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91_HB4431eng
HB4431 Engrossed LRB9110442SMdvB
1 AN ACT concerning taxes, amending named Acts.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Illinois Income Tax Act is amended by
5 changing Sections 201, 203, 405, 803, and 1501 as follows:
6 (35 ILCS 5/201) (from Ch. 120, par. 2-201)
7 Sec. 201. Tax Imposed.
8 (a) In general. A tax measured by net income is hereby
9 imposed on every individual, corporation, trust and estate
10 for each taxable year ending after July 31, 1969 on the
11 privilege of earning or receiving income in or as a resident
12 of this State. Such tax shall be in addition to all other
13 occupation or privilege taxes imposed by this State or by any
14 municipal corporation or political subdivision thereof.
15 (b) Rates. The tax imposed by subsection (a) of this
16 Section shall be determined as follows, except as adjusted by
17 subsection (d-1):
18 (1) In the case of an individual, trust or estate,
19 for taxable years ending prior to July 1, 1989, an amount
20 equal to 2 1/2% of the taxpayer's net income for the
21 taxable year.
22 (2) In the case of an individual, trust or estate,
23 for taxable years beginning prior to July 1, 1989 and
24 ending after June 30, 1989, an amount equal to the sum of
25 (i) 2 1/2% of the taxpayer's net income for the period
26 prior to July 1, 1989, as calculated under Section 202.3,
27 and (ii) 3% of the taxpayer's net income for the period
28 after June 30, 1989, as calculated under Section 202.3.
29 (3) In the case of an individual, trust or estate,
30 for taxable years beginning after June 30, 1989, an
31 amount equal to 3% of the taxpayer's net income for the
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1 taxable year.
2 (4) (Blank).
3 (5) (Blank).
4 (6) In the case of a corporation, for taxable years
5 ending prior to July 1, 1989, an amount equal to 4% of
6 the taxpayer's net income for the taxable year.
7 (7) In the case of a corporation, for taxable years
8 beginning prior to July 1, 1989 and ending after June 30,
9 1989, an amount equal to the sum of (i) 4% of the
10 taxpayer's net income for the period prior to July 1,
11 1989, as calculated under Section 202.3, and (ii) 4.8% of
12 the taxpayer's net income for the period after June 30,
13 1989, as calculated under Section 202.3.
14 (8) In the case of a corporation, for taxable years
15 beginning after June 30, 1989, an amount equal to 4.8% of
16 the taxpayer's net income for the taxable year.
17 (c) Beginning on July 1, 1979 and thereafter, in
18 addition to such income tax, there is also hereby imposed the
19 Personal Property Tax Replacement Income Tax measured by net
20 income on every corporation (including Subchapter S
21 corporations), partnership and trust, for each taxable year
22 ending after June 30, 1979. Such taxes are imposed on the
23 privilege of earning or receiving income in or as a resident
24 of this State. The Personal Property Tax Replacement Income
25 Tax shall be in addition to the income tax imposed by
26 subsections (a) and (b) of this Section and in addition to
27 all other occupation or privilege taxes imposed by this State
28 or by any municipal corporation or political subdivision
29 thereof.
30 (d) Additional Personal Property Tax Replacement Income
31 Tax Rates. The personal property tax replacement income tax
32 imposed by this subsection and subsection (c) of this Section
33 in the case of a corporation, other than a Subchapter S
34 corporation and except as adjusted by subsection (d-1), shall
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1 be an additional amount equal to 2.85% of such taxpayer's net
2 income for the taxable year, except that beginning on January
3 1, 1981, and thereafter, the rate of 2.85% specified in this
4 subsection shall be reduced to 2.5%, and in the case of a
5 partnership, trust or a Subchapter S corporation shall be an
6 additional amount equal to 1.5% of such taxpayer's net income
7 for the taxable year.
8 (d-1) Rate reduction for certain foreign insurers. In
9 the case of a foreign insurer, as defined by Section 35A-5 of
10 the Illinois Insurance Code, whose state or country of
11 domicile imposes on insurers domiciled in Illinois a
12 retaliatory tax (excluding any insurer whose reinsurance
13 premiums assumed are 50% or more of its total insurance
14 premiums as determined under paragraph (2) of subsection (b)
15 of Section 304, except that for purposes of this
16 determination reinsurance premiums do not include assumed
17 premiums from inter-affiliate pooling arrangements),
18 beginning with taxable years ending on or after December 31,
19 1999 and ending with taxable years ending on or before
20 December 31, 2000, the sum of the rates of tax imposed by
21 subsections (b) and (d) shall be reduced (but not increased)
22 to the rate at which the total amount of tax imposed under
23 this Act, net of all credits allowed under this Act, shall
24 equal (i) the total amount of tax that would be imposed on
25 the foreign insurer's net income allocable to Illinois for
26 the taxable year by such foreign insurer's state or country
27 of domicile if that net income were subject to all income
28 taxes and taxes measured by net income imposed by such
29 foreign insurer's state or country of domicile, net of all
30 credits allowed or (ii) a rate of zero if no such tax is
31 imposed on such income by the foreign insurer's state of
32 domicile.
33 (1) For the purposes of subsection (d-1), in no
34 event shall the sum of the rates of tax imposed by
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1 subsections (b) and (d) be reduced below the rate at
2 which the sum of:
3 (A) the total amount of tax imposed on such
4 foreign insurer under this Act for a taxable year,
5 net of all credits allowed under this Act, plus
6 (B) the privilege tax imposed by Section 409
7 of the Illinois Insurance Code, the fire insurance
8 company tax imposed by Section 12 of the Fire
9 Investigation Act, and the fire department taxes
10 imposed under Section 11-10-1 of the Illinois
11 Municipal Code,
12 equals 1.25% of the net taxable premiums written for the
13 taxable year, as described by subsection (1) of Section
14 409 of the Illinois Insurance Code. This paragraph will
15 in no event increase the rates imposed under subsections
16 (b) and (d).
17 (2) Any reduction in the rates of tax imposed by
18 this subsection shall be applied first against the rates
19 imposed by subsection (b) and only after the tax imposed
20 by subsection (a) net of all credits allowed under this
21 Section other than the credit allowed under subsection
22 (i) has been reduced to zero, against the rates imposed
23 by subsection (d).
24 (3) The provisions of this subsection (d-1) are
25 effective only through December 31, 2000 and cease to be
26 effective on January 1, 2001; but this does not affect
27 any claim or obligation based upon the use or application
28 of this subsection for tax years ending on December 31,
29 2000 or earlier.
30 (e) Investment credit. A taxpayer shall be allowed a
31 credit against the Personal Property Tax Replacement Income
32 Tax for investment in qualified property.
33 (1) A taxpayer shall be allowed a credit equal to
34 .5% of the basis of qualified property placed in service
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1 during the taxable year, provided such property is placed
2 in service on or after July 1, 1984. There shall be
3 allowed an additional credit equal to .5% of the basis of
4 qualified property placed in service during the taxable
5 year, provided such property is placed in service on or
6 after July 1, 1986, and the taxpayer's base employment
7 within Illinois has increased by 1% or more over the
8 preceding year as determined by the taxpayer's employment
9 records filed with the Illinois Department of Employment
10 Security. Taxpayers who are new to Illinois shall be
11 deemed to have met the 1% growth in base employment for
12 the first year in which they file employment records with
13 the Illinois Department of Employment Security. The
14 provisions added to this Section by Public Act 85-1200
15 (and restored by Public Act 87-895) shall be construed as
16 declaratory of existing law and not as a new enactment.
