SB1418 96TH GENERAL ASSEMBLY

SRS096 00005 NAD 10005 b

96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
SB1418

Introduced 2/11/2009, by Sen. Tim Bivins

SYNOPSIS AS INTRODUCED:

35 ILCS 105/3b new
35 ILCS 120/2-75 new

Amends the Use Tax Act and the Retailers' Occupation Tax Act. Provides that no tax is imposed under the Acts upon the privilege of using in this State (for the Use Tax Act) or persons engaged in the business of selling at retail (for the Retailers' Occupation Tax Act) qualified merchandise that is purchased from 12:01 a.m. on the first Friday in August through midnight of the Sunday that follows 9 days later. Defines "qualified merchandise" as school supplies and any article of clothing or footwear or a computer that is sold at or below certain selling prices. Sets forth criteria for transactions to qualify for the exemption. Effective immediately.

A BILL FOR

AN ACT concerning revenue.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Use Tax Act is amended by adding Section 3b as follows:

(35 ILCS 105/3b new)

Sec. 3b. Back-To-School Tax Holiday.

(a) No tax is imposed under this Act upon the privilege of using, in this State, qualified merchandise that is purchased at retail from a retailer if the qualified merchandise is purchased during the holiday period.

(b) For the purpose of this Section:

"Holiday period" means the period from 12:01 a.m. on the first Friday in August through midnight of the following Sunday.

"Qualified merchandise" means:

(1) school supplies;

(2) an article of clothing or footwear that is purchased for a selling price of $200 or less; and

(3) a computer that is purchased for a selling price of $3,000 or less.

"Clothing or footwear" means an article of apparel designed to be worn about the human body. The term does not include accessories such as jewelry, handbags, purses, briefcases, luggage, wallets, watches, and similar items that are carried on or about the human body, without regard to whether the item is worn on the body in a manner that is characteristic of clothing.

"Computer" means a central processing unit for personal use plus any peripheral sold with it and any computer software installed in it at the time of purchase. The term "computer" includes desktop computers, laptop computers, hand-held computers, and personal digital assistants. The term "computer" does not include any device designed primarily for video game applications. The term "peripheral" includes any monitor, keyboard, printer, scanner, web/PC camera, microphone, external drive, network card, internal drive, and additional storage.

"School supplies" means pens, pencils, erasers, crayons, notebooks, notebook filler paper, legal pads, composition books, poster paper, scissors, cellophane tape, glue or paste, rulers, protractors, compasses, calculators, and similar items commonly used by students for school purposes.

(c) For the purpose of this Section, a "purchase" occurs during the tax holiday if the buyer places an order and pays the purchase price by cash or credit during the tax holiday period regardless of whether the delivery of the item occurs after the tax holiday period.

An item of qualified merchandise that is placed in a layaway or similar deferred plan during the holiday period is not eligible for the exemption unless the item is delivered to the purchaser during the period. An item that was placed in a layaway or similar deferred plan before the holiday period and is then delivered to the purchaser during the holiday period is eligible for the exemption.

(d) Any discount, coupon, or other credit offered either by the retailer or by a vendor of the retailer to reduce the final price to the customer must be taken into account in determining the selling price of the item for the purposes of this holiday. If the price of an item is free or reduced with the purchase of another item, then the total price of the items may not be averaged in order for both items to qualify for the holiday.

The amount of any rebate may not be considered when determining the selling price of the item for the purposes of this holiday.

(e) Articles that are normally sold as a unit must continue to be sold in that manner; they may not be priced separately and sold as individual items in order to be subject to the holiday. For example, if a pair of shoes sells for $220, the pair cannot be split in order to sell each shoe for $110 to qualify for the holiday. If a uniform is normally priced at $250 on a single price tag, the uniform cannot be split into separate articles so that any of the components may be sold for less than $200 in order to qualify for the holiday. Components that are normally priced as separate articles, however, may continue to be sold as separate articles.

(f) Qualified merchandise that customers purchase during the holiday period with the use of a rain check qualify for the holiday regardless of when the rain check was issued. The issuance of a rain check, however, during the holiday period does not qualify merchandise for the exemption if the merchandise is actually purchased after the holiday period.

(g) If a customer purchases an item of qualified merchandise during the holiday period but later exchanges the item for a substantially similar item of a different size, different color, or other feature, then no additional tax is due even if the exchange is made after the holiday period.

If a customer purchases an item of qualified merchandise during the holiday period, but after the holiday period has ended, the customer returns the item and receives credit on the purchase of a different item, then the newly purchased item is subject to the full tax rate.

