A manufacturer or | ||||||
5 | graphic arts
producer
intending to use accumulated credit to | ||||||
6 | purchase such tangible personal
property shall execute a | ||||||
7 | written contract authorizing the contractor to utilize
a | ||||||
8 | specified dollar amount of credit. The contractor shall | ||||||
9 | furnish, prior to
October 1, 2003, the supplier
with the | ||||||
10 | manufacturer's or graphic arts producer's name, registration | ||||||
11 | or
resale
number, and a statement that a specific amount of the | ||||||
12 | Use Tax or Service Use
Tax liability, not to exceed 6.25% of | ||||||
13 | the selling price, is being satisfied
with the credit. The | ||||||
14 | manufacturer or graphic arts producer shall remain
liable to | ||||||
15 | timely report all
information required by the annual Report of | ||||||
16 | Manufacturer's Purchase Credit
Used for all credit utilized by | ||||||
17 | a construction contractor.
| ||||||
18 | No Manufacturer's Purchase Credit earned prior to July 1, | ||||||
19 | 2003 may be used after October 1, 2003. The Manufacturer's | ||||||
20 | Purchase Credit may be used to satisfy liability under the
Use | ||||||
21 | Tax Act or the Service Use Tax Act due on the purchase of | ||||||
22 | production
related tangible personal property (including | ||||||
23 | purchases by a manufacturer, by
a graphic arts producer, or by
| ||||||
24 | a lessor who rents or leases the use of the property to a | ||||||
25 | manufacturer or
graphic arts producer)
that does not otherwise | ||||||
26 | qualify
for the manufacturing machinery and equipment
|
| |||||||
| |||||||
1 | exemption or the graphic arts machinery and equipment | ||||||
2 | exemption.
"Production related
tangible personal property" | ||||||
3 | means (i) all tangible personal property used or
consumed by | ||||||
4 | the purchaser in a manufacturing facility in which a | ||||||
5 | manufacturing
process described in Section 2-45 of the | ||||||
6 | Retailers' Occupation Tax Act takes
place, including tangible | ||||||
7 | personal property purchased for incorporation into
real estate | ||||||
8 | within a manufacturing facility
and including, but not limited | ||||||
9 | to, tangible
personal property used or consumed in activities | ||||||
10 | such as preproduction material
handling, receiving, quality | ||||||
11 | control, inventory control, storage, staging, and
packaging | ||||||
12 | for shipping and transportation purposes; (ii) all tangible
| ||||||
13 | personal property used or consumed by the purchaser in a | ||||||
14 | graphic arts facility
in which graphic arts production as | ||||||
15 | described in Section 2-30 of the Retailers'
Occupation Tax Act | ||||||
16 | takes place, including tangible personal property purchased
| ||||||
17 | for incorporation into real estate within a graphic arts | ||||||
18 | facility and
including, but not limited to, all tangible | ||||||
19 | personal property used or consumed
in activities such as | ||||||
20 | graphic arts preliminary or pre-press production,
| ||||||
21 | pre-production material handling, receiving, quality control, | ||||||
22 | inventory
control, storage, staging, sorting, labeling, | ||||||
23 | mailing, tying, wrapping, and
packaging; and (iii) all tangible
| ||||||
24 | personal property used or consumed by the purchaser
for | ||||||
25 | research and development.
"Production related tangible | ||||||
26 | personal property" does not include (i) tangible
personal |
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| |||||||
1 | property used, within or without a manufacturing facility, in | ||||||
2 | sales,
purchasing, accounting, fiscal management, marketing, | ||||||
3 | personnel recruitment or
selection, or landscaping or (ii) | ||||||
4 | tangible personal property required to be
titled or registered | ||||||
5 | with a department, agency, or unit of federal, state, or
local | ||||||
6 | government. The Manufacturer's Purchase Credit may be used, | ||||||
7 | prior to
October 1, 2003, to satisfy
the tax arising either | ||||||
8 | from the purchase of
machinery and equipment on or after | ||||||
9 | January 1,
1995 for which the exemption
provided by paragraph | ||||||
10 | (18) of Section 3-5 of this Act was
erroneously claimed, or the | ||||||
11 | purchase of machinery and equipment on or after
July 1, 1996 | ||||||
12 | for which the exemption provided by paragraph (6) of Section | ||||||
13 | 3-5
of this Act was erroneously claimed, but not in
| ||||||
14 | satisfaction of penalty, if any, and interest for failure to | ||||||
15 | pay the tax
when due. A
purchaser of production related | ||||||
16 | tangible personal property who is required to
pay Illinois Use | ||||||
17 | Tax or Service Use Tax on the purchase directly to the
| ||||||
18 | Department may, prior to October 1, 2003, utilize the | ||||||
19 | Manufacturer's
Purchase Credit in satisfaction of
the tax | ||||||
20 | arising from that purchase, but not in
satisfaction of penalty | ||||||
21 | and interest.
A purchaser who uses the Manufacturer's Purchase | ||||||
22 | Credit to purchase property
which is later determined not to be | ||||||
23 | production related tangible personal
property may be liable for | ||||||
24 | tax, penalty, and interest on the purchase of that
property as | ||||||
25 | of the date of purchase but shall be entitled to use the | ||||||
26 | disallowed
Manufacturer's Purchase
Credit, so long as it has |
| |||||||
| |||||||
1 | not expired and is used prior to October 1, 2003,
on qualifying | ||||||
2 | purchases of production
related tangible personal property not | ||||||
3 | previously subject to credit usage.
The Manufacturer's | ||||||
4 | Purchase Credit earned by a manufacturer or graphic arts
| ||||||
5 | producer
expires the last day of the second calendar year | ||||||
6 | following the
calendar year in which the credit arose. No | ||||||
7 | Manufacturer's Purchase Credit
may be used after September 30, | ||||||
8 | 2003
regardless of
when that credit was earned.
| ||||||
9 | A purchaser earning Manufacturer's Purchase Credit shall | ||||||
10 | sign and file an
annual Report of Manufacturer's Purchase | ||||||
11 | Credit Earned for each calendar year
no later than the last day | ||||||
12 | of the sixth month following the calendar year in
which a | ||||||
13 | Manufacturer's Purchase Credit is earned. A Report of | ||||||
14 | Manufacturer's
Purchase Credit Earned shall be filed on forms | ||||||
15 | as prescribed or approved by the
Department and shall state, | ||||||
16 | for each month of the calendar year: (i) the total
purchase | ||||||
17 | price of all purchases of exempt manufacturing or graphic arts
| ||||||
18 | machinery on which the
credit was earned; (ii) the total State | ||||||
19 | Use Tax or Service Use Tax which would
have been due on those | ||||||
20 | items; (iii) the percentage used to calculate the amount
of | ||||||
21 | credit earned; (iv) the amount of credit earned; and (v) such | ||||||
22 | other
information as the Department may reasonably require. A | ||||||
23 | purchaser earning
Manufacturer's Purchase Credit shall | ||||||
24 | maintain records which identify, as to
each purchase of | ||||||
25 | manufacturing or graphic arts machinery and equipment
on which | ||||||
26 | the purchaser
earned Manufacturer's Purchase Credit, the |
| |||||||
| |||||||
1 | vendor (including, if applicable,
either the vendor's | ||||||
2 | registration number or Federal Employer Identification
| ||||||
3 | Number), the purchase price, and the amount of Manufacturer's | ||||||
4 | Purchase Credit
earned on each purchase.