17 If, in any year, the increase in base employment within
18 Illinois over the preceding year is less than 1%, the
19 additional credit shall be limited to that percentage
20 times a fraction, the numerator of which is .5% and the
21 denominator of which is 1%, but shall not exceed .5%.
22 The investment credit shall not be allowed to the extent
23 that it would reduce a taxpayer's liability in any tax
24 year below zero, nor may any credit for qualified
25 property be allowed for any year other than the year in
26 which the property was placed in service in Illinois. For
27 tax years ending on or after December 31, 1987, and on or
28 before December 31, 1988, the credit shall be allowed for
29 the tax year in which the property is placed in service,
30 or, if the amount of the credit exceeds the tax liability
31 for that year, whether it exceeds the original liability
32 or the liability as later amended, such excess may be
33 carried forward and applied to the tax liability of the 5
34 taxable years following the excess credit years if the
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1 taxpayer (i) makes investments which cause the creation
2 of a minimum of 2,000 full-time equivalent jobs in
3 Illinois, (ii) is located in an enterprise zone
4 established pursuant to the Illinois Enterprise Zone Act
5 and (iii) is certified by the Department of Commerce and
6 Community Affairs as complying with the requirements
7 specified in clause (i) and (ii) by July 1, 1986. The
8 Department of Commerce and Community Affairs shall notify
9 the Department of Revenue of all such certifications
10 immediately. For tax years ending after December 31,
11 1988, the credit shall be allowed for the tax year in
12 which the property is placed in service, or, if the
13 amount of the credit exceeds the tax liability for that
14 year, whether it exceeds the original liability or the
15 liability as later amended, such excess may be carried
16 forward and applied to the tax liability of the 5 taxable
17 years following the excess credit years. The credit shall
18 be applied to the earliest year for which there is a
19 liability. If there is credit from more than one tax year
20 that is available to offset a liability, earlier credit
21 shall be applied first.
22 (2) The term "qualified property" means property
23 which:
24 (A) is tangible, whether new or used,
25 including buildings and structural components of
26 buildings and signs that are real property, but not
27 including land or improvements to real property that
28 are not a structural component of a building such as
29 landscaping, sewer lines, local access roads,
30 fencing, parking lots, and other appurtenances;
31 (B) is depreciable pursuant to Section 167 of
32 the Internal Revenue Code, except that "3-year
33 property" as defined in Section 168(c)(2)(A) of that
34 Code is not eligible for the credit provided by this
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1 subsection (e);
2 (C) is acquired by purchase as defined in
3 Section 179(d) of the Internal Revenue Code;
4 (D) is used in Illinois by a taxpayer who is
5 primarily engaged in manufacturing, or in mining
6 coal or fluorite, or in retailing; and
7 (E) has not previously been used in Illinois
8 in such a manner and by such a person as would
9 qualify for the credit provided by this subsection
10 (e) or subsection (f).
11 (3) For purposes of this subsection (e),
12 "manufacturing" means the material staging and production
13 of tangible personal property by procedures commonly
14 regarded as manufacturing, processing, fabrication, or
15 assembling which changes some existing material into new
16 shapes, new qualities, or new combinations. For purposes
17 of this subsection (e) the term "mining" shall have the
18 same meaning as the term "mining" in Section 613(c) of
19 the Internal Revenue Code. For purposes of this
20 subsection (e), the term "retailing" means the sale of
21 tangible personal property or services rendered in
22 conjunction with the sale of tangible consumer goods or
23 commodities.
24 (4) The basis of qualified property shall be the
25 basis used to compute the depreciation deduction for
26 federal income tax purposes.
27 (5) If the basis of the property for federal income
28 tax depreciation purposes is increased after it has been
29 placed in service in Illinois by the taxpayer, the amount
30 of such increase shall be deemed property placed in
31 service on the date of such increase in basis.
32 (6) The term "placed in service" shall have the
33 same meaning as under Section 46 of the Internal Revenue
34 Code.
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1 (7) If during any taxable year, any property ceases
2 to be qualified property in the hands of the taxpayer
3 within 48 months after being placed in service, or the
4 situs of any qualified property is moved outside Illinois
5 within 48 months after being placed in service, the
6 Personal Property Tax Replacement Income Tax for such
7 taxable year shall be increased. Such increase shall be
8 determined by (i) recomputing the investment credit which
9 would have been allowed for the year in which credit for
10 such property was originally allowed by eliminating such
11 property from such computation and, (ii) subtracting such
12 recomputed credit from the amount of credit previously
13 allowed. For the purposes of this paragraph (7), a
14 reduction of the basis of qualified property resulting
15 from a redetermination of the purchase price shall be
16 deemed a disposition of qualified property to the extent
17 of such reduction.
18 (8) Unless the investment credit is extended by
19 law, the basis of qualified property shall not include
20 costs incurred after December 31, 2003, except for costs
21 incurred pursuant to a binding contract entered into on
22 or before December 31, 2003.
23 (9) Each taxable year ending before December 31,
24 2000, a partnership may elect to pass through to its
25 partners the credits to which the partnership is entitled
26 under this subsection (e) for the taxable year. A
27 partner may use the credit allocated to him or her under
28 this paragraph only against the tax imposed in
29 subsections (c) and (d) of this Section. If the
30 partnership makes that election, those credits shall be
31 allocated among the partners in the partnership in
32 accordance with the rules set forth in Section 704(b) of
33 the Internal Revenue Code, and the rules promulgated
34 under that Section, and the allocated amount of the
HB4431 Engrossed -9- LRB9110442SMdvB
1 credits shall be allowed to the partners for that taxable
2 year. The partnership shall make this election on its
3 Personal Property Tax Replacement Income Tax return for
4 that taxable year. The election to pass through the
5 credits shall be irrevocable.
6 For taxable years ending on or after December 31,
7 2000, a partner that qualifies its partnership for a
8 subtraction under subparagraph (I) of paragraph (2) of
9 subsection (d) of Section 203 or a shareholder that
10 qualifies a Subchapter S corporation for a subtraction
11 under subparagraph (S) of paragraph (2) of subsection (b)
12 of Section 203 shall be allowed a credit under this
13 subsection (e) equal to its share of the credit earned
14 under this subsection (e) during the taxable year by the
15 partnership or Subchapter S corporation, determined in
16 accordance with the determination of income and
17 distributive share of income under Sections 702 and 704
18 and Subchapter S of the Internal Revenue Code. This
19 paragraph is exempt from the provisions of Section 250.
20 (f) Investment credit; Enterprise Zone.
21 (1) A taxpayer shall be allowed a credit against
22 the tax imposed by subsections (a) and (b) of this
23 Section for investment in qualified property which is
24 placed in service in an Enterprise Zone created pursuant
25 to the Illinois Enterprise Zone Act. For partners,
26 shareholders of Subchapter S corporations, and owners of
27 limited liability companies, if the liability company is
28 treated as a partnership for purposes of federal and
29 State income taxation, there shall be allowed a credit
30 under this subsection (f) to be determined in accordance
31 with the determination of income and distributive share
32 of income under Sections 702 and 704 and Subchapter S of
33 the Internal Revenue Code. The credit shall be .5% of the
34 basis for such property. The credit shall be available
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1 only in the taxable year in which the property is placed
2 in service in the Enterprise Zone and shall not be
3 allowed to the extent that it would reduce a taxpayer's
4 liability for the tax imposed by subsections (a) and (b)
5 of this Section to below zero. For tax years ending on or
6 after December 31, 1985, the credit shall be allowed for
7 the tax year in which the property is placed in service,
8 or, if the amount of the credit exceeds the tax liability
9 for that year, whether it exceeds the original liability
10 or the liability as later amended, such excess may be
11 carried forward and applied to the tax liability of the 5
12 taxable years following the excess credit year. The
13 credit shall be applied to the earliest year for which
14 there is a liability. If there is credit from more than
15 one tax year that is available to offset a liability, the
16 credit accruing first in time shall be applied first.
