35 ILCS 171/ Simplified Sales and Use Tax Administration Act.

(35 ILCS 171/1)

Sec. 1. Short title. This Act may be cited as the Simplified Sales and Use Tax Administration Act.

(Source: P.A. 92-221, eff. 8-2-01.)

(35 ILCS 171/2)

Sec. 2. Definitions. As used in this Act:

(a) "Agreement" means the Streamlined Sales and Use Tax Agreement as amended and adopted on January 27, 2001.

(b) "Certified Automated System" means software certified jointly by the states that are signatories to the Agreement to calculate the tax imposed by each jurisdiction on a transaction, determine the amount of tax to remit to the appropriate state, and maintain a record of the transaction.

(c) "Certified Service Provider" means an agent certified jointly by the states that are signatories to the Agreement to perform all of the seller's sales tax functions.

(d) "Person" means an individual, trust, estate, fiduciary, partnership, limited liability company, limited liability partnership, corporation, or any other legal entity.

(e) "Sales Tax" means the tax levied under the Service Occupation Tax Act (35 ILCS 115/) and the Retailers' Occupation Tax Act (35 ILCS 120/). "Sales tax" also means any local sales tax levied under the Home Rule Municipal Retailers' Occupation Tax Act (65 ILCS 5/8-11-1), the Non-Home Rule Municipal Retailers' Occupation Tax Act (65 ILCS 5/8-11-1.3), the Non-Home Rule Municipal Service Occupation Tax Act (65 ILCS 5/8-11-1.4), the Home Rule Municipal Service Occupation Tax (65 ILCS 5/8-11-5), the Home Rule County Retailers' Occupation Tax Law (55 ILCS 5/5-1006), the Special County Occupation Tax for Public Safety, Public Facilities, Mental Health, Substance Abuse, or Transportation Law (55 ILCS 5/5-1006.5), the Home Rule County Service Occupation Tax Law (55 ILCS 5/5-1007), subsection (b) of the Rock Island County Use and Occupation Tax Law (55 ILCS 5/5-1008.5(b)), the Metro East Mass Transit District Retailers' Occupation Tax (70 ILCS 3610/5.01(b)), the Metro East Mass Transit District Service Occupation Tax (70 ILCS 3610/5.01(c)), the Regional Transportation Authority Retailers' Occupation Tax (70 ILCS 3615/4.03(e)), the Regional Transportation Authority Service Occupation Tax (70 ILCS 3615/4.03(f)), the County Water Commission Retailers' Occupation Tax (70 ILCS 3720/4(b)), or the County Water Commission Service Occupation Tax (70 ILCS 3720/4(c)).

(f) "Seller" means any person making sales of personal property or services.

(g) "State" means any state of the United States and the District of Columbia.

(h) "Use tax" means the tax levied under the Use Tax Act (35 ILCS 105/) and the Service Use Tax Act (35 ILCS 110/). "Use tax" also means any local use tax levied under the Home Rule Municipal Use Tax Act (65 ILCS 5/8-11-6(b)), provided that the State and the municipality have entered into an agreement that provides for administration of the tax by the State.

(Source: P.A. 100-1167, eff. 1-4-19.)

(35 ILCS 171/3)

Sec. 3. Legislative finding. The General Assembly finds that a simplified sales tax and use tax system will reduce and over time eliminate the burden and cost for all vendors to collect this State's sales and use tax. The General Assembly further finds that this State should participate in multistate discussions to review or amend or both review and amend the terms of the Agreement to simplify and modernize sales tax and use tax administration in order to substantially reduce the burden of tax compliance for all sellers and for all types of commerce.

(Source: P.A. 92-221, eff. 8-2-01.)

(35 ILCS 171/4)

Sec. 4. Authority to participate in multistate negotiations. For the purposes of reviewing or amending or both reviewing and amending the Agreement embodying the simplification requirements as contained in Section 7 of this Act, the State shall enter into multistate discussions. For purposes of such discussions, the State shall be represented by 4 delegates. One delegate shall be appointed by the President of the Senate, one by the Minority Leader of the Senate, one by the Speaker of the House of Representatives, and one by the Minority Leader of the House of Representatives.

(Source: P.A. 92-221, eff. 8-2-01.)

(35 ILCS 171/5)

Sec. 5. Authority to enter agreement. Subject to Section 6, the Department of Revenue is authorized to enter into the Streamlined Sales and Use Tax Agreement with one or more states to simplify and modernize sales and use tax administration in order to substantially reduce the burden of tax compliance for all sellers and for all types of commerce. In furtherance of the Agreement, the Department of Revenue is authorized to act jointly with other states that are members of the Agreement to establish standards for certification of a certified service provider and certified automated system and establish performance standards for multistate sellers.

The Department of Revenue is further authorized to take other actions reasonably required to implement the provisions set forth in this Act. Other actions authorized by this Section include, but are not limited to, the adoption of rules and regulations and the joint procurement, with other member states, of goods and services in furtherance of the cooperative agreement.

The Director of Revenue or the Director's designee is authorized to represent this State before the other states that are signatories to the Agreement.

(Source: P.A. 92-221, eff. 8-2-01.)

(35 ILCS 171/6)

Sec. 6. Relationship to State law. No provision of the Agreement authorized by this Act in whole or part invalidates or amends any provision of the law of this State. Adoption of the Agreement by this State does not amend or modify any law of this State. Implementation of any condition of the Agreement in this State, whether adopted before, at, or after membership of this State in the Agreement, must be by the action of this State.

(Source: P.A. 92-221, eff. 8-2-01.)

(35 ILCS 171/7)

Sec. 7. Agreement requirements. The Department of Revenue shall not enter into the Streamlined Sales and Use Tax Agreement unless the Agreement requires each state to abide by the following requirements:

(a) Simplified state rate. The Agreement must set restrictions to limit over time the number of state rates.