| ||||||
5 | A purchaser using Manufacturer's Purchase Credit shall | ||||||
6 | sign and file an
annual Report of Manufacturer's Purchase | ||||||
7 | Credit Used for each calendar year no
later than the last day | ||||||
8 | of the sixth month following the calendar year in which
a | ||||||
9 | Manufacturer's Purchase Credit is used. A Report of | ||||||
10 | Manufacturer's Purchase
Credit Used
shall be filed on forms as | ||||||
11 | prescribed or approved by the Department and
shall state, for | ||||||
12 | each month of the calendar year: (i) the total purchase price
| ||||||
13 | of production related tangible personal property purchased | ||||||
14 | from Illinois
suppliers; (ii) the total purchase price of | ||||||
15 | production related tangible
personal property purchased from | ||||||
16 | out-of-state suppliers; (iii) the total amount
of credit used | ||||||
17 | during such month; and (iv) such
other information as the | ||||||
18 | Department may reasonably require. A purchaser using
| ||||||
19 | Manufacturer's Purchase Credit shall maintain records that | ||||||
20 | identify, as to
each purchase of production related tangible | ||||||
21 | personal property on which the
purchaser used Manufacturer's | ||||||
22 | Purchase Credit, the vendor (including, if
applicable, either | ||||||
23 | the vendor's registration number or Federal Employer
| ||||||
24 | Identification Number), the purchase price, and the amount of | ||||||
25 | Manufacturer's
Purchase Credit used on each purchase.
| ||||||
26 | No annual report shall be filed before May 1, 1996 or after |
| |||||||
| |||||||
1 | June 30,
2004. A purchaser that fails to
file an annual Report | ||||||
2 | of Manufacturer's Purchase Credit Earned or an annual
Report of | ||||||
3 | Manufacturer's
Purchase Credit Used by the last day of the | ||||||
4 | sixth month following the
end of the calendar year shall | ||||||
5 | forfeit all Manufacturer's Purchase Credit for
that calendar | ||||||
6 | year unless it establishes that its failure to file was due to
| ||||||
7 | reasonable cause. Manufacturer's Purchase Credit reports may | ||||||
8 | be amended
to report and claim credit on qualifying purchases | ||||||
9 | not previously reported at
any time before the credit would | ||||||
10 | have expired, unless both the Department and
the purchaser have | ||||||
11 | agreed to an extension of
the statute of limitations for the | ||||||
12 | issuance of a notice of tax liability as
provided in Section 4 | ||||||
13 | of the Retailers' Occupation Tax Act. If the time for
| ||||||
14 | assessment or refund has been extended, then amended reports | ||||||
15 | for a calendar
year may be filed at any time prior to the date | ||||||
16 | to which the statute of
limitations for the calendar year or | ||||||
17 | portion thereof has been extended.
No Manufacturer's Purchase
| ||||||
18 | Credit report filed with the Department for periods prior to | ||||||
19 | January 1, 1995
shall be approved.
Manufacturer's Purchase | ||||||
20 | Credit claimed on an amended report may be used,
until October | ||||||
21 | 1, 2003, to
satisfy tax liability under the Use Tax Act or the | ||||||
22 | Service Use Tax Act (i) on
qualifying purchases of production | ||||||
23 | related tangible personal property made
after the date the | ||||||
24 | amended report is filed or (ii) assessed by the Department
on | ||||||
25 | qualifying purchases of production related tangible personal | ||||||
26 | property made
in the case of manufacturers
on or after January |
| |||||||
| |||||||
1 | 1, 1995, or in the case of graphic arts producers on or
after | ||||||
2 | July 1, 1996.
| ||||||
3 | If the purchaser is not the manufacturer or a graphic arts | ||||||
4 | producer, but
rents or
leases the use of the property to a | ||||||
5 | manufacturer or graphic arts producer,
the purchaser may earn,
| ||||||
6 | report, and use Manufacturer's Purchase Credit in the same | ||||||
7 | manner as a
manufacturer or graphic arts producer.
| ||||||
8 | A purchaser shall not be entitled to any Manufacturer's | ||||||
9 | Purchase
Credit for a purchase that is required to be reported | ||||||
10 | and is not timely
reported as provided in this Section. A | ||||||
11 | purchaser remains liable for (i) any
tax that was satisfied by | ||||||
12 | use of a Manufacturer's Purchase Credit, as of the
date of | ||||||
13 | purchase, if that use is not timely reported as required in | ||||||
14 | this
Section and (ii) for any applicable penalties and interest | ||||||
15 | for failing to pay
the tax when due. No Manufacturer's Purchase | ||||||
16 | Credit may be used after
September 30, 2003 to
satisfy any
tax | ||||||
17 | liability imposed under this Act, including any audit | ||||||
18 | liability.
| ||||||
19 | (b) Manufacturer's Purchase Credit earned on and after | ||||||
20 | September 1, 2004. This subsection (b) applies to | ||||||
21 | Manufacturer's Purchase Credit earned on and after September 1, | ||||||
22 | 2004. Manufacturer's Purchase Credit earned on or after | ||||||
23 | September 1, 2004 may only be used to satisfy the Use Tax or | ||||||
24 | Service Use Tax liability incurred on production related | ||||||
25 | tangible personal property purchased on or after September 1, | ||||||
26 | 2004. A purchaser of production related tangible personal |
| |||||||
| |||||||
1 | property desiring to use the Manufacturer's Purchase Credit | ||||||
2 | shall certify to the seller that the purchaser is satisfying | ||||||
3 | all or part of the liability under the Use Tax Act or the | ||||||
4 | Service Use Tax Act that is due on the purchase of the | ||||||
5 | production related tangible personal property by use of | ||||||
6 | Manufacturer's Purchase Credit. The Manufacturer's Purchase | ||||||
7 | Credit certification must be dated and shall include the name | ||||||
8 | and address of the purchaser, the purchaser's registration | ||||||
9 | number, if registered, the credit being applied, and a | ||||||
10 | statement that the State Use Tax or Service Use Tax liability | ||||||
11 | is being satisfied with the manufacturer's or graphic arts | ||||||
12 | producer's accumulated purchase credit. Certification may be | ||||||
13 | incorporated into the manufacturer's or graphic arts | ||||||
14 | producer's purchase order. Manufacturer's Purchase Credit | ||||||
15 | certification provided by the manufacturer or graphic arts | ||||||
16 | producer may be used to satisfy the retailer's or serviceman's | ||||||
17 | liability under the Retailers' Occupation Tax Act or Service | ||||||
18 | Occupation Tax Act for the credit claimed, not to exceed 6.25% | ||||||
19 | of the receipts subject to tax from a qualifying purchase, but | ||||||
20 | only if the retailer or serviceman reports the Manufacturer's | ||||||
21 | Purchase Credit claimed as required by the Department. The | ||||||
22 | Manufacturer's Purchase Credit earned by purchase of exempt | ||||||
23 | manufacturing machinery and equipment or graphic arts | ||||||
24 | machinery and equipment is a non-transferable credit. A | ||||||
25 | manufacturer or graphic arts producer that enters into a | ||||||
26 | contract involving the installation of tangible personal |
| |||||||
| |||||||
1 | property into real estate within a manufacturing or graphic | ||||||
2 | arts production facility may, on or after September 1, 2004, | ||||||
3 | authorize a construction contractor to utilize credit | ||||||