If a customer purchases an item of qualified merchandise before the holiday period, but during the holiday period, the customer returns the item and receives credit on the purchase of a different item of qualified merchandise, then the newly purchased item is subject to the exemption.

(h) Each unit of local government that imposes a use tax may, by resolution or ordinance, declare a tax holiday with respect to its use tax for the same items, during the same periods, and under the same conditions and is encouraged to do so.

Section 10. The Retailers' Occupation Tax Act is amended by adding Section 2-75 as follows:

(35 ILCS 120/2-75 new)

Sec. 2-75. Back-To-School Tax Holiday.

(a) No tax is imposed under this Act upon persons engaged in the business of selling, at retail, qualified merchandise if the qualified merchandise is purchased during the holiday period.

(b) For the purpose of this Section:

"Holiday period" means the period from 12:01 a.m. on the first Friday in August through midnight of the following Sunday.

"Qualified merchandise" means:

(1) school supplies;

(2) an article of clothing or footwear that is purchased for a selling price of $200 or less; and

(3) a computer that is purchased for a selling price of $3,000 or less.

"Clothing or footwear" means an article of apparel designed to be worn about the human body. The term does not include accessories such as jewelry, handbags, purses, briefcases, luggage, wallets, watches, and similar items that are carried on or about the human body, without regard to whether the item is worn on the body in a manner that is characteristic of clothing.

"Computer" means a central processing unit for personal use plus any peripheral sold with it and any computer software installed in it at the time of purchase. The term "computer" includes desktop computers, laptop computers, hand-held computers, and personal digital assistants. The term "computer" does not include any device designed primarily for video game applications. The term "peripheral" includes any monitor, keyboard, printer, scanner, web/PC camera, microphone, external drive, network card, internal drive, and additional storage.

"School supplies" means pens, pencils, erasers, crayons, notebooks, notebook filler paper, legal pads, composition books, poster paper, scissors, cellophane tape, glue or paste, rulers, protractors, compasses, calculators, and similar items commonly used by students for school purposes.

(c) For the purpose of this Section, a "purchase" occurs during the tax holiday if the buyer places an order and pays the purchase price by cash or credit during the tax holiday period regardless of whether the delivery of the item occurs after the tax holiday period.

An item of qualified merchandise that is placed in a layaway or similar deferred plan during the holiday period is not eligible for the exemption unless the item is delivered to the purchaser during the period. An item that was placed in a layaway or similar deferred plan before the holiday period and is then delivered to the purchaser during the holiday period is eligible for the exemption.

(d) Any discount, coupon, or other credit offered either by the retailer or by a vendor of the retailer to reduce the final price to the customer must be taken into account in determining the selling price of the item for the purposes of this holiday. If the price of an item is free or reduced with the purchase of another item, then the total price of the items may not be averaged in order for both items to qualify for the holiday.

The amount of any rebate may not be considered when determining the selling price of the item for the purposes of this holiday.

(e) Articles that are normally sold as a unit must continue to be sold in that manner; they may not be priced separately and sold as individual items in order to be subject to the holiday. For example, if a pair of shoes sells for $220, the pair cannot be split in order to sell each shoe for $110 to qualify for the holiday. If a uniform is normally priced at $250 on a single price tag, the uniform cannot be split into separate articles so that any of the components may be sold for less than $200 in order to qualify for the holiday. Components that are normally priced as separate articles, however, may continue to be sold as separate articles.

(f) Qualified merchandise that customers purchase during the holiday period with the use of a rain check qualify for the holiday regardless of when the rain check was issued. The issuance of a rain check, however, during the holiday period does not qualify merchandise for the exemption if the merchandise is actually purchased after the holiday period.

(g) If a customer purchases an item of qualified merchandise during the holiday period but later exchanges the item for a substantially similar item of a different size, different color, or other feature, then no additional tax is due even if the exchange is made after the holiday period.

If a customer purchases an item of qualified merchandise during the holiday period, but after the holiday period has ended, the customer returns the item and receives credit on the purchase of a different item, then the newly purchased item is subject to the full tax rate.

If a customer purchases an item of qualified merchandise before the holiday period, but during the holiday period, the customer returns the item and receives credit on the purchase of a different item of qualified merchandise, then the newly purchased item is subject to the exemption.

(h) Each unit of local government that imposes a retailers' occupation tax may, by resolution or ordinance, declare a tax holiday with respect to its use tax for the same items, during the same periods, and under the same conditions and is encouraged to do so.

Section 99. Effective date. This Act takes effect upon becoming law.