17 (2) The term qualified property means property
18 which:
19 (A) is tangible, whether new or used,
20 including buildings and structural components of
21 buildings;
22 (B) is depreciable pursuant to Section 167 of
23 the Internal Revenue Code, except that "3-year
24 property" as defined in Section 168(c)(2)(A) of that
25 Code is not eligible for the credit provided by this
26 subsection (f);
27 (C) is acquired by purchase as defined in
28 Section 179(d) of the Internal Revenue Code;
29 (D) is used in the Enterprise Zone by the
30 taxpayer; and
31 (E) has not been previously used in Illinois
32 in such a manner and by such a person as would
33 qualify for the credit provided by this subsection
34 (f) or subsection (e).
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1 (3) The basis of qualified property shall be the
2 basis used to compute the depreciation deduction for
3 federal income tax purposes.
4 (4) If the basis of the property for federal income
5 tax depreciation purposes is increased after it has been
6 placed in service in the Enterprise Zone by the taxpayer,
7 the amount of such increase shall be deemed property
8 placed in service on the date of such increase in basis.
9 (5) The term "placed in service" shall have the
10 same meaning as under Section 46 of the Internal Revenue
11 Code.
12 (6) If during any taxable year, any property ceases
13 to be qualified property in the hands of the taxpayer
14 within 48 months after being placed in service, or the
15 situs of any qualified property is moved outside the
16 Enterprise Zone within 48 months after being placed in
17 service, the tax imposed under subsections (a) and (b) of
18 this Section for such taxable year shall be increased.
19 Such increase shall be determined by (i) recomputing the
20 investment credit which would have been allowed for the
21 year in which credit for such property was originally
22 allowed by eliminating such property from such
23 computation, and (ii) subtracting such recomputed credit
24 from the amount of credit previously allowed. For the
25 purposes of this paragraph (6), a reduction of the basis
26 of qualified property resulting from a redetermination of
27 the purchase price shall be deemed a disposition of
28 qualified property to the extent of such reduction.
29 (g) Jobs Tax Credit; Enterprise Zone and Foreign Trade
30 Zone or Sub-Zone.
31 (1) A taxpayer conducting a trade or business in an
32 enterprise zone or a High Impact Business designated by
33 the Department of Commerce and Community Affairs
34 conducting a trade or business in a federally designated
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1 Foreign Trade Zone or Sub-Zone shall be allowed a credit
2 against the tax imposed by subsections (a) and (b) of
3 this Section in the amount of $500 per eligible employee
4 hired to work in the zone during the taxable year.
5 (2) To qualify for the credit:
6 (A) the taxpayer must hire 5 or more eligible
7 employees to work in an enterprise zone or federally
8 designated Foreign Trade Zone or Sub-Zone during the
9 taxable year;
10 (B) the taxpayer's total employment within the
11 enterprise zone or federally designated Foreign
12 Trade Zone or Sub-Zone must increase by 5 or more
13 full-time employees beyond the total employed in
14 that zone at the end of the previous tax year for
15 which a jobs tax credit under this Section was
16 taken, or beyond the total employed by the taxpayer
17 as of December 31, 1985, whichever is later; and
18 (C) the eligible employees must be employed
19 180 consecutive days in order to be deemed hired for
20 purposes of this subsection.
21 (3) An "eligible employee" means an employee who
22 is:
23 (A) Certified by the Department of Commerce
24 and Community Affairs as "eligible for services"
25 pursuant to regulations promulgated in accordance
26 with Title II of the Job Training Partnership Act,
27 Training Services for the Disadvantaged or Title III
28 of the Job Training Partnership Act, Employment and
29 Training Assistance for Dislocated Workers Program.
30 (B) Hired after the enterprise zone or
31 federally designated Foreign Trade Zone or Sub-Zone
32 was designated or the trade or business was located
33 in that zone, whichever is later.
34 (C) Employed in the enterprise zone or Foreign
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1 Trade Zone or Sub-Zone. An employee is employed in
2 an enterprise zone or federally designated Foreign
3 Trade Zone or Sub-Zone if his services are rendered
4 there or it is the base of operations for the
5 services performed.
6 (D) A full-time employee working 30 or more
7 hours per week.
8 (4) For tax years ending on or after December 31,
9 1985 and prior to December 31, 1988, the credit shall be
10 allowed for the tax year in which the eligible employees
11 are hired. For tax years ending on or after December 31,
12 1988, the credit shall be allowed for the tax year
13 immediately following the tax year in which the eligible
14 employees are hired. If the amount of the credit exceeds
15 the tax liability for that year, whether it exceeds the
16 original liability or the liability as later amended,
17 such excess may be carried forward and applied to the tax
18 liability of the 5 taxable years following the excess
19 credit year. The credit shall be applied to the earliest
20 year for which there is a liability. If there is credit
21 from more than one tax year that is available to offset a
22 liability, earlier credit shall be applied first.
23 (5) The Department of Revenue shall promulgate such
24 rules and regulations as may be deemed necessary to carry
25 out the purposes of this subsection (g).
26 (6) The credit shall be available for eligible
27 employees hired on or after January 1, 1986.
28 (h) Investment credit; High Impact Business.
29 (1) Subject to subsection (b) of Section 5.5 of the
30 Illinois Enterprise Zone Act, a taxpayer shall be allowed
31 a credit against the tax imposed by subsections (a) and
32 (b) of this Section for investment in qualified property
33 which is placed in service by a Department of Commerce
34 and Community Affairs designated High Impact Business.
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1 The credit shall be .5% of the basis for such property.
2 The credit shall not be available until the minimum
3 investments in qualified property set forth in Section
4 5.5 of the Illinois Enterprise Zone Act have been
5 satisfied and shall not be allowed to the extent that it
6 would reduce a taxpayer's liability for the tax imposed
7 by subsections (a) and (b) of this Section to below zero.
8 The credit applicable to such minimum investments shall
9 be taken in the taxable year in which such minimum
10 investments have been completed. The credit for
11 additional investments beyond the minimum investment by a
12 designated high impact business shall be available only
13 in the taxable year in which the property is placed in
14 service and shall not be allowed to the extent that it
15 would reduce a taxpayer's liability for the tax imposed
16 by subsections (a) and (b) of this Section to below zero.
17 For tax years ending on or after December 31, 1987, the
18 credit shall be allowed for the tax year in which the
19 property is placed in service, or, if the amount of the
20 credit exceeds the tax liability for that year, whether
21 it exceeds the original liability or the liability as
22 later amended, such excess may be carried forward and
23 applied to the tax liability of the 5 taxable years
24 following the excess credit year. The credit shall be
25 applied to the earliest year for which there is a
26 liability. If there is credit from more than one tax
27 year that is available to offset a liability, the credit
28 accruing first in time shall be applied first.
29 Changes made in this subdivision (h)(1) by Public
30 Act 88-670 restore changes made by Public Act 85-1182 and
31 reflect existing law.