4 | accumulated by the manufacturer or graphic arts producer to | ||||||
5 | purchase the tangible personal property. A manufacturer or | ||||||
6 | graphic arts producer intending to use accumulated credit to | ||||||
7 | purchase such tangible personal property shall execute a | ||||||
8 | written contract authorizing the contractor to utilize a | ||||||
9 | specified dollar amount of credit. The contractor shall furnish | ||||||
10 | the supplier with the manufacturer's or graphic arts producer's | ||||||
11 | name, registration or resale number, and a statement that a | ||||||
12 | specific amount of the Use Tax or Service Use Tax liability, | ||||||
13 | not to exceed 6.25% of the selling price, is being satisfied | ||||||
14 | with the credit. The manufacturer or graphic arts producer | ||||||
15 | shall remain liable to timely report all information required | ||||||
16 | by the annual Report of Manufacturer's Purchase Credit Used for | ||||||
17 | all credit utilized by a construction contractor. | ||||||
18 | The Manufacturer's Purchase Credit may be used to satisfy | ||||||
19 | liability under the Use Tax Act or the Service Use Tax Act due | ||||||
20 | on the purchase, made on or after September 1, 2004, of | ||||||
21 | production related tangible personal property (including | ||||||
22 | purchases by a manufacturer, by a graphic arts producer, or by | ||||||
23 | a lessor who rents or leases the use of the property to a | ||||||
24 | manufacturer or graphic arts producer) that does not otherwise | ||||||
25 | qualify for the manufacturing machinery and equipment | ||||||
26 | exemption or the graphic arts machinery and equipment |
| |||||||
| |||||||
1 | exemption. "Production related tangible personal property" | ||||||
2 | means (i) all tangible personal property used or consumed by | ||||||
3 | the purchaser in a manufacturing facility in which a | ||||||
4 | manufacturing process described in Section 2-45 of the | ||||||
5 | Retailers' Occupation Tax Act takes place, including tangible | ||||||
6 | personal property purchased for incorporation into real estate | ||||||
7 | within a manufacturing facility and including, but not limited | ||||||
8 | to, tangible personal property used or consumed in activities | ||||||
9 | such as preproduction material handling, receiving, quality | ||||||
10 | control, inventory control, storage, staging, and packaging | ||||||
11 | for shipping and transportation purposes; (ii) all tangible | ||||||
12 | personal property used or consumed by the purchaser in a | ||||||
13 | graphic arts facility in which graphic arts production as | ||||||
14 | described in Section 2-30 of the Retailers' Occupation Tax Act | ||||||
15 | takes place, including tangible personal property purchased | ||||||
16 | for incorporation into real estate within a graphic arts | ||||||
17 | facility and including, but not limited to, all tangible | ||||||
18 | personal property used or consumed in activities such as | ||||||
19 | graphic arts preliminary or pre-press production, | ||||||
20 | pre-production material handling, receiving, quality control, | ||||||
21 | inventory control, storage, staging, sorting, labeling, | ||||||
22 | mailing, tying, wrapping, and packaging; and (iii) all tangible | ||||||
23 | personal property used or consumed by the purchaser for | ||||||
24 | research and development. "Production related tangible | ||||||
25 | personal property" does not include (i) tangible personal | ||||||
26 | property used, within or without a manufacturing facility, in |
| |||||||
| |||||||
1 | sales, purchasing, accounting, fiscal management, marketing, | ||||||
2 | personnel recruitment or selection, or landscaping or (ii) | ||||||
3 | tangible personal property required to be titled or registered | ||||||
4 | with a department, agency, or unit of federal, state, or local | ||||||
5 | government. The Manufacturer's Purchase Credit may be used to | ||||||
6 | satisfy the tax arising either from the purchase of machinery | ||||||
7 | and equipment on or after September 1, 2004 for which the | ||||||
8 | exemption provided by paragraph (18) of Section 3-5 of this Act | ||||||
9 | was erroneously claimed, or the purchase of machinery and | ||||||
10 | equipment on or after September 1, 2004 for which the exemption | ||||||
11 | provided by paragraph (6) of Section 3-5 of this Act was | ||||||
12 | erroneously claimed, but not in satisfaction of penalty, if | ||||||
13 | any, and interest for failure to pay the tax when due. A | ||||||
14 | purchaser of production related tangible personal property | ||||||
15 | that is purchased on or after September 1, 2004 who is required | ||||||
16 | to pay Illinois Use Tax or Service Use Tax on the purchase | ||||||
17 | directly to the Department may utilize the Manufacturer's | ||||||
18 | Purchase Credit in satisfaction of the tax arising from that | ||||||
19 | purchase, but not in satisfaction of penalty and interest. A | ||||||
20 | purchaser who uses the Manufacturer's Purchase Credit to | ||||||
21 | purchase property on and after September 1, 2004 which is later | ||||||
22 | determined not to be production related tangible personal | ||||||
23 | property may be liable for tax, penalty, and interest on the | ||||||
24 | purchase of that property as of the date of purchase but shall | ||||||
25 | be entitled to use the disallowed Manufacturer's Purchase | ||||||
26 | Credit, so long as it has not expired and is used on qualifying |
| |||||||
| |||||||
1 | purchases of production related tangible personal property not | ||||||
2 | previously subject to credit usage. The Manufacturer's | ||||||
3 | Purchase Credit earned by a manufacturer or graphic arts | ||||||
4 | producer expires the last day of the second calendar year | ||||||
5 | following the calendar year in which the credit arose.
A | ||||||
6 | purchaser earning Manufacturer's Purchase Credit shall sign | ||||||
7 | and file an annual Report of Manufacturer's Purchase Credit | ||||||
8 | Earned for each calendar year no later than the last day of the | ||||||
9 | sixth month following the calendar year in which a | ||||||
10 | Manufacturer's Purchase Credit is earned. A Report of | ||||||
11 | Manufacturer's Purchase Credit Earned shall be filed on forms | ||||||
12 | as prescribed or approved by the Department and shall state, | ||||||
13 | for each month of the calendar year: (i) the total purchase | ||||||
14 | price of all purchases of exempt manufacturing or graphic arts | ||||||
15 | machinery on which the credit was earned; (ii) the total State | ||||||
16 | Use Tax or Service Use Tax which would have been due on those | ||||||
17 | items; (iii) the percentage used to calculate the amount of | ||||||
18 | credit earned; (iv) the amount of credit earned; and (v) such | ||||||
19 | other information as the Department may reasonably require. A | ||||||
20 | purchaser earning Manufacturer's Purchase Credit shall | ||||||
21 | maintain records which identify, as to each purchase of | ||||||
22 | manufacturing or graphic arts machinery and equipment on which | ||||||
23 | the purchaser earned Manufacturer's Purchase Credit, the | ||||||
24 | vendor (including, if applicable, either the vendor's | ||||||
25 | registration number or Federal Employer Identification | ||||||
26 | Number), the purchase price, and the amount of Manufacturer's |
| |||||||
| |||||||
1 | Purchase Credit earned on each purchase.
