Bill Text: IL SB3563 | 2019-2020 | 101st General Assembly | Introduced

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Bill Title: Amends the Motor Fuel Tax Law. In a provision concerning refunds, allows claims for taxes paid for undyed diesel fuel used by vehicles operated by a municipal fire department or a fire protection district recognized by the Office of the State Fire Marshal. Effective immediately.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2021-01-13 - Session Sine Die [SB3563 Detail]

Download: Illinois-2019-SB3563-Introduced.html

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101ST GENERAL ASSEMBLY State of Illinois 2019 and 2020 SB3563 Introduced 2/13/2020, by Sen. John F. Curran SYNOPSIS AS INTRODUCED:
35 ILCS 505/13 from Ch. 120, par. 429
Amends the Motor Fuel Tax Law. In a provision concerning refunds, allows claims for taxes paid for undyed diesel fuel used by vehicles operated by a municipal fire department or a fire protection district recognized by the Office of the State Fire Marshal. Effective immediately.
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FISCAL NOTE ACT MAY APPLY
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 Motor Fuel Tax Law is amended by changing
Section 13 as follows:
(35 ILCS 505/13) (from Ch. 120, par. 429)
Sec. 13. Refund of tax paid. Any person other than a
distributor or supplier, who loses motor fuel through any cause
or uses motor fuel (upon which he has paid the amount required
to be collected under Section 2 of this Act) for any purpose
other than operating a motor vehicle upon the public highways
or waters, shall be reimbursed and repaid the amount so paid.
Any person who purchases motor fuel in Illinois and uses
that motor fuel in another state and that other state imposes a
tax on the use of such motor fuel shall be reimbursed and
repaid the amount of Illinois tax paid under Section 2 of this
Act on the motor fuel used in such other state. Reimbursement
and repayment shall be made by the Department upon receipt of
adequate proof of taxes directly paid to another state and the
amount of motor fuel used in that state.
Claims based in whole or in part on taxes paid to another
state shall include (i) a certified copy of the tax return
filed with such other state by the claimant; (ii) a copy of

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either the cancelled check paying the tax due on such return,
or a receipt acknowledging payment of the tax due on such tax
return; and (iii) such other information as the Department may
reasonably require. This paragraph shall not apply to taxes
paid on returns filed under Section 13a.3 of this Act.
Any person who purchases motor fuel use tax decals as
required by Section 13a.4 and pays an amount of fees for such
decals that exceeds the amount due shall be reimbursed and
repaid the amount of the decal fees that are deemed by the
department to be in excess of the amount due. Alternatively,
any person who purchases motor fuel use tax decals as required
by Section 13a.4 may credit any excess decal payment verified
by the Department against amounts subsequently due for the
purchase of additional decals, until such time as no excess
payment remains.
Claims for such reimbursement must be made to the
Department of Revenue, duly verified by the claimant (or by the
claimant's legal representative if the claimant has died or
become a person under legal disability), upon forms prescribed
by the Department. The claim must state such facts relating to
the purchase, importation, manufacture or production of the
motor fuel by the claimant as the Department may deem
necessary, and the time when, and the circumstances of its loss
or the specific purpose for which it was used (as the case may
be), together with such other information as the Department may
reasonably require. No claim based upon idle time shall be

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allowed. Claims for reimbursement for overpayment of decal fees
shall be made to the Department of Revenue, duly verified by
the claimant (or by the claimant's legal representative if the
claimant has died or become a person under legal disability),
upon forms prescribed by the Department. The claim shall state
facts relating to the overpayment of decal fees, together with
such other information as the Department may reasonably
require. Claims for reimbursement of overpayment of decal fees
paid on or after January 1, 2011 must be filed not later than
one year after the date on which the fees were paid by the
claimant. If it is determined that the Department should
reimburse a claimant for overpayment of decal fees, the
Department shall first apply the amount of such refund against
any tax or penalty or interest due by the claimant under
Section 13a of this Act.
Claims for full reimbursement for taxes paid on or before
December 31, 1999 must be filed not later than one year after
the date on which the tax was paid by the claimant. If,
however, a claim for such reimbursement otherwise meeting the
requirements of this Section is filed more than one year but
less than 2 years after that date, the claimant shall be
reimbursed at the rate of 80% of the amount to which he would
have been entitled if his claim had been timely filed.
Claims for full reimbursement for taxes paid on or after
January 1, 2000 must be filed not later than 2 years after the
date on which the tax was paid by the claimant.