(b) Uniform standards. The Agreement must establish uniform standards for the following:

(1) The sourcing of transactions to taxing jurisdictions.

(2) The administration of exempt sales.

(3) Sales and use tax returns and remittances.

(c) Central registration. The Agreement must provide a central, electronic registration system that allows a seller to register to collect and remit sales and use taxes for all signatory states.

(d) No nexus attribution. The Agreement must provide that registration with the central registration system and the collection of sales and use taxes in the signatory states will not be used as a factor in determining whether the seller has nexus with a state for any tax.

(e) Local sales and use taxes. The Agreement must provide for reduction of the burdens of complying with local sales and use taxes, as those terms are defined by each signatory state in the Act by which the state authorizes its entry into the Agreement, through the following:

(1) Restricting variances between the State and local tax bases.

(2) Requiring states to administer any sales and use taxes levied by local jurisdictions within the state so that sellers collecting and remitting these taxes will not have to register or file returns with, remit funds to, or be subject to independent audits from local taxing jurisdictions with regard to these taxes.

(3) Restricting the frequency of changes in the local sales and use tax rates and setting effective dates for the application of local jurisdictional boundary changes to local sales and use taxes.

(4) Providing notice of changes in local sales and use tax rates and of changes in the boundaries of local taxing jurisdictions.

(f) Monetary allowances. The Agreement must outline any monetary allowances that are to be provided by the states to sellers or certified service providers. The Agreement must allow for a joint public and private sector study of the compliance cost on sellers and certified service providers to collect sales and use taxes for state and local governments under various levels of complexity to be completed by July 1, 2002.

(g) State compliance. The Agreement must require each state to certify compliance with the terms of the Agreement prior to joining and to maintain compliance, under the laws of the member state, with all provisions of the Agreement while a member.

(h) Consumer privacy. The Agreement must require each state to adopt a uniform policy for certified service providers that protects the privacy of consumers and maintains the confidentiality of tax information.

(i) Advisory councils. The Agreement must provide for the appointment of an advisory council of private sector representatives and an advisory council of non-member state representatives to consult with in the administration of the Agreement.

(j) Nothing in the Agreement shall require a signatory state to administer a tax levied by a local jurisdiction unless the tax is a sales tax or use tax as defined by the signatory state in the Act by which the state authorizes its entry into the Agreement.

(Source: P.A. 92-221, eff. 8-2-01.)

(35 ILCS 171/8)

Sec. 8. Cooperating sovereigns. The Agreement authorized by this Act is an accord among individual cooperating sovereigns in furtherance of their governmental functions. The Agreement provides a mechanism among the member states to establish and maintain a cooperative, simplified system for the application and administration of sales and use taxes under the duly adopted law of each member state.

(Source: P.A. 92-221, eff. 8-2-01.)

(35 ILCS 171/9)

Sec. 9. Limited binding and beneficial effect.

(a) The Agreement authorized by this Act binds and inures only to the benefit of this State and the other member states. No person, other than a member state, is an intended beneficiary of the Agreement. Any benefit to a person other than a state is established by the law of this State and the other member states and not by the terms of the Agreement.

(b) Consistent with subsection (a), no person shall have any cause of action or defense under the Agreement or by virtue of this State's approval of the Agreement. No person may challenge, in any action brought under any provision of law, any action or inaction by any department, agency, or other instrumentality of this State, or any political subdivision of this State on the ground that the action or inaction is inconsistent with the Agreement.

(c) No law of this State, or the application thereof, may be declared invalid as to any person or circumstance on the ground that the provision or application is inconsistent with the Agreement.

(Source: P.A. 92-221, eff. 8-2-01.)

(35 ILCS 171/10)

Sec. 10. Seller and third party liability.

(a) A certified service provider is the agent of a seller, with whom the certified service provider has contracted, for the collection and remittance of sales and use taxes. As the seller's agent, the certified service provider is liable for sales and use tax due each member state on all sales transactions it processes for the seller except as set out in this Section.

A seller that contracts with a certified service provider is not liable to the State for sales or use tax due on transactions processed by the certified service provider unless the seller misrepresented the type of items it sells or committed fraud. In the absence of probable cause to believe that the seller has committed fraud or made a material misrepresentation, the seller is not subject to audit on the transactions processed by the certified service provider. A seller is subject to audit for transactions not processed by the certified service provider. The member states acting jointly may perform a system check of the seller and review the seller's procedures to determine if the certified service provider's system is functioning properly and the extent to which the seller's transactions are being processed by the certified service provider.

(b) A person that provides a certified automated system is responsible for the proper functioning of that system and is liable to the State for underpayments of tax attributable to errors in the functioning of the certified automated system. A seller that uses a certified automated system remains responsible and is liable to the State for reporting and remitting tax.

(c) A seller that has a proprietary system for determining the amount of tax due on transactions and has signed an agreement establishing a performance standard for that system is liable for the failure of the system to meet the performance standard.

(Source: P.A. 92-221, eff. 8-2-01.)

(35 ILCS 171/905)

Sec. 905. (Amendatory provisions; text omitted).

(Source: P.A. 92-221, eff. 8-2-01; text omitted.)

(35 ILCS 171/910)

Sec. 910. (Amendatory provisions; text omitted).

(Source: P.A. 92-221, eff. 8-2-01; text omitted.)

(35 ILCS 171/915)

Sec. 915. (Amendatory provisions; text omitted).

(Source: P.A. 92-221, eff. 8-2-01; text omitted.)

(35 ILCS 171/999)

Sec. 999. Effective date. This Act takes effect upon becoming law.

(Source: P.A. 92-221, eff. 8-2-01.)