A purchaser using | ||||||
2 | Manufacturer's Purchase Credit shall sign and file an annual | ||||||
3 | Report of Manufacturer's Purchase Credit Used for each calendar | ||||||
4 | year no later than the last day of the sixth month following | ||||||
5 | the calendar year in which a Manufacturer's Purchase Credit is | ||||||
6 | used. A Report of Manufacturer's Purchase Credit Used shall be | ||||||
7 | filed on forms as prescribed or approved by the Department and | ||||||
8 | shall state, for each month of the calendar year: (i) the total | ||||||
9 | purchase price of production related tangible personal | ||||||
10 | property purchased from Illinois suppliers; (ii) the total | ||||||
11 | purchase price of production related tangible personal | ||||||
12 | property purchased from out-of-state suppliers; (iii) the | ||||||
13 | total amount of credit used during such month; and (iv) such | ||||||
14 | other information as the Department may reasonably require. A | ||||||
15 | purchaser using Manufacturer's Purchase Credit shall maintain | ||||||
16 | records that identify, as to each purchase of production | ||||||
17 | related tangible personal property on which the purchaser used | ||||||
18 | Manufacturer's Purchase Credit, the vendor (including, if | ||||||
19 | applicable, either the vendor's registration number or Federal | ||||||
20 | Employer Identification Number), the purchase price, and the | ||||||
21 | amount of Manufacturer's Purchase Credit used on each purchase. | ||||||
22 | A purchaser that fails to file an annual Report of | ||||||
23 | Manufacturer's Purchase Credit Earned or an annual Report of | ||||||
24 | Manufacturer's Purchase Credit Used by the last day of the | ||||||
25 | sixth month following the end of the calendar year shall | ||||||
26 | forfeit all Manufacturer's Purchase Credit for that calendar |
| |||||||
| |||||||
1 | year unless it establishes that its failure to file was due to | ||||||
2 | reasonable cause. Manufacturer's Purchase Credit reports may | ||||||
3 | be amended to report and claim credit on qualifying purchases | ||||||
4 | not previously reported at any time before the credit would | ||||||
5 | have expired, unless both the Department and the purchaser have | ||||||
6 | agreed to an extension of the statute of limitations for the | ||||||
7 | issuance of a notice of tax liability as provided in Section 4 | ||||||
8 | of the Retailers' Occupation Tax Act. If the time for | ||||||
9 | assessment or refund has been extended, then amended reports | ||||||
10 | for a calendar year may be filed at any time prior to the date | ||||||
11 | to which the statute of limitations for the calendar year or | ||||||
12 | portion thereof has been extended. Manufacturer's Purchase | ||||||
13 | Credit claimed on an amended report may be used to satisfy tax | ||||||
14 | liability under the Use Tax Act or the Service Use Tax Act (i) | ||||||
15 | on qualifying purchases of production related tangible | ||||||
16 | personal property made after the date the amended report is | ||||||
17 | filed or (ii) assessed by the Department on qualifying | ||||||
18 | production related tangible personal property purchased on or | ||||||
19 | after September 1, 2004. If the purchaser is not the | ||||||
20 | manufacturer or a graphic arts producer, but rents or leases | ||||||
21 | the use of the property to a manufacturer or graphic arts | ||||||
22 | producer, the purchaser may earn, report, and use | ||||||
23 | Manufacturer's Purchase Credit in the same manner as a | ||||||
24 | manufacturer or graphic arts producer.
A purchaser shall not be | ||||||
25 | entitled to any Manufacturer's Purchase Credit for a purchase | ||||||
26 | that is required to be reported and is not timely reported as |
| |||||||
| |||||||
1 | provided in this Section. A purchaser remains liable for (i) | ||||||
2 | any tax that was satisfied by use of a Manufacturer's Purchase | ||||||
3 | Credit, as of the date of purchase, if that use is not timely | ||||||
4 | reported as required in this Section and (ii) for any | ||||||
5 | applicable penalties and interest for failing to pay the tax | ||||||
6 | when due. | ||||||
7 | (Source: P.A. 96-116, eff. 7-31-09.)
| ||||||
8 | Section 10. The Service Use Tax Act is amended by changing | ||||||
9 | Section 3-70 as follows:
| ||||||
10 | (35 ILCS 110/3-70)
| ||||||
11 | Sec. 3-70. Manufacturer's Purchase Credit. For purchases | ||||||
12 | of machinery and
equipment made on and after January 1, 1995 | ||||||
13 | and through June 30, 2003, and on and after September 1, 2004 | ||||||
14 | through August 30, 2019 August 30, 2014 ,
a
purchaser of | ||||||
15 | manufacturing
machinery and equipment that qualifies for the | ||||||
16 | exemption provided by Section
2 of this Act earns a credit in | ||||||
17 | an amount equal to a fixed
percentage of
the tax which would | ||||||
18 | have been incurred under this Act on those purchases.
For | ||||||
19 | purchases of graphic arts machinery and equipment made on or | ||||||
20 | after July
1, 1996 through June 30, 2003, and on and after | ||||||
21 | September 1, 2004 through August 30, 2019 August 30, 2014 , a | ||||||
22 | purchase of graphic arts machinery and
equipment that qualifies | ||||||
23 | for
the exemption provided by paragraph (5) of Section 3-5 of | ||||||
24 | this Act earns a
credit in an amount equal to a fixed |
| |||||||
| |||||||
1 | percentage of the tax that would have been
incurred under this | ||||||
2 | Act on those purchases.
The credit earned for the purchase of | ||||||
3 | manufacturing machinery and equipment
and graphic arts | ||||||
4 | machinery and equipment shall be referred to
as the | ||||||
5 | Manufacturer's Purchase Credit.
A graphic arts producer is a | ||||||
6 | person engaged in graphic arts production as
defined in Section | ||||||
7 | 3-30 of the Service Occupation Tax Act. Beginning July 1,
1996, | ||||||
8 | all references in this Section to manufacturers or | ||||||
9 | manufacturing shall
also refer to graphic arts producers or | ||||||
10 | graphic arts production.
| ||||||
11 | The amount of credit shall be a percentage of the tax that | ||||||
12 | would have been
incurred on the purchase of the manufacturing | ||||||
13 | machinery and equipment or
graphic arts machinery and equipment
| ||||||
14 | if the
exemptions provided by Section 2 or paragraph (5) of
| ||||||
15 | Section 3-5 of
this Act had not
been applicable.
| ||||||
16 | All purchases prior to October 1, 2003 and on and after | ||||||
17 | September 1, 2004 and through August 30, 2019, of manufacturing | ||||||
18 | machinery and
equipment and graphic arts
machinery and | ||||||
19 | equipment that qualify for the exemptions provided by paragraph
| ||||||
20 | (5) of Section 2
or paragraph (5) of Section 3-5 of this Act | ||||||
21 | qualify for the credit without
regard to whether the serviceman | ||||||
22 | elected, or could have elected, under
paragraph (7) of Section | ||||||
23 | 2 of this Act to exclude the transaction from this
Act. If the | ||||||
24 | serviceman's billing to the service customer separately states | ||||||
25 | a
selling price for the exempt manufacturing machinery or | ||||||
26 | equipment or the exempt
graphic arts machinery and equipment, |
| |||||||
| |||||||
1 | the credit shall be calculated, as
otherwise provided herein, | ||||||
2 | based on that selling price. If the serviceman's
billing does | ||||||
3 | not separately state a selling price for the exempt | ||||||
4 | manufacturing
machinery and equipment or the exempt graphic | ||||||
5 | arts machinery and equipment, the
credit shall be calculated, | ||||||
6 | as otherwise provided herein, based on 50% of the
entire | ||||||
7 | billing. If the serviceman contracts to design, develop, and | ||||||
8 | produce
special order manufacturing machinery and equipment or | ||||||
9 | special order graphic
arts machinery and equipment, and the | ||||||
10 | billing does not separately state a
selling price for such | ||||||
11 | special order machinery and
equipment, the credit shall be | ||||||
12 | calculated, as otherwise provided herein, based
on 50% of the | ||||||
13 | entire billing. The provisions of this paragraph are effective
| ||||||
14 | for purchases made on or after January 1, 1995.