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The Department may make such investigation of the
correctness of the facts stated in such claims as it deems
necessary. When the Department has approved any such claim, it
shall pay to the claimant (or to the claimant's legal
representative, as such if the claimant has died or become a
person under legal disability) the reimbursement provided in
this Section, out of any moneys appropriated to it for that
purpose.
Any distributor or supplier who has paid the tax imposed by
Section 2 of this Act upon motor fuel lost or used by such
distributor or supplier for any purpose other than operating a
motor vehicle upon the public highways or waters may file a
claim for credit or refund to recover the amount so paid. Such
claims shall be filed on forms prescribed by the Department.
Such claims shall be made to the Department, duly verified by
the claimant (or by the claimant's legal representative if the
claimant has died or become a person under legal disability),
upon forms prescribed by the Department. The claim shall state
such facts relating to the purchase, importation, manufacture
or production of the motor fuel by the claimant as the
Department may deem necessary and the time when the loss or
nontaxable use occurred, and the circumstances of its loss or
the specific purpose for which it was used (as the case may
be), together with such other information as the Department may
reasonably require. Claims must be filed not later than one
year after the date on which the tax was paid by the claimant.

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The Department may make such investigation of the
correctness of the facts stated in such claims as it deems
necessary. When the Department approves a claim, the Department
shall issue a refund or credit memorandum as requested by the
taxpayer, to the distributor or supplier who made the payment
for which the refund or credit is being given or, if the
distributor or supplier has died or become incompetent, to such
distributor's or supplier's legal representative, as such. The
amount of such credit memorandum shall be credited against any
tax due or to become due under this Act from the distributor or
supplier who made the payment for which credit has been given.
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 distributor or supplier requests and 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.
In any case in which there has been an erroneous refund of
tax or fees payable under this Section, a notice of tax

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liability may be issued at any time within 3 years from the
making of that refund, or within 5 years from the making of
that refund if it appears that any part of the refund was
induced by fraud or the misrepresentation of material fact. The
amount of any proposed assessment set forth by the Department
shall be limited to the amount of the erroneous refund.
If no tax is due and no proceeding is pending to determine
whether such distributor or supplier is indebted to the
Department for tax, the credit memorandum so issued may be
assigned and set over by the lawful holder thereof, subject to
reasonable rules of the Department, to any other licensed
distributor or supplier who is subject to this Act, and the
amount thereof applied by the Department against any tax due or
to become due under this Act from such assignee.
If the payment for which the distributor's or supplier's
claim is filed is held in the protest fund of the State
Treasury during the pendency of the claim for credit
proceedings pursuant to the order of the court in accordance
with Section 2a of the State Officers and Employees Money
Disposition Act and if it is determined by the Department or by
the final order of a reviewing court under the Administrative
Review Law that the claimant is entitled to all or a part of
the credit claimed, the claimant, instead of receiving a credit
memorandum from the Department, shall receive a cash refund
from the protest fund as provided for in Section 2a of the
State Officers and Employees Money Disposition Act.

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If any person ceases to be licensed as a distributor or
supplier while still holding an unused credit memorandum issued
under this Act, such person may, at his election (instead of
assigning the credit memorandum to a licensed distributor or
licensed supplier under this Act), surrender such unused credit
memorandum to the Department and receive a refund of the amount
to which such person is entitled.
For claims based upon taxes paid on or before December 31,
2000, a claim based upon the use of undyed diesel fuel shall
not be allowed except (i) if allowed under the following
paragraph or (ii) for undyed diesel fuel used by a commercial
vehicle, as that term is defined in Section 1-111.8 of the
Illinois Vehicle Code, for any purpose other than operating the
commercial vehicle upon the public highways and unlicensed
commercial vehicles operating on private property. Claims
shall be limited to commercial vehicles that are operated for
both highway purposes and any purposes other than operating
such vehicles upon the public highways.
For claims based upon taxes paid on or after January 1,
2000, a claim based upon the use of undyed diesel fuel shall
not be allowed except (i) if allowed under the preceding
paragraph or (ii) for claims for the following:
(1) Undyed diesel fuel used (i) in a manufacturing
process, as defined in Section 2-45 of the Retailers'
Occupation Tax Act, wherein the undyed diesel fuel becomes
a component part of a product or by-product, other than