32 (2) The term qualified property means property
33 which:
34 (A) is tangible, whether new or used,
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1 including buildings and structural components of
2 buildings;
3 (B) is depreciable pursuant to Section 167 of
4 the Internal Revenue Code, except that "3-year
5 property" as defined in Section 168(c)(2)(A) of that
6 Code is not eligible for the credit provided by this
7 subsection (h);
8 (C) is acquired by purchase as defined in
9 Section 179(d) of the Internal Revenue Code; and
10 (D) is not eligible for the Enterprise Zone
11 Investment Credit provided by subsection (f) of this
12 Section.
13 (3) The basis of qualified property shall be the
14 basis used to compute the depreciation deduction for
15 federal income tax purposes.
16 (4) If the basis of the property for federal income
17 tax depreciation purposes is increased after it has been
18 placed in service in a federally designated Foreign Trade
19 Zone or Sub-Zone located in Illinois by the taxpayer, the
20 amount of such increase shall be deemed property placed
21 in service on the date of such increase in basis.
22 (5) The term "placed in service" shall have the
23 same meaning as under Section 46 of the Internal Revenue
24 Code.
25 (6) If during any taxable year ending on or before
26 December 31, 1996, any property ceases to be qualified
27 property in the hands of the taxpayer within 48 months
28 after being placed in service, or the situs of any
29 qualified property is moved outside Illinois within 48
30 months after being placed in service, the tax imposed
31 under subsections (a) and (b) of this Section for such
32 taxable year shall be increased. Such increase shall be
33 determined by (i) recomputing the investment credit which
34 would have been allowed for the year in which credit for
HB4431 Engrossed -16- LRB9110442SMdvB
1 such property was originally allowed by eliminating such
2 property from such computation, and (ii) subtracting such
3 recomputed credit from the amount of credit previously
4 allowed. For the purposes of this paragraph (6), a
5 reduction of the basis of qualified property resulting
6 from a redetermination of the purchase price shall be
7 deemed a disposition of qualified property to the extent
8 of such reduction.
9 (7) Beginning with tax years ending after December
10 31, 1996, if a taxpayer qualifies for the credit under
11 this subsection (h) and thereby is granted a tax
12 abatement and the taxpayer relocates its entire facility
13 in violation of the explicit terms and length of the
14 contract under Section 18-183 of the Property Tax Code,
15 the tax imposed under subsections (a) and (b) of this
16 Section shall be increased for the taxable year in which
17 the taxpayer relocated its facility by an amount equal to
18 the amount of credit received by the taxpayer under this
19 subsection (h).
20 (i) A credit shall be allowed against the tax imposed by
21 subsections (a) and (b) of this Section for the tax imposed
22 by subsections (c) and (d) of this Section. This credit
23 shall be computed by multiplying the tax imposed by
24 subsections (c) and (d) of this Section by a fraction, the
25 numerator of which is base income allocable to Illinois and
26 the denominator of which is Illinois base income, and further
27 multiplying the product by the tax rate imposed by
28 subsections (a) and (b) of this Section.
29 Any credit earned on or after December 31, 1986 under
30 this subsection which is unused in the year the credit is
31 computed because it exceeds the tax liability imposed by
32 subsections (a) and (b) for that year (whether it exceeds the
33 original liability or the liability as later amended) may be
34 carried forward and applied to the tax liability imposed by
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1 subsections (a) and (b) of the 5 taxable years following the
2 excess credit year. This credit shall be applied first to
3 the earliest year for which there is a liability. If there
4 is a credit under this subsection from more than one tax year
5 that is available to offset a liability the earliest credit
6 arising under this subsection shall be applied first.
7 If, during any taxable year ending on or after December
8 31, 1986, the tax imposed by subsections (c) and (d) of this
9 Section for which a taxpayer has claimed a credit under this
10 subsection (i) is reduced, the amount of credit for such tax
11 shall also be reduced. Such reduction shall be determined by
12 recomputing the credit to take into account the reduced tax
13 imposed by subsection (c) and (d). If any portion of the
14 reduced amount of credit has been carried to a different
15 taxable year, an amended return shall be filed for such
16 taxable year to reduce the amount of credit claimed.
17 (j) Training expense credit. Beginning with tax years
18 ending on or after December 31, 1986, a taxpayer shall be
19 allowed a credit against the tax imposed by subsection (a)
20 and (b) under this Section for all amounts paid or accrued,
21 on behalf of all persons employed by the taxpayer in Illinois
22 or Illinois residents employed outside of Illinois by a
23 taxpayer, for educational or vocational training in
24 semi-technical or technical fields or semi-skilled or skilled
25 fields, which were deducted from gross income in the
26 computation of taxable income. The credit against the tax
27 imposed by subsections (a) and (b) shall be 1.6% of such
28 training expenses. For partners, shareholders of subchapter
29 S corporations, and owners of limited liability companies, if
30 the liability company is treated as a partnership for
31 purposes of federal and State income taxation, there shall be
32 allowed a credit under this subsection (j) to be determined
33 in accordance with the determination of income and
34 distributive share of income under Sections 702 and 704 and
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1 subchapter S of the Internal Revenue Code.
2 Any credit allowed under this subsection which is unused
3 in the year the credit is earned may be carried forward to
4 each of the 5 taxable years following the year for which the
5 credit is first computed until it is used. This credit shall
6 be applied first to the earliest year for which there is a
7 liability. If there is a credit under this subsection from
8 more than one tax year that is available to offset a
9 liability the earliest credit arising under this subsection
10 shall be applied first.
11 (k) Research and development credit.
12 Beginning with tax years ending after July 1, 1990, a
13 taxpayer shall be allowed a credit against the tax imposed by
14 subsections (a) and (b) of this Section for increasing
15 research activities in this State. The credit allowed
16 against the tax imposed by subsections (a) and (b) shall be
17 equal to 6 1/2% of the qualifying expenditures for increasing
18 research activities in this State. For partners, shareholders
19 of subchapter S corporations, and owners of limited liability
20 companies, if the liability company is treated as a
21 partnership for purposes of federal and State income
22 taxation, there shall be allowed a credit under this
23 subsection to be determined in accordance with the
24 determination of income and distributive share of income
25 under Sections 702 and 704 and subchapter S of the Internal
26 Revenue Code.
27 For purposes of this subsection, "qualifying
28 expenditures" means the qualifying expenditures as defined
29 for the federal credit for increasing research activities
30 which would be allowable under Section 41 of the Internal
31 Revenue Code and which are conducted in this State,
32 "qualifying expenditures for increasing research activities
33 in this State" means the excess of qualifying expenditures
34 for the taxable year in which incurred over qualifying
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1 expenditures for the base period, "qualifying expenditures
2 for the base period" means the average of the qualifying
3 expenditures for each year in the base period, and "base
4 period" means the 3 taxable years immediately preceding the
5 taxable year for which the determination is being made.
6 Any credit in excess of the tax liability for the taxable
7 year may be carried forward. A taxpayer may elect to have the
8 unused credit shown on its final completed return carried
9 over as a credit against the tax liability for the following
10 5 taxable years or until it has been fully used, whichever
11 occurs first.
12 If an unused credit is carried forward to a given year
13 from 2 or more earlier years, that credit arising in the
14 earliest year will be applied first against the tax liability
15 for the given year. If a tax liability for the given year
16 still remains, the credit from the next earliest year will
17 then be applied, and so on, until all credits have been used
18 or no tax liability for the given year remains. Any
19 remaining unused credit or credits then will be carried
20 forward to the next following year in which a tax liability
21 is incurred, except that no credit can be carried forward to
22 a year which is more than 5 years after the year in which the
23 expense for which the credit is given was incurred.