| ||||||
15 | The percentage shall be as follows:
| ||||||
16 | (1) 15% for purchases made on or before June 30, 1995.
| ||||||
17 | (2) 25% for purchases made after June 30, 1995, and on | ||||||
18 | or before June 30,
1996.
| ||||||
19 | (3) 40% for purchases made after June 30, 1996, and on | ||||||
20 | or before June 30,
1997.
| ||||||
21 | (4) 50% for purchases made on or after July 1, 1997.
| ||||||
22 | (a) Manufacturer's Purchase Credit earned prior to July 1, | ||||||
23 | 2003. This subsection (a) applies to Manufacturer's Purchase | ||||||
24 | Credit earned prior to July 1, 2003. A purchaser of production | ||||||
25 | related tangible personal property desiring to use
the | ||||||
26 | Manufacturer's Purchase Credit shall certify to the seller |
| |||||||
| |||||||
1 | prior to
October 1, 2003 that the
purchaser is satisfying all | ||||||
2 | or part of
the
liability under the Use Tax Act or the Service | ||||||
3 | Use Tax Act that is due on the
purchase of the production | ||||||
4 | related tangible personal property by use of a
Manufacturer's | ||||||
5 | Purchase Credit. The Manufacturer's Purchase Credit
| ||||||
6 | certification
must be dated and shall include the name and | ||||||
7 | address of the purchaser, the
purchaser's registration number, | ||||||
8 | if registered, the
credit being
applied, and a statement that | ||||||
9 | the State Use Tax or Service Use Tax liability
is being | ||||||
10 | satisfied with the manufacturer's or graphic arts producer's
| ||||||
11 | accumulated purchase credit.
Certification may be incorporated | ||||||
12 | into the manufacturer's or graphic arts
producer's
purchase | ||||||
13 | order.
Manufacturer's Purchase Credit certification provided | ||||||
14 | by the manufacturer
or graphic
arts producer
prior to October | ||||||
15 | 1, 2003 may be used to satisfy the retailer's or
serviceman's | ||||||
16 | liability under the
Retailers' Occupation Tax Act or
Service
| ||||||
17 | Occupation Tax Act for the credit claimed, not to exceed
6.25% | ||||||
18 | of the receipts subject to tax from a qualifying purchase, but | ||||||
19 | only if
the retailer or serviceman reports the Manufacturer's | ||||||
20 | Purchase Credit claimed
as required by the Department. A | ||||||
21 | Manufacturer's Purchase Credit reported on
any original or | ||||||
22 | amended return
filed under
this Act after October 20, 2003 | ||||||
23 | shall be disallowed. The Manufacturer's
Purchase Credit earned | ||||||
24 | by
purchase of exempt manufacturing machinery and equipment
or | ||||||
25 | graphic arts machinery and equipment is a
non-transferable | ||||||
26 | credit. A manufacturer or graphic arts producer
that enters |
| |||||||
| |||||||
1 | into a
contract involving the installation of tangible personal | ||||||
2 | property into
real estate within a manufacturing or graphic | ||||||
3 | arts production facility, prior
to October 1, 2003, may | ||||||
4 | authorize a construction contractor
to utilize credit | ||||||
5 | accumulated by the manufacturer or graphic arts producer
to
| ||||||
6 | purchase the tangible personal property. A manufacturer or | ||||||
7 | graphic arts
producer
intending to use accumulated credit to | ||||||
8 | purchase such tangible personal
property shall execute a | ||||||
9 | written contract authorizing the contractor to utilize
a | ||||||
10 | specified dollar amount of credit. The contractor shall | ||||||
11 | furnish, prior to
October 1, 2003, the supplier
with the | ||||||
12 | manufacturer's or graphic arts producer's name, registration | ||||||
13 | or
resale number, and a statement
that a specific amount of the | ||||||
14 | Use Tax or Service Use Tax liability, not to
exceed 6.25% of | ||||||
15 | the selling price, is being satisfied with the credit. The
| ||||||
16 | manufacturer or graphic arts producer shall remain liable to | ||||||
17 | timely report
all information required by
the annual Report of | ||||||
18 | Manufacturer's Purchase Credit Used for credit utilized by
a
| ||||||
19 | construction contractor.
| ||||||
20 | No Manufacturer's Purchase Credit earned prior to July 1, | ||||||
21 | 2003 may be used after October 1, 2003. The Manufacturer's | ||||||
22 | Purchase Credit may be used to satisfy liability under the
Use | ||||||
23 | Tax Act or the Service Use Tax Act due on the purchase of | ||||||
24 | production
related tangible personal property (including | ||||||
25 | purchases by a manufacturer, by
a graphic arts producer,
or a | ||||||
26 | lessor who rents or leases the use of
the property to a |
| |||||||
| |||||||
1 | manufacturer or graphic arts producer) that does not
otherwise | ||||||
2 | qualify for the manufacturing machinery and equipment
| ||||||
3 | exemption or the graphic arts machinery and equipment | ||||||
4 | exemption.
"Production related tangible personal
property" | ||||||
5 | means (i) all tangible personal property used or consumed by | ||||||
6 | the
purchaser in a manufacturing facility in which a | ||||||
7 | manufacturing process
described in Section 2-45 of the | ||||||
8 | Retailers' Occupation Tax Act
takes place, including tangible | ||||||
9 | personal property purchased for incorporation
into
real estate | ||||||
10 | within a manufacturing facility and including, but not limited
| ||||||
11 | to,
tangible personal property used or consumed in activities | ||||||
12 | such as
pre-production
material handling, receiving, quality | ||||||
13 | control, inventory control, storage,
staging, and packaging | ||||||
14 | for shipping and transportation purposes; (ii)
all tangible | ||||||
15 | personal property used or consumed by the purchaser in a | ||||||
16 | graphic
arts facility in which graphic arts production as | ||||||
17 | described in Section 2-30 of
the Retailers' Occupation Tax Act | ||||||
18 | takes place, including tangible personal
property purchased | ||||||
19 | for incorporation into real estate within a graphic arts
| ||||||
20 | facility and including, but not limited to, all tangible | ||||||
21 | personal property used
or consumed in activities such as | ||||||
22 | graphic arts preliminary or pre-press
production, | ||||||
23 | pre-production material handling, receiving, quality control,
| ||||||
24 | inventory control, storage, staging, sorting, labeling, | ||||||
25 | mailing, tying,
wrapping, and packaging; and (iii) all tangible | ||||||
26 | personal property used or
consumed by the purchaser
for |
| |||||||
| |||||||
1 | research and
development. "Production related tangible | ||||||
2 | personal property" does not include
(i) tangible personal | ||||||
3 | property used, within or without a manufacturing or
graphic | ||||||
4 | arts
facility, in sales, purchasing,
accounting, fiscal | ||||||
5 | management, marketing,
personnel recruitment or selection, or | ||||||
6 | landscaping or (ii) tangible personal
property required to be | ||||||
7 | titled or registered with a department, agency, or unit
of | ||||||
8 | federal, state, or local
government. The Manufacturer's | ||||||
9 | Purchase Credit may be used, prior to October
1, 2003, to | ||||||
10 | satisfy the tax
arising either from the purchase of
machinery | ||||||
11 | and equipment on or after January 1, 1995
for which the | ||||||
12 | manufacturing machinery and equipment exemption
provided by | ||||||
13 | Section 2 of this Act was
erroneously claimed, or the purchase | ||||||
14 | of machinery and equipment on or after
July 1, 1996 for which | ||||||
15 | the exemption provided by paragraph (5) of Section 3-5
of this | ||||||
16 | Act was erroneously claimed, but not in
satisfaction of | ||||||
17 | penalty, if any, and interest for failure to pay the tax
when | ||||||
18 | due. A
purchaser of production related tangible personal | ||||||
19 | property who is required to
pay Illinois Use Tax or Service Use | ||||||
20 | Tax on the purchase directly to the
Department may, prior to | ||||||
21 | October 1, 2003, utilize the Manufacturer's
Purchase Credit in | ||||||
22 | satisfaction of
the tax arising from that purchase, but not in
| ||||||
23 | satisfaction of penalty and
interest.