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fuel or motor fuel, when the use of dyed diesel fuel in
that manufacturing process results in a product that is
unsuitable for its intended use or (ii) for testing
machinery and equipment in a manufacturing process, as
defined in Section 2-45 of the Retailers' Occupation Tax
Act, wherein the testing takes place on private property.
(2) Undyed diesel fuel used by a manufacturer on
private property in the research and development, as
defined in Section 1.29, of machinery or equipment intended
for manufacture.
(3) Undyed diesel fuel used by a single unit
self-propelled agricultural fertilizer implement, designed
for on and off road use, equipped with flotation tires and
specially adapted for the application of plant food
materials or agricultural chemicals.
(4) Undyed diesel fuel used by a commercial motor
vehicle for any purpose other than operating the commercial
motor vehicle upon the public highways. Claims shall be
limited to commercial motor vehicles that are operated for
both highway purposes and any purposes other than operating
such vehicles upon the public highways.
(5) Undyed diesel fuel used by a unit of local
government in its operation of an airport if the undyed
diesel fuel is used directly in airport operations on
airport property.
(6) Undyed diesel fuel used by refrigeration units that

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are permanently mounted to a semitrailer, as defined in
Section 1.28 of this Law, wherein the refrigeration units
have a fuel supply system dedicated solely for the
operation of the refrigeration units.
(7) Undyed diesel fuel used by power take-off equipment
as defined in Section 1.27 of this Law.
(8) Beginning on the effective date of this amendatory
Act of the 94th General Assembly, undyed diesel fuel used
by tugs and spotter equipment to shift vehicles or parcels
on both private and airport property. Any claim under this
item (8) may be made only by a claimant that owns tugs and
spotter equipment and operates that equipment on both
private and airport property. The aggregate of all credits
or refunds resulting from claims filed under this item (8)
by a claimant in any calendar year may not exceed $100,000.
A claim may not be made under this item (8) by the same
claimant more often than once each quarter. For the
purposes of this item (8), "tug" means a vehicle designed
for use on airport property that shifts custom-designed
containers of parcels from loading docks to aircraft, and
"spotter equipment" means a vehicle designed for use on
both private and airport property that shifts trailers
containing parcels between staging areas and loading
docks.
(9) Beginning on the effective date of this amendatory
Act of the 101st General Assembly, undyed diesel fuel used

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by vehicles operated by a municipal fire department or a
fire protection district recognized by the Office of the
State Fire Marshal. A claim may not be made under this item
(9) by the same claimant more often than once each calendar
quarter.
Any person who has paid the tax imposed by Section 2 of
this Law upon undyed diesel fuel that is unintentionally mixed
with dyed diesel fuel and who owns or controls the mixture of
undyed diesel fuel and dyed diesel fuel may file a claim for
refund to recover the amount paid. The amount of undyed diesel
fuel unintentionally mixed must equal 500 gallons or more. Any
claim for refund of unintentionally mixed undyed diesel fuel
and dyed diesel fuel shall be supported by documentation
showing the date and location of the unintentional mixing, the
number of gallons involved, the disposition of the mixed diesel
fuel, and any other information that the Department may
reasonably require. Any unintentional mixture of undyed diesel
fuel and dyed diesel fuel shall be sold or used only for
non-highway purposes.
The Department shall promulgate regulations establishing
specific limits on the amount of undyed diesel fuel that may be
claimed for refund.
For purposes of claims for refund, "loss" means the
reduction of motor fuel resulting from fire, theft, spillage,
spoilage, leakage, or any other provable cause, but does not
include a reduction resulting from evaporation, or shrinkage

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due to temperature variations. In the case of losses due to
fire or theft, the claimant must include fire department or
police department reports and any other documentation that the
Department may require.
(Source: P.A. 100-1171, eff. 1-4-19.)
Section 99. Effective date. This Act takes effect upon
becoming law.