24 Unless extended by law, the credit shall not include
25 costs incurred after December 31, 2004, except for costs
26 incurred pursuant to a binding contract entered into on or
27 before December 31, 2004.
28 No inference shall be drawn from this amendatory Act of
29 the 91st General Assembly in construing this Section for
30 taxable years beginning before January 1, 1999.
31 (l) Environmental Remediation Tax Credit.
32 (i) For tax years ending after December 31, 1997
33 and on or before December 31, 2001, a taxpayer shall be
34 allowed a credit against the tax imposed by subsections
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1 (a) and (b) of this Section for certain amounts paid for
2 unreimbursed eligible remediation costs, as specified in
3 this subsection. For purposes of this Section,
4 "unreimbursed eligible remediation costs" means costs
5 approved by the Illinois Environmental Protection Agency
6 ("Agency") under Section 58.14 of the Environmental
7 Protection Act that were paid in performing environmental
8 remediation at a site for which a No Further Remediation
9 Letter was issued by the Agency and recorded under
10 Section 58.10 of the Environmental Protection Act. The
11 credit must be claimed for the taxable year in which
12 Agency approval of the eligible remediation costs is
13 granted. The credit is not available to any taxpayer if
14 the taxpayer or any related party caused or contributed
15 to, in any material respect, a release of regulated
16 substances on, in, or under the site that was identified
17 and addressed by the remedial action pursuant to the Site
18 Remediation Program of the Environmental Protection Act.
19 After the Pollution Control Board rules are adopted
20 pursuant to the Illinois Administrative Procedure Act for
21 the administration and enforcement of Section 58.9 of the
22 Environmental Protection Act, determinations as to credit
23 availability for purposes of this Section shall be made
24 consistent with those rules. For purposes of this
25 Section, "taxpayer" includes a person whose tax
26 attributes the taxpayer has succeeded to under Section
27 381 of the Internal Revenue Code and "related party"
28 includes the persons disallowed a deduction for losses by
29 paragraphs (b), (c), and (f)(1) of Section 267 of the
30 Internal Revenue Code by virtue of being a related
31 taxpayer, as well as any of its partners. The credit
32 allowed against the tax imposed by subsections (a) and
33 (b) shall be equal to 25% of the unreimbursed eligible
34 remediation costs in excess of $100,000 per site, except
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1 that the $100,000 threshold shall not apply to any site
2 contained in an enterprise zone as determined by the
3 Department of Commerce and Community Affairs. The total
4 credit allowed shall not exceed $40,000 per year with a
5 maximum total of $150,000 per site. For partners and
6 shareholders of subchapter S corporations, there shall be
7 allowed a credit under this subsection to be determined
8 in accordance with the determination of income and
9 distributive share of income under Sections 702 and 704
10 of subchapter S of the Internal Revenue Code.
11 (ii) A credit allowed under this subsection that is
12 unused in the year the credit is earned may be carried
13 forward to each of the 5 taxable years following the year
14 for which the credit is first earned until it is used.
15 The term "unused credit" does not include any amounts of
16 unreimbursed eligible remediation costs in excess of the
17 maximum credit per site authorized under paragraph (i).
18 This credit shall be applied first to the earliest year
19 for which there is a liability. If there is a credit
20 under this subsection from more than one tax year that is
21 available to offset a liability, the earliest credit
22 arising under this subsection shall be applied first. A
23 credit allowed under this subsection may be sold to a
24 buyer as part of a sale of all or part of the remediation
25 site for which the credit was granted. The purchaser of
26 a remediation site and the tax credit shall succeed to
27 the unused credit and remaining carry-forward period of
28 the seller. To perfect the transfer, the assignor shall
29 record the transfer in the chain of title for the site
30 and provide written notice to the Director of the
31 Illinois Department of Revenue of the assignor's intent
32 to sell the remediation site and the amount of the tax
33 credit to be transferred as a portion of the sale. In no
34 event may a credit be transferred to any taxpayer if the
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1 taxpayer or a related party would not be eligible under
2 the provisions of subsection (i).
3 (iii) For purposes of this Section, the term "site"
4 shall have the same meaning as under Section 58.2 of the
5 Environmental Protection Act.
6 (m) Education expense credit.
7 Beginning with tax years ending after December 31, 1999,
8 a taxpayer who is the custodian of one or more qualifying
9 pupils shall be allowed a credit against the tax imposed by
10 subsections (a) and (b) of this Section for qualified
11 education expenses incurred on behalf of the qualifying
12 pupils. The credit shall be equal to 25% of qualified
13 education expenses, but in no event may the total credit
14 under this Section claimed by a family that is the custodian
15 of qualifying pupils exceed $500. In no event shall a credit
16 under this subsection reduce the taxpayer's liability under
17 this Act to less than zero. This subsection is exempt from
18 the provisions of Section 250 of this Act.
19 For purposes of this subsection;
20 "Qualifying pupils" means individuals who (i) are
21 residents of the State of Illinois, (ii) are under the age of
22 21 at the close of the school year for which a credit is
23 sought, and (iii) during the school year for which a credit
24 is sought were full-time pupils enrolled in a kindergarten
25 through twelfth grade education program at any school, as
26 defined in this subsection.
27 "Qualified education expense" means the amount incurred
28 on behalf of a qualifying pupil in excess of $250 for
29 tuition, book fees, and lab fees at the school in which the
30 pupil is enrolled during the regular school year.
31 "School" means any public or nonpublic elementary or
32 secondary school in Illinois that is in compliance with Title
33 VI of the Civil Rights Act of 1964 and attendance at which
34 satisfies the requirements of Section 26-1 of the School
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1 Code, except that nothing shall be construed to require a
2 child to attend any particular public or nonpublic school to
3 qualify for the credit under this Section.
4 "Custodian" means, with respect to qualifying pupils, an
5 Illinois resident who is a parent, the parents, a legal
6 guardian, or the legal guardians of the qualifying pupils.
7 (Source: P.A. 90-123, eff. 7-21-97; 90-458, eff. 8-17-97;
8 90-605, eff. 6-30-98; 90-655, eff. 7-30-98; 90-717, eff.
9 8-7-98; 90-792, eff. 1-1-99; 91-9, eff. 1-1-00; 91-357, eff.
10 7-29-99; 91-643, eff. 8-20-99; 91-644, eff. 8-20-99; revised
11 8-27-99.)
12 (35 ILCS 5/203) (from Ch. 120, par. 2-203)
13 Sec. 203. Base income defined.
14 (a) Individuals.
15 (1) In general. In the case of an individual, base
16 income means an amount equal to the taxpayer's adjusted
17 gross income for the taxable year as modified by
18 paragraph (2).