A purchaser who uses the | ||||||
24 | Manufacturer's Purchase Credit to purchase
property
which is | ||||||
25 | later determined not to be production related tangible personal
| ||||||
26 | property may be liable for tax, penalty, and interest on the |
| |||||||
| |||||||
1 | purchase of that
property as of the date of purchase but shall | ||||||
2 | be entitled to use the disallowed
Manufacturer's Purchase
| ||||||
3 | Credit, so long as it has not expired and is used prior to | ||||||
4 | October 1, 2003,
on qualifying purchases of production
related | ||||||
5 | tangible personal property not previously subject to credit | ||||||
6 | usage.
The Manufacturer's Purchase Credit earned by a | ||||||
7 | manufacturer or graphic arts
producer
expires the last day of | ||||||
8 | the second calendar year following the
calendar year in
which | ||||||
9 | the credit arose. No Manufacturer's Purchase Credit may be used | ||||||
10 | after
September 30, 2003
regardless of
when that credit was | ||||||
11 | earned.
| ||||||
12 | A purchaser earning Manufacturer's Purchase Credit shall | ||||||
13 | sign and file an
annual Report of Manufacturer's Purchase | ||||||
14 | Credit Earned for each calendar year
no later
than the last day | ||||||
15 | of the sixth month following the calendar year in which a
| ||||||
16 | Manufacturer's Purchase Credit is earned. A Report of | ||||||
17 | Manufacturer's Purchase
Credit
Earned shall be filed on forms | ||||||
18 | as prescribed or approved by the Department and
shall state, | ||||||
19 | for each month of the calendar year: (i) the total purchase | ||||||
20 | price
of all purchases of exempt manufacturing or graphic arts | ||||||
21 | machinery on which
the credit was
earned; (ii) the total State | ||||||
22 | Use Tax or Service Use Tax which would have been
due on those | ||||||
23 | items; (iii) the percentage used to calculate the amount of | ||||||
24 | credit
earned; (iv) the amount of credit earned; and (v) such | ||||||
25 | other information as the
Department may reasonably require. A | ||||||
26 | purchaser earning Manufacturer's Purchase
Credit shall |
| |||||||
| |||||||
1 | maintain records which identify, as to each purchase of
| ||||||
2 | manufacturing or graphic arts machinery and equipment on which | ||||||
3 | the
purchaser earned
Manufacturer's Purchase Credit, the | ||||||
4 | vendor (including, if applicable, either
the vendor's | ||||||
5 | registration number or Federal Employer Identification | ||||||
6 | Number),
the purchase price, and the amount of Manufacturer's | ||||||
7 | Purchase Credit earned on
each purchase.
| ||||||
8 | A purchaser using Manufacturer's Purchase Credit shall | ||||||
9 | sign and file an
annual Report of Manufacturer's Purchase | ||||||
10 | Credit Used for each calendar year no
later than the last day | ||||||
11 | of the sixth month following the calendar year in which
a | ||||||
12 | Manufacturer's Purchase Credit is used. A Report of | ||||||
13 | Manufacturer's Purchase
Credit Used shall be filed on forms as | ||||||
14 | prescribed or approved by the Department
and
shall state, for | ||||||
15 | each month of the calendar year: (i) the total purchase price
| ||||||
16 | of production related tangible personal property purchased | ||||||
17 | from Illinois
suppliers; (ii) the total purchase price
of | ||||||
18 | production related tangible personal property purchased from | ||||||
19 | out-of-state
suppliers; (iii) the total amount of credit used | ||||||
20 | during such month; and (iv)
such
other information as the | ||||||
21 | Department may reasonably require. A purchaser using
| ||||||
22 | Manufacturer's Purchase Credit shall maintain records that | ||||||
23 | identify, as to
each purchase of production related tangible | ||||||
24 | personal property on which the
purchaser used Manufacturer's | ||||||
25 | Purchase Credit, the vendor (including, if
applicable, either | ||||||
26 | the vendor's registration number or Federal Employer
|
| |||||||
| |||||||
1 | Identification Number), the purchase price, and the amount of | ||||||
2 | Manufacturer's
Purchase Credit used on each purchase.
| ||||||
3 | No annual report shall be filed before May 1, 1996 or after | ||||||
4 | June 30,
2004.
A purchaser that fails to file an annual Report | ||||||
5 | of Manufacturer's Purchase
Credit
Earned or an annual Report of | ||||||
6 | Manufacturer's Purchase Credit Used by the last
day
of the | ||||||
7 | sixth month following the end of the calendar year shall | ||||||
8 | forfeit all
Manufacturer's Purchase Credit for that calendar | ||||||
9 | year unless it establishes
that its failure to file was due to | ||||||
10 | reasonable cause.
Manufacturer's Purchase Credit
reports may | ||||||
11 | be amended to report and claim credit on qualifying purchases | ||||||
12 | not
previously reported at any time before the credit would | ||||||
13 | have expired, unless
both the Department and the purchaser have | ||||||
14 | agreed to an extension of
the statute of limitations for the | ||||||
15 | issuance of a notice of tax liability as
provided in Section 4 | ||||||
16 | of the Retailers' Occupation Tax Act. If the time for
| ||||||
17 | assessment or refund has been extended, then amended reports | ||||||
18 | for a calendar
year may be filed at any time prior to the date | ||||||
19 | to which the statute of
limitations for the calendar year or | ||||||
20 | portion thereof has been extended.
No Manufacturer's Purchase | ||||||
21 | Credit report filed with the Department
for periods
prior to | ||||||
22 | January 1, 1995 shall be approved.
