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| Public Act 100-1006 | ||||
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AN ACT concerning revenue.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Illinois Hydraulic Fracturing Tax Act is | ||||
amended by changing Section 2-30 as follows: | ||||
(35 ILCS 450/2-30)
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Sec. 2-30. Payment and collection of tax. | ||||
(a) For oil and gas removed on or after July 1, 2013, the | ||||
tax incurred under this Act shall be due and payable on or | ||||
before the last day of the month following the end of the month | ||||
in which the oil or gas is removed from the production unit. | ||||
The tax is upon the producers of such oil or gas in the | ||||
proportion to their respective beneficial interests at the time | ||||
of severance. The first purchaser of any oil or gas sold shall | ||||
collect the amount of the tax due from the producers by | ||||
deducting and withholding such amount from any payments made by | ||||
such purchaser to the producers and shall remit the tax in this | ||||
Act. | ||||
In the event the tax shall be withheld by a purchaser from | ||||
payments due a producer and such purchaser fails to make | ||||
payment of the tax to the State as required herein, the first | ||||
purchaser shall be liable for the tax. However, in the event a | ||||
first purchaser fails to pay the tax withheld from a producer's | ||||
payment, the producer's interest remains subject to any lien | ||
filed pursuant to subsection (c) of this Section. A producer | ||
shall be entitled to bring an action against such purchaser to | ||
recover the amount of tax so withheld together with penalties | ||
and interest which may have accrued by failure to make such | ||
payment. A producer shall be entitled to all attorney fees and | ||
court costs incurred in such action. To the extent that a | ||
producer liable for the tax imposed by this Act collects the | ||
tax, and any penalties and interest, from a purchaser, such | ||
tax, penalties, and interest are held in trust by the producer | ||
for the benefit of the State of Illinois. | ||
(b) For all production units a first purchaser begins to | ||
purchase oil or gas from on or after July 1, 2013, the first | ||
purchaser is required to withhold and remit the tax imposed by | ||
this Act to the Department from the oil and gas purchased from | ||
the production unit unless the first purchaser obtains from the | ||
operator an exemption certificate signed by the operator | ||
stating that the production unit is not subject to the tax | ||
imposed by this Act. The exemption certificate must include the | ||
following information: | ||
(1) name and address of the operator; | ||
(2) name of the production unit; | ||
(3) number assigned to the production unit by the first | ||
purchaser, if available; | ||
(4) legal description of the production unit; and | ||
(5) a statement by the operator that the production | ||
unit is exempt from the tax imposed by the Illinois | ||
Hydraulic Fracturing Tax Act. | ||
If a first purchaser obtains an exemption certificate that | ||
contains the required information and reasonably relies on the | ||
exemption certificate and it is subsequently determined by the | ||
Department that the production unit is subject to the tax | ||
imposed by this Act, the Department will collect any tax that | ||
is due from the operator and producers, and the first purchaser | ||
is relieved of any liability. | ||
First purchasers shall not be required to obtain exemption | ||
certificates from the operator until the first high volume | ||
horizontal hydraulic fracturing permit has been approved by the | ||
Department of Natural Resources after the effective date of | ||
this amendatory Act of the 100th General Assembly. | ||
(c) Notwithstanding subsection (a) of this Section, the tax | ||
is a lien on the oil and gas from the time of severance from the | ||
land or under the water until the tax and all penalties and | ||
interest are fully paid, and the State shall have a lien on all | ||
the oil or gas severed from the production unit in this State | ||
in the hands of the operator, any producer or the first or any | ||
subsequent purchaser thereof to secure the payment of the tax. | ||
If a lien is filed by the Department, the purchaser shall | ||
withhold from producers or operators the amount of tax, penalty | ||
and interest identified in the lien.
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(Source: P.A. 98-22, eff. 6-17-13.)
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