19 (2) Modifications. The adjusted gross income
20 referred to in paragraph (1) shall be modified by adding
21 thereto the sum of the following amounts:
22 (A) An amount equal to all amounts paid or
23 accrued to the taxpayer as interest or dividends
24 during the taxable year to the extent excluded from
25 gross income in the computation of adjusted gross
26 income, except stock dividends of qualified public
27 utilities described in Section 305(e) of the
28 Internal Revenue Code;
29 (B) An amount equal to the amount of tax
30 imposed by this Act to the extent deducted from
31 gross income in the computation of adjusted gross
32 income for the taxable year;
33 (C) An amount equal to the amount received
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1 during the taxable year as a recovery or refund of
2 real property taxes paid with respect to the
3 taxpayer's principal residence under the Revenue Act
4 of 1939 and for which a deduction was previously
5 taken under subparagraph (L) of this paragraph (2)
6 prior to July 1, 1991, the retrospective application
7 date of Article 4 of Public Act 87-17. In the case
8 of multi-unit or multi-use structures and farm
9 dwellings, the taxes on the taxpayer's principal
10 residence shall be that portion of the total taxes
11 for the entire property which is attributable to
12 such principal residence;
13 (D) An amount equal to the amount of the
14 capital gain deduction allowable under the Internal
15 Revenue Code, to the extent deducted from gross
16 income in the computation of adjusted gross income;
17 (D-5) An amount, to the extent not included in
18 adjusted gross income, equal to the amount of money
19 withdrawn by the taxpayer in the taxable year from a
20 medical care savings account and the interest earned
21 on the account in the taxable year of a withdrawal
22 pursuant to subsection (b) of Section 20 of the
23 Medical Care Savings Account Act; and
24 (D-10) For taxable years ending after December
25 31, 1997, an amount equal to any eligible
26 remediation costs that the individual deducted in
27 computing adjusted gross income and for which the
28 individual claims a credit under subsection (l) of
29 Section 201;
30 and by deducting from the total so obtained the sum of
31 the following amounts:
32 (E) Any amount included in such total in
33 respect of any compensation (including but not
34 limited to any compensation paid or accrued to a
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1 serviceman while a prisoner of war or missing in
2 action) paid to a resident by reason of being on
3 active duty in the Armed Forces of the United States
4 and in respect of any compensation paid or accrued
5 to a resident who as a governmental employee was a
6 prisoner of war or missing in action, and in respect
7 of any compensation paid to a resident in 1971 or
8 thereafter for annual training performed pursuant to
9 Sections 502 and 503, Title 32, United States Code
10 as a member of the Illinois National Guard;
11 (F) An amount equal to all amounts included in
12 such total pursuant to the provisions of Sections
13 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
14 408 of the Internal Revenue Code, or included in
15 such total as distributions under the provisions of
16 any retirement or disability plan for employees of
17 any governmental agency or unit, or retirement
18 payments to retired partners, which payments are
19 excluded in computing net earnings from self
20 employment by Section 1402 of the Internal Revenue
21 Code and regulations adopted pursuant thereto;
22 (G) The valuation limitation amount;
23 (H) An amount equal to the amount of any tax
24 imposed by this Act which was refunded to the
25 taxpayer and included in such total for the taxable
26 year;
27 (I) An amount equal to all amounts included in
28 such total pursuant to the provisions of Section 111
29 of the Internal Revenue Code as a recovery of items
30 previously deducted from adjusted gross income in
31 the computation of taxable income;
32 (J) An amount equal to those dividends
33 included in such total which were paid by a
34 corporation which conducts business operations in an
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1 Enterprise Zone or zones created under the Illinois
2 Enterprise Zone Act, and conducts substantially all
3 of its operations in an Enterprise Zone or zones;
4 (K) An amount equal to those dividends
5 included in such total that were paid by a
6 corporation that conducts business operations in a
7 federally designated Foreign Trade Zone or Sub-Zone
8 and that is designated a High Impact Business
9 located in Illinois; provided that dividends
10 eligible for the deduction provided in subparagraph
11 (J) of paragraph (2) of this subsection shall not be
12 eligible for the deduction provided under this
13 subparagraph (K);
14 (L) For taxable years ending after December
15 31, 1983, an amount equal to all social security
16 benefits and railroad retirement benefits included
17 in such total pursuant to Sections 72(r) and 86 of
18 the Internal Revenue Code;
19 (M) With the exception of any amounts
20 subtracted under subparagraph (N), an amount equal
21 to the sum of all amounts disallowed as deductions
22 by (i) Sections 171(a) (2), and 265(2) of the
23 Internal Revenue Code of 1954, as now or hereafter
24 amended, and all amounts of expenses allocable to
25 interest and disallowed as deductions by Section
26 265(1) of the Internal Revenue Code of 1954, as now
27 or hereafter amended; and (ii) for taxable years
28 ending on or after August 13, 1999 the effective
29 date of this amendatory Act of the 91st General
30 Assembly, Sections 171(a)(2), 265, 280C, and
31 832(b)(5)(B)(i) of the Internal Revenue Code; the
32 provisions of this subparagraph are exempt from the
33 provisions of Section 250;
34 (N) An amount equal to all amounts included in
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1 such total which are exempt from taxation by this
2 State either by reason of its statutes or
3 Constitution or by reason of the Constitution,
4 treaties or statutes of the United States; provided
5 that, in the case of any statute of this State that
6 exempts income derived from bonds or other
7 obligations from the tax imposed under this Act, the
8 amount exempted shall be the interest net of bond
9 premium amortization;
10 (O) An amount equal to any contribution made
11 to a job training project established pursuant to
12 the Tax Increment Allocation Redevelopment Act;
13 (P) An amount equal to the amount of the
14 deduction used to compute the federal income tax
15 credit for restoration of substantial amounts held
16 under claim of right for the taxable year pursuant
17 to Section 1341 of the Internal Revenue Code of
18 1986;
19 (Q) An amount equal to any amounts included in
20 such total, received by the taxpayer as an
21 acceleration in the payment of life, endowment or
22 annuity benefits in advance of the time they would
23 otherwise be payable as an indemnity for a terminal
24 illness;
25 (R) An amount equal to the amount of any
26 federal or State bonus paid to veterans of the
27 Persian Gulf War;
28 (S) An amount, to the extent included in
29 adjusted gross income, equal to the amount of a
30 contribution made in the taxable year on behalf of
31 the taxpayer to a medical care savings account
32 established under the Medical Care Savings Account
33 Act to the extent the contribution is accepted by
34 the account administrator as provided in that Act;
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1 (T) An amount, to the extent included in
2 adjusted gross income, equal to the amount of
3 interest earned in the taxable year on a medical
4 care savings account established under the Medical
5 Care Savings Account Act on behalf of the taxpayer,
6 other than interest added pursuant to item (D-5) of
7 this paragraph (2);
8 (U) For one taxable year beginning on or after
9 January 1, 1994, an amount equal to the total amount
10 of tax imposed and paid under subsections (a) and
11 (b) of Section 201 of this Act on grant amounts
12 received by the taxpayer under the Nursing Home
13 Grant Assistance Act during the taxpayer's taxable
14 years 1992 and 1993;
15 (V) Beginning with tax years ending on or
16 after December 31, 1995 and ending with tax years
17 ending on or before December 31, 2004, an amount
18 equal to the amount paid by a taxpayer who is a
19 self-employed taxpayer, a partner of a partnership,
20 or a shareholder in a Subchapter S corporation for
21 health insurance or long-term care insurance for
22 that taxpayer or that taxpayer's spouse or
23 dependents, to the extent that the amount paid for
24 that health insurance or long-term care insurance
25 may be deducted under Section 213 of the Internal
26 Revenue Code of 1986, has not been deducted on the
27 federal income tax return of the taxpayer, and does
28 not exceed the taxable income attributable to that
29 taxpayer's income, self-employment income, or
30 Subchapter S corporation income; except that no
31 deduction shall be allowed under this item (V) if
32 the taxpayer is eligible to participate in any
33 health insurance or long-term care insurance plan of
34 an employer of the taxpayer or the taxpayer's
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1 spouse. The amount of the health insurance and
2 long-term care insurance subtracted under this item
3 (V) shall be determined by multiplying total health
4 insurance and long-term care insurance premiums paid
5 by the taxpayer times a number that represents the
6 fractional percentage of eligible medical expenses
7 under Section 213 of the Internal Revenue Code of
8 1986 not actually deducted on the taxpayer's federal
9 income tax return;
10 (W) For taxable years beginning on or after
11 January 1, 1998, all amounts included in the
12 taxpayer's federal gross income in the taxable year
13 from amounts converted from a regular IRA to a Roth
14 IRA. This paragraph is exempt from the provisions of
15 Section 250; and
16 (X) For taxable year 1999 and thereafter, an
17 amount equal to the amount of any (i) distributions,
18 to the extent includible in gross income for federal
19 income tax purposes, made to the taxpayer because of
20 his or her status as a victim of persecution for
21 racial or religious reasons by Nazi Germany or any
22 other Axis regime or as an heir of the victim and
23 (ii) items of income, to the extent includible in
24 gross income for federal income tax purposes,
25 attributable to, derived from or in any way related
26 to assets stolen from, hidden from, or otherwise
27 lost to a victim of persecution for racial or
28 religious reasons by Nazi Germany or any other Axis
29 regime immediately prior to, during, and immediately
30 after World War II, including, but not limited to,
31 interest on the proceeds receivable as insurance
32 under policies issued to a victim of persecution for
33 racial or religious reasons by Nazi Germany or any
34 other Axis regime by European insurance companies
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1 immediately prior to and during World War II;
2 provided, however, this subtraction from federal
3 adjusted gross income does not apply to assets
4 acquired with such assets or with the proceeds from
5 the sale of such assets; provided, further, this
6 paragraph shall only apply to a taxpayer who was the
7 first recipient of such assets after their recovery
8 and who is a victim of persecution for racial or
9 religious reasons by Nazi Germany or any other Axis
10 regime or as an heir of the victim. The amount of
11 and the eligibility for any public assistance,
12 benefit, or similar entitlement is not affected by
13 the inclusion of items (i) and (ii) of this
14 paragraph in gross income for federal income tax
15 purposes. This paragraph is exempt from the
16 provisions of Section 250.