Manufacturer's Purchase | ||||||
23 | Credit claimed on an amended report may be used,
prior to | ||||||
24 | October 1, 2003, to
satisfy tax liability under the Use Tax Act | ||||||
25 | or the Service Use Tax Act (i) on
qualifying purchases of | ||||||
26 | production related tangible personal property made
after the |
| |||||||
| |||||||
1 | date the amended report is filed or (ii) assessed by the | ||||||
2 | Department
on qualifying purchases of production related | ||||||
3 | tangible personal property made
in the case of manufacturers on | ||||||
4 | or after January 1, 1995, or in the case
of graphic arts | ||||||
5 | producers on or after July 1, 1996.
| ||||||
6 | If the purchaser is not the manufacturer or a graphic arts | ||||||
7 | producer, but
rents or
leases the use of the property to a | ||||||
8 | manufacturer or a graphic arts
producer,
the purchaser may | ||||||
9 | earn, report, and use
Manufacturer's
Purchase Credit in the | ||||||
10 | same manner as a manufacturer or graphic arts
producer.
| ||||||
11 | A purchaser shall not be entitled to any Manufacturer's | ||||||
12 | Purchase
Credit for a purchase that is required to be reported | ||||||
13 | and is not timely
reported as
provided in this Section. A | ||||||
14 | purchaser remains liable for (i) any
tax that was satisfied by | ||||||
15 | use of a Manufacturer's Purchase Credit, as of the
date of | ||||||
16 | purchase, if that use is not timely reported as required in | ||||||
17 | this
Section and (ii) for any applicable penalties and interest | ||||||
18 | for failing to pay
the tax when due. No Manufacturer's Purchase | ||||||
19 | Credit may be used after
September 30, 2003 to
satisfy any
tax | ||||||
20 | liability imposed under this Act, including any audit | ||||||
21 | liability.
| ||||||
22 | (b) Manufacturer's Purchase Credit earned on and after | ||||||
23 | September 1, 2004. This subsection (b) applies to | ||||||
24 | Manufacturer's Purchase Credit earned on or after September 1, | ||||||
25 | 2004. Manufacturer's Purchase Credit earned on or after | ||||||
26 | September 1, 2004 may only be used to satisfy the Use Tax or |
| |||||||
| |||||||
1 | Service Use Tax liability incurred on production related | ||||||
2 | tangible personal property purchased on or after September 1, | ||||||
3 | 2004. A purchaser of production related tangible personal | ||||||
4 | property desiring to use the Manufacturer's Purchase Credit | ||||||
5 | shall certify to the seller that the purchaser is satisfying | ||||||
6 | all or part of the liability under the Use Tax Act or the | ||||||
7 | Service Use Tax Act that is due on the purchase of the | ||||||
8 | production related tangible personal property by use of a | ||||||
9 | Manufacturer's Purchase Credit. The Manufacturer's Purchase | ||||||
10 | Credit certification must be dated and shall include the name | ||||||
11 | and address of the purchaser, the purchaser's registration | ||||||
12 | number, if registered, the credit being applied, and a | ||||||
13 | statement that the State Use Tax or Service Use Tax liability | ||||||
14 | is being satisfied with the manufacturer's or graphic arts | ||||||
15 | producer's accumulated purchase credit. Certification may be | ||||||
16 | incorporated into the manufacturer's or graphic arts | ||||||
17 | producer's purchase order. Manufacturer's Purchase Credit | ||||||
18 | certification provided by the manufacturer or graphic arts | ||||||
19 | producer may be used to satisfy the retailer's or serviceman's | ||||||
20 | liability under the Retailers' Occupation Tax Act or Service | ||||||
21 | Occupation Tax Act for the credit claimed, not to exceed 6.25% | ||||||
22 | of the receipts subject to tax from a qualifying purchase, but | ||||||
23 | only if the retailer or serviceman reports the Manufacturer's | ||||||
24 | Purchase Credit claimed as required by the Department. The | ||||||
25 | Manufacturer's Purchase Credit earned by purchase of exempt | ||||||
26 | manufacturing machinery and equipment or graphic arts |
| |||||||
| |||||||
1 | machinery and equipment is a non-transferable credit. A | ||||||
2 | manufacturer or graphic arts producer that enters into a | ||||||
3 | contract involving the installation of tangible personal | ||||||
4 | property into real estate within a manufacturing or graphic | ||||||
5 | arts production facility may, on or after September 1, 2004, | ||||||
6 | authorize a construction contractor to utilize credit | ||||||
7 | accumulated by the manufacturer or graphic arts producer to | ||||||
8 | purchase the tangible personal property. A manufacturer or | ||||||
9 | graphic arts producer intending to use accumulated credit to | ||||||
10 | purchase such tangible personal property shall execute a | ||||||
11 | written contract authorizing the contractor to utilize a | ||||||
12 | specified dollar amount of credit. The contractor shall furnish | ||||||
13 | the supplier with the manufacturer's or graphic arts producer's | ||||||
14 | name, registration or resale number, and a statement that a | ||||||
15 | specific amount of the Use Tax or Service Use Tax liability, | ||||||
16 | not to exceed 6.25% of the selling price, is being satisfied | ||||||
17 | with the credit. The manufacturer or graphic arts producer | ||||||
18 | shall remain liable to timely report all information required | ||||||
19 | by the annual Report of Manufacturer's Purchase Credit Used for | ||||||
20 | credit utilized by a construction contractor. | ||||||
21 | The Manufacturer's Purchase Credit may be used to satisfy | ||||||
22 | liability under the Use Tax Act or the Service Use Tax Act due | ||||||
23 | on the purchase, made on or after September 1, 2004, of | ||||||
24 | production related tangible personal property (including | ||||||
25 | purchases by a manufacturer, by a graphic arts producer, or a | ||||||
26 | lessor who rents or leases the use of the property to a |
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1 | manufacturer or graphic arts producer) that does not otherwise | ||||||
2 | qualify for the manufacturing machinery and equipment | ||||||
3 | exemption or the graphic arts machinery and equipment | ||||||
4 | exemption. "Production related tangible personal property" | ||||||
5 | means (i) all tangible personal property used or consumed by | ||||||
6 | the purchaser in a manufacturing facility in which a | ||||||
7 | manufacturing process described in Section 2-45 of the | ||||||
8 | Retailers' Occupation Tax Act takes place, including tangible | ||||||
9 | personal property purchased for incorporation into real estate | ||||||
10 | within a manufacturing facility and including, but not limited | ||||||
11 | to, tangible personal property used or consumed in activities | ||||||
12 | such as pre-production material handling, receiving, quality | ||||||
13 | control, inventory control, storage, staging, and packaging | ||||||
14 | for shipping and transportation purposes; (ii) all tangible | ||||||
15 | personal property used or consumed by the purchaser in a | ||||||
16 | graphic arts facility in which graphic arts production as | ||||||
17 | described in Section 2-30 of the Retailers' Occupation Tax Act | ||||||
18 | takes place, including tangible personal property purchased | ||||||
19 | for incorporation into real estate within a graphic arts | ||||||
20 | facility and including, but not limited to, all tangible | ||||||
21 | personal property used or consumed in activities such as | ||||||
22 | graphic arts preliminary or pre-press production, | ||||||
23 | pre-production material handling, receiving, quality control, | ||||||
24 | inventory control, storage, staging, sorting, labeling, | ||||||
25 | mailing, tying, wrapping, and packaging; and (iii) all tangible | ||||||
26 | personal property used or consumed by the purchaser for |
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1 | research and development. "Production related tangible | ||||||
2 | personal property" does not include (i) tangible personal | ||||||
3 | property used, within or without a manufacturing or graphic | ||||||
4 | arts facility, in sales, purchasing, accounting, fiscal | ||||||
5 | management, marketing, personnel recruitment or selection, or | ||||||
