SB1434ham001 100TH GENERAL ASSEMBLY

Rep. Jay Hoffman

Filed: 5/23/2017

10000SB1434ham001 LRB100 06488 HLH 26905 a

AMENDMENT TO SENATE BILL 1434

AMENDMENT NO. ______. Amend Senate Bill 1434 by replacing line 8 on page 3 through line 3 on page 7 with the following:

"Section 10. Rental Purchase Agreement Occupation Tax. A tax is imposed upon persons engaged in this State in the business of renting merchandise under a rental-purchase agreement in Illinois at the rate of 6.25% of the gross receipts received from the business. Every person engaged in this State in the business of renting merchandise shall apply to the Department (upon a form prescribed and furnished by the Department) for a certificate of registration under this Act. The certificate of registration which is issued by the Department to a retailer under the Retailers' Occupation Tax Act shall permit the merchant to engage in a business that is taxable under this Section without registering separately with the Department.

The Department shall have full power to administer and enforce this Section, to collect all taxes and penalties due hereunder, to dispose of taxes and penalties so collected in the manner hereinafter provided, and to determine all rights to credit memoranda, arising on account of the erroneous payment of tax or penalty hereunder. In the administration of, and compliance with, this Section, the Department and persons who are subject to this Section shall have the same rights, remedies, privileges, immunities, powers and duties, and be subject to the same conditions, restrictions, limitations, penalties and definitions of terms, and employ the same modes of procedure, as are prescribed in Sections 1, 1a, 2, 2-10 through 2-65 (in respect to all provisions therein other than the State rate of tax), 2a, 2b, 2c, 3 (except provisions relating to transaction returns), 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i, 5j, 6, 6a, 6b, 6c, 7, 8, 9, 10, 11, 11a, 12, and 13 of the Retailers' Occupation Tax Act and Section 3-7 of the Uniform Penalty and Interest Act as fully as if those provisions were set forth herein.

Section 15. Rental Purchase Agreement Use Tax. A tax is imposed upon the privilege of using, in this State, merchandise which is rented from a merchant. Such tax is at the rate of 6.25% of the rental price paid to the merchant under any rental purchase agreement.

The tax hereby imposed shall be collected from the consumer by a merchant maintaining a place of business in this State and remitted to the Department.

The tax hereby imposed and not paid to a merchant pursuant to the preceding paragraph of this Section shall be paid to the Department directly by any person using such merchandise within this State.

Merchants shall collect the tax from consumers by adding the tax to the rental price of the merchandise, when rented for use, in the manner prescribed by the Department. The Department shall have the power to adopt and promulgate reasonable rules and regulations for the adding of such tax by merchants to rental prices by prescribing bracket systems for the purpose of enabling such merchants to add and collect, as far as practicable, the amount of such tax.

The tax imposed by this Section shall, when collected, be stated as a distinct item separate and apart from the rental price of the merchandise.

The Department shall have full power to administer and enforce this Section; to collect all taxes, penalties and interest due hereunder; to dispose of taxes, penalties and interest so collected in the manner hereinafter provided, and to determine all rights to credit memoranda or refunds arising on account of the erroneous payment of tax, penalty or interest hereunder. In the administration of, and compliance with, this Section, the Department and persons who are subject to this Section shall have the same rights, remedies, privileges, immunities, powers, and duties, and be subject to the same conditions, restrictions, limitations, penalties, and definitions of terms, and employ the same modes of procedure, as are prescribed in Sections 2, 3, 3-10 through 3-80, 4, 6, 7, 8, 9 (except provisions relating to transaction returns ), 10, 11, 12, 12a, 12b, 13, 14, 15, 19, 20, 21, and 22 of the Use Tax Act, and are not inconsistent with this Section, as fully as if those provisions were set forth herein.

Section 20. Electronic filing and payment. Any return or document that is required to be filed under this Act shall be filed electronically, in the form and manner required by the Department.

Any payment required to be made under this Act shall be paid electronically, in the form and manner required by the Department.

The Department shall grant a waiver of the electronic filing or payment requirement under this Section for any taxpayer who petitions the Department and demonstrates undue hardship in complying with the electronic filing or payment requirement. The waiver shall be for a period not to exceed 2 years, but may be renewed an unlimited number of times for periods not to exceed 2 years each.

Section 25. Deposit of taxes.

(a) Each month, from the net revenue realized for the preceding month, the Department shall pay an amount estimated by the Department to be required for refunds of the tax under this Act, which shall be deposited into the Rental Purchase Agreement Tax Refund Fund.

(b) Of the remainder of funds after the deposit under subsection (a) of this Section:

(1) each month the Department shall pay into the State and Local Sales Tax Reform Fund 20% of the net revenue realized for the preceding month from the tax imposed under this Act; and

(2) each month the Department shall pay into the General Revenue Fund 80% of the net revenue realized for the preceding month from the tax imposed under this Act.

Section 30. One-Time Transitional Use Tax Credit. Within 3 months after effective date of this Act, the merchant shall file an application (upon a form prescribed and furnished by the Department) to receive a one-time credit for the Use Tax paid on merchandise subject to tax under this Act purchased during the 6 months immediately prior to the effective date of this Act. The Department shall issue a credit equal to the total Use Tax paid in the 6 months immediately prior to the effective date of this Act. Upon the issuance of the credit, the merchant may apply the credit against the tax imposed under this Act.

Section 35. Applicability. This Act does not apply to tangible personal property which is required to be titled and registered by a State agency.

Section 40. Rulemaking. The Department may make such rules as it may deem necessary to implement the purposes of this Act.

Section 45. The State Finance Act is amended by adding Sections 5.878 and 6z-102 as follows:

(30 ILCS 105/5.878 new)

Sec. 5.878. The Rental Purchase Agreement Tax Refund Fund.

(30 ILCS 105/6z-102 new)

Sec. 6z-102. The Rental Purchase Agreement Tax Refund Fund.

(a) The Rental Purchase Agreement Tax Refund Fund is hereby created as a special fund in the State Treasury. Moneys in the Fund shall be used by the Department of Revenue to pay refunds of Rental Purchase Agreement Tax in the manner provided in Section 6 of the Retailers' Occupation Tax Act and Section 19 of the Use Tax Act, as incorporated into Sections 10 and 15 of the Rental Purchase Agreement Tax Act.

(b) Moneys in the Rental Purchase Agreement Tax Refund Fund shall be expended exclusively for the purpose of paying refunds pursuant to this Section.

(c) The Director of Revenue shall order payment of refunds under this Section from the Rental Purchase Agreement Tax Refund Fund only to the extent that amounts collected pursuant to Sections 10 and 15 of the Rental Purchase Agreement Occupation and Use Tax Act have been deposited and retained in the Fund.

As soon as possible after the end of each fiscal year, the Director of Revenue shall order transferred, and the State Treasurer and State Comptroller shall transfer from the Rental Purchase Agreement Tax Refund Fund to the General Revenue Fund, any surplus remaining as of the end of such fiscal year. This Section shall constitute an irrevocable and continuing appropriation from the Rental Purchase Agreement Tax Refund Fund for the purpose of paying refunds in accordance with the provisions of this Section.".