17 (b) Corporations.
18 (1) In general. In the case of a corporation, base
19 income means an amount equal to the taxpayer's taxable
20 income for the taxable year as modified by paragraph (2).
21 (2) Modifications. The taxable income referred to
22 in paragraph (1) shall be modified by adding thereto the
23 sum of the following amounts:
24 (A) An amount equal to all amounts paid or
25 accrued to the taxpayer as interest and all
26 distributions received from regulated investment
27 companies during the taxable year to the extent
28 excluded from gross income in the computation of
29 taxable income;
30 (B) An amount equal to the amount of tax
31 imposed by this Act to the extent deducted from
32 gross income in the computation of taxable income
33 for the taxable year;
34 (C) In the case of a regulated investment
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1 company, an amount equal to the excess of (i) the
2 net long-term capital gain for the taxable year,
3 over (ii) the amount of the capital gain dividends
4 designated as such in accordance with Section
5 852(b)(3)(C) of the Internal Revenue Code and any
6 amount designated under Section 852(b)(3)(D) of the
7 Internal Revenue Code, attributable to the taxable
8 year (this amendatory Act of 1995 (Public Act 89-89)
9 is declarative of existing law and is not a new
10 enactment);
11 (D) The amount of any net operating loss
12 deduction taken in arriving at taxable income, other
13 than a net operating loss carried forward from a
14 taxable year ending prior to December 31, 1986;
15 (E) For taxable years in which a net operating
16 loss carryback or carryforward from a taxable year
17 ending prior to December 31, 1986 is an element of
18 taxable income under paragraph (1) of subsection (e)
19 or subparagraph (E) of paragraph (2) of subsection
20 (e), the amount by which addition modifications
21 other than those provided by this subparagraph (E)
22 exceeded subtraction modifications in such earlier
23 taxable year, with the following limitations applied
24 in the order that they are listed:
25 (i) the addition modification relating to
26 the net operating loss carried back or forward
27 to the taxable year from any taxable year
28 ending prior to December 31, 1986 shall be
29 reduced by the amount of addition modification
30 under this subparagraph (E) which related to
31 that net operating loss and which was taken
32 into account in calculating the base income of
33 an earlier taxable year, and
34 (ii) the addition modification relating
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1 to the net operating loss carried back or
2 forward to the taxable year from any taxable
3 year ending prior to December 31, 1986 shall
4 not exceed the amount of such carryback or
5 carryforward;
6 For taxable years in which there is a net
7 operating loss carryback or carryforward from more
8 than one other taxable year ending prior to December
9 31, 1986, the addition modification provided in this
10 subparagraph (E) shall be the sum of the amounts
11 computed independently under the preceding
12 provisions of this subparagraph (E) for each such
13 taxable year; and
14 (E-5) For taxable years ending after December
15 31, 1997, an amount equal to any eligible
16 remediation costs that the corporation deducted in
17 computing adjusted gross income and for which the
18 corporation claims a credit under subsection (l) of
19 Section 201;
20 and by deducting from the total so obtained the sum of
21 the following amounts:
22 (F) An amount equal to the amount of any tax
23 imposed by this Act which was refunded to the
24 taxpayer and included in such total for the taxable
25 year;
26 (G) An amount equal to any amount included in
27 such total under Section 78 of the Internal Revenue
28 Code;
29 (H) In the case of a regulated investment
30 company, an amount equal to the amount of exempt
31 interest dividends as defined in subsection (b) (5)
32 of Section 852 of the Internal Revenue Code, paid to
33 shareholders for the taxable year;
34 (I) With the exception of any amounts
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1 subtracted under subparagraph (J), an amount equal
2 to the sum of all amounts disallowed as deductions
3 by (i) Sections 171(a) (2), and 265(a)(2) and
4 amounts disallowed as interest expense by Section
5 291(a)(3) of the Internal Revenue Code, as now or
6 hereafter amended, and all amounts of expenses
7 allocable to interest and disallowed as deductions
8 by Section 265(a)(1) of the Internal Revenue Code,
9 as now or hereafter amended; and (ii) for taxable
10 years ending on or after August 13, 1999 the
11 effective date of this amendatory Act of the 91st
12 General Assembly, Sections 171(a)(2), 265, 280C,
13 291(a)(3), and 832(b)(5)(B)(i) of the Internal
14 Revenue Code; the provisions of this subparagraph
15 are exempt from the provisions of Section 250;
16 (J) An amount equal to all amounts included in
17 such total which are exempt from taxation by this
18 State either by reason of its statutes or
19 Constitution or by reason of the Constitution,
20 treaties or statutes of the United States; provided
21 that, in the case of any statute of this State that
22 exempts income derived from bonds or other
23 obligations from the tax imposed under this Act, the
24 amount exempted shall be the interest net of bond
25 premium amortization;
26 (K) An amount equal to those dividends
27 included in such total which were paid by a
28 corporation which conducts business operations in an
29 Enterprise Zone or zones created under the Illinois
30 Enterprise Zone Act and conducts substantially all
31 of its operations in an Enterprise Zone or zones;
32 (L) An amount equal to those dividends
33 included in such total that were paid by a
34 corporation that conducts business operations in a
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1 federally designated Foreign Trade Zone or Sub-Zone
2 and that is designated a High Impact Business
3 located in Illinois; provided that dividends
4 eligible for the deduction provided in subparagraph
5 (K) of paragraph 2 of this subsection shall not be
6 eligible for the deduction provided under this
7 subparagraph (L);
8 (M) For any taxpayer that is a financial
9 organization within the meaning of Section 304(c) of
10 this Act, an amount included in such total as
11 interest income from a loan or loans made by such
12 taxpayer to a borrower, to the extent that such a
13 loan is secured by property which is eligible for
14 the Enterprise Zone Investment Credit. To determine
15 the portion of a loan or loans that is secured by
16 property eligible for a Section 201(h) investment
17 credit to the borrower, the entire principal amount
18 of the loan or loans between the taxpayer and the
19 borrower should be divided into the basis of the
20 Section 201(h) investment credit property which
21 secures the loan or loans, using for this purpose
22 the original basis of such property on the date that
23 it was placed in service in the Enterprise Zone.