6 | landscaping or (ii) tangible personal property required to be | ||||||
7 | titled or registered with a department, agency, or unit of | ||||||
8 | federal, state, or local government. The Manufacturer's | ||||||
9 | Purchase Credit may be used to satisfy the tax arising either | ||||||
10 | from the purchase of machinery and equipment on or after | ||||||
11 | September 1, 2004 for which the manufacturing machinery and | ||||||
12 | equipment exemption provided by Section 2 of this Act was | ||||||
13 | erroneously claimed, or the purchase of machinery and equipment | ||||||
14 | on or after September 1, 2004 for which the exemption provided | ||||||
15 | by paragraph (5) of Section 3-5 of this Act was erroneously | ||||||
16 | claimed, but not in satisfaction of penalty, if any, and | ||||||
17 | interest for failure to pay the tax when due. A purchaser of | ||||||
18 | production related tangible personal property that is | ||||||
19 | purchased on or after September 1, 2004 who is required to pay | ||||||
20 | Illinois Use Tax or Service Use Tax on the purchase directly to | ||||||
21 | the Department may utilize the Manufacturer's Purchase Credit | ||||||
22 | in satisfaction of the tax arising from that purchase, but not | ||||||
23 | in satisfaction of penalty and interest. A purchaser who uses | ||||||
24 | the Manufacturer's Purchase Credit to purchase property on and | ||||||
25 | after September 1, 2004 which is later determined not to be | ||||||
26 | production related tangible personal property may be liable for |
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1 | tax, penalty, and interest on the purchase of that property as | ||||||
2 | of the date of purchase but shall be entitled to use the | ||||||
3 | disallowed Manufacturer's Purchase Credit, so long as it has | ||||||
4 | not expired, on qualifying purchases of production related | ||||||
5 | tangible personal property not previously subject to credit | ||||||
6 | usage. The Manufacturer's Purchase Credit earned by a | ||||||
7 | manufacturer or graphic arts producer expires the last day of | ||||||
8 | the second calendar year following the calendar year in which | ||||||
9 | the credit arose. | ||||||
10 | A purchaser earning Manufacturer's Purchase Credit shall | ||||||
11 | sign and file an annual Report of Manufacturer's Purchase | ||||||
12 | Credit Earned for each calendar year no later than the last day | ||||||
13 | of the sixth month following the calendar year in which a | ||||||
14 | Manufacturer's Purchase Credit is earned. A Report of | ||||||
15 | Manufacturer's Purchase Credit Earned shall be filed on forms | ||||||
16 | as prescribed or approved by the Department and shall state, | ||||||
17 | for each month of the calendar year: (i) the total purchase | ||||||
18 | price of all purchases of exempt manufacturing or graphic arts | ||||||
19 | machinery on which the credit was earned; (ii) the total State | ||||||
20 | Use Tax or Service Use Tax which would have been due on those | ||||||
21 | items; (iii) the percentage used to calculate the amount of | ||||||
22 | credit earned; (iv) the amount of credit earned; and (v) such | ||||||
23 | other information as the Department may reasonably require. A | ||||||
24 | purchaser earning Manufacturer's Purchase Credit shall | ||||||
25 | maintain records which identify, as to each purchase of | ||||||
26 | manufacturing or graphic arts machinery and equipment on which |
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1 | the purchaser earned Manufacturer's Purchase Credit, the | ||||||
2 | vendor (including, if applicable, either the vendor's | ||||||
3 | registration number or Federal Employer Identification | ||||||
4 | Number), the purchase price, and the amount of Manufacturer's | ||||||
5 | Purchase Credit earned on each purchase. | ||||||
6 | A purchaser using Manufacturer's Purchase Credit shall | ||||||
7 | sign and file an annual Report of Manufacturer's Purchase | ||||||
8 | Credit Used for each calendar year no later than the last day | ||||||
9 | of the sixth month following the calendar year in which a | ||||||
10 | Manufacturer's Purchase Credit is used. A Report of | ||||||
11 | Manufacturer's Purchase Credit Used shall be filed on forms as | ||||||
12 | prescribed or approved by the Department and shall state, for | ||||||
13 | each month of the calendar year: (i) the total purchase price | ||||||
14 | of production related tangible personal property purchased | ||||||
15 | from Illinois suppliers; (ii) the total purchase price of | ||||||
16 | production related tangible personal property purchased from | ||||||
17 | out-of-state suppliers; (iii) the total amount of credit used | ||||||
18 | during such month; and (iv) such other information as the | ||||||
19 | Department may reasonably require. A purchaser using | ||||||
20 | Manufacturer's Purchase Credit shall maintain records that | ||||||
21 | identify, as to each purchase of production related tangible | ||||||
22 | personal property on which the purchaser used Manufacturer's | ||||||
23 | Purchase Credit, the vendor (including, if applicable, either | ||||||
24 | the vendor's registration number or Federal Employer | ||||||
25 | Identification Number), the purchase price, and the amount of | ||||||
26 | Manufacturer's Purchase Credit used on each purchase. |
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1 | A purchaser that fails to file an annual Report of | ||||||
2 | Manufacturer's Purchase Credit Earned or an annual Report of | ||||||
3 | Manufacturer's Purchase Credit Used by the last day of the | ||||||
4 | sixth month following the end of the calendar year shall | ||||||
5 | forfeit all Manufacturer's Purchase Credit for that calendar | ||||||
6 | year unless it establishes that its failure to file was due to | ||||||
7 | reasonable cause. Manufacturer's Purchase Credit reports may | ||||||
8 | be amended to report and claim credit on qualifying purchases | ||||||
9 | not previously reported at any time before the credit would | ||||||
10 | have expired, unless both the Department and the purchaser have | ||||||
11 | agreed to an extension of the statute of limitations for the | ||||||
12 | issuance of a notice of tax liability as provided in Section 4 | ||||||
13 | of the Retailers' Occupation Tax Act. If the time for | ||||||
14 | assessment or refund has been extended, then amended reports | ||||||
15 | for a calendar year may be filed at any time prior to the date | ||||||
16 | to which the statute of limitations for the calendar year or | ||||||
17 | portion thereof has been extended. Manufacturer's Purchase | ||||||
18 | Credit claimed on an amended report may be used to satisfy tax | ||||||
19 | liability under the Use Tax Act or the Service Use Tax Act (i) | ||||||
20 | on qualifying purchases of production related tangible | ||||||
21 | personal property made after the date the amended report is | ||||||
22 | filed or (ii) assessed by the Department on qualifying | ||||||
23 | production related tangible personal property purchased on or | ||||||
24 | after September 1, 2004. | ||||||
25 | If the purchaser is not the manufacturer or a graphic arts | ||||||
26 | producer, but rents or leases the use of the property to a |
| |||||||
| |||||||
1 | manufacturer or a graphic arts producer, the purchaser may | ||||||
2 | earn, report, and use Manufacturer's Purchase Credit in the | ||||||
3 | same manner as a manufacturer or graphic arts producer.
A | ||||||
4 | purchaser shall not be entitled to any Manufacturer's Purchase | ||||||
5 | Credit for a purchase that is required to be reported and is | ||||||
6 | not timely reported as provided in this Section. A purchaser | ||||||
7 | remains liable for (i) any tax that was satisfied by use of a | ||||||
8 | Manufacturer's Purchase Credit, as of the date of purchase, if | ||||||
9 | that use is not timely reported as required in this Section and | ||||||
10 | (ii) for any applicable penalties and interest for failing to | ||||||
11 | pay the tax when due.
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12 | (Source: P.A. 96-116, eff. 7-31-09.)
| ||||||
13 | Section 99. Effective date. This Act takes effect upon | ||||||
14 | becoming law.
|