24 The subtraction modification available to taxpayer
25 in any year under this subsection shall be that
26 portion of the total interest paid by the borrower
27 with respect to such loan attributable to the
28 eligible property as calculated under the previous
29 sentence;
30 (M-1) For any taxpayer that is a financial
31 organization within the meaning of Section 304(c) of
32 this Act, an amount included in such total as
33 interest income from a loan or loans made by such
34 taxpayer to a borrower, to the extent that such a
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1 loan is secured by property which is eligible for
2 the High Impact Business Investment Credit. To
3 determine the portion of a loan or loans that is
4 secured by property eligible for a Section 201(i)
5 investment credit to the borrower, the entire
6 principal amount of the loan or loans between the
7 taxpayer and the borrower should be divided into the
8 basis of the Section 201(i) investment credit
9 property which secures the loan or loans, using for
10 this purpose the original basis of such property on
11 the date that it was placed in service in a
12 federally designated Foreign Trade Zone or Sub-Zone
13 located in Illinois. No taxpayer that is eligible
14 for the deduction provided in subparagraph (M) of
15 paragraph (2) of this subsection shall be eligible
16 for the deduction provided under this subparagraph
17 (M-1). The subtraction modification available to
18 taxpayers in any year under this subsection shall be
19 that portion of the total interest paid by the
20 borrower with respect to such loan attributable to
21 the eligible property as calculated under the
22 previous sentence;
23 (N) Two times any contribution made during the
24 taxable year to a designated zone organization to
25 the extent that the contribution (i) qualifies as a
26 charitable contribution under subsection (c) of
27 Section 170 of the Internal Revenue Code and (ii)
28 must, by its terms, be used for a project approved
29 by the Department of Commerce and Community Affairs
30 under Section 11 of the Illinois Enterprise Zone
31 Act;
32 (O) An amount equal to: (i) 85% for taxable
33 years ending on or before December 31, 1992, or, a
34 percentage equal to the percentage allowable under
HB4431 Engrossed -36- LRB9110442SMdvB
1 Section 243(a)(1) of the Internal Revenue Code of
2 1986 for taxable years ending after December 31,
3 1992, of the amount by which dividends included in
4 taxable income and received from a corporation that
5 is not created or organized under the laws of the
6 United States or any state or political subdivision
7 thereof, including, for taxable years ending on or
8 after December 31, 1988, dividends received or
9 deemed received or paid or deemed paid under
10 Sections 951 through 964 of the Internal Revenue
11 Code, exceed the amount of the modification provided
12 under subparagraph (G) of paragraph (2) of this
13 subsection (b) which is related to such dividends;
14 plus (ii) 100% of the amount by which dividends,
15 included in taxable income and received, including,
16 for taxable years ending on or after December 31,
17 1988, dividends received or deemed received or paid
18 or deemed paid under Sections 951 through 964 of the
19 Internal Revenue Code, from any such corporation
20 specified in clause (i) that would but for the
21 provisions of Section 1504 (b) (3) of the Internal
22 Revenue Code be treated as a member of the
23 affiliated group which includes the dividend
24 recipient, exceed the amount of the modification
25 provided under subparagraph (G) of paragraph (2) of
26 this subsection (b) which is related to such
27 dividends;
28 (P) An amount equal to any contribution made
29 to a job training project established pursuant to
30 the Tax Increment Allocation Redevelopment Act;
31 (Q) An amount equal to the amount of the
32 deduction used to compute the federal income tax
33 credit for restoration of substantial amounts held
34 under claim of right for the taxable year pursuant
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1 to Section 1341 of the Internal Revenue Code of
2 1986; and
3 (R) In the case of an attorney-in-fact with
4 respect to whom an interinsurer or a reciprocal
5 insurer has made the election under Section 835 of
6 the Internal Revenue Code, 26 U.S.C. 835, an amount
7 equal to the excess, if any, of the amounts paid or
8 incurred by that interinsurer or reciprocal insurer
9 in the taxable year to the attorney-in-fact over the
10 deduction allowed to that interinsurer or reciprocal
11 insurer with respect to the attorney-in-fact under
12 Section 835(b) of the Internal Revenue Code for the
13 taxable year; and
14 (S) For taxable years ending on or after
15 December 31, 1997, in the case of a Subchapter S
16 corporation, an amount equal to all amounts of
17 income allocable to a shareholder subject to the
18 Personal Property Tax Replacement Income Tax imposed
19 by subsections (c) and (d) of Section 201 of this
20 Act, including amounts allocable to organizations
21 exempt from federal income tax by reason of Section
22 501(a) of the Internal Revenue Code. This
23 subparagraph (S) is exempt from the provisions of
24 Section 250.
25 (3) Special rule. For purposes of paragraph (2)
26 (A), "gross income" in the case of a life insurance
27 company, for tax years ending on and after December 31,
28 1994, shall mean the gross investment income for the
29 taxable year.
30 (c) Trusts and estates.
31 (1) In general. In the case of a trust or estate,
32 base income means an amount equal to the taxpayer's
33 taxable income for the taxable year as modified by
34 paragraph (2).
HB4431 Engrossed -38- LRB9110442SMdvB
1 (2) Modifications. Subject to the provisions of
2 paragraph (3), the taxable income referred to in
3 paragraph (1) shall be modified by adding thereto the sum
4 of the following amounts:
5 (A) An amount equal to all amounts paid or
6 accrued to the taxpayer as interest or dividends
7 during the taxable year to the extent excluded from
8 gross income in the computation of taxable income;
9 (B) In the case of (i) an estate, $600; (ii) a
10 trust which, under its governing instrument, is
11 required to distribute all of its income currently,
12 $300; and (iii) any other trust, $100, but in each
13 such case, only to the extent such amount was
14 deducted in the computation of taxable income;
15 (C) An amount equal to the amount of tax
16 imposed by this Act to the extent deducted from
17 gross income in the computation of taxable income
18 for the taxable year;
19 (D) The amount of any net operating loss
20 deduction taken in arriving at taxable income, other
21 than a net operating loss carried forward from a
22 taxable year ending prior to December 31, 1986;
23 (E) For taxable years in which a net operating
24 loss carryback or carryforward from a taxable year
25 ending prior to December 31, 1986 is an element of
26 taxable income under paragraph (1) of subsection (e)
27 or subparagraph (E) of paragraph (2) of subsection
28 (e), the amount by which addition modifications
29 other than those provided by this subparagraph (E)
30 exceeded subtraction modifications in such taxable
31 year, with the following limitations applied in the
32 order that they are listed:
33 (i) the addition modification relating to
34 the net operating loss carried back or forward
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1 to the taxable year from any taxable year
2 ending prior to December 31, 1986 shall be
3 reduced by the amount of addition modification
4 under this subparagraph (E) which related to
5 that net operating loss and which was taken
6 into account in calculating the base income of
7 an earlier taxable year, and
8 (ii) the addition modification relating
9 to the net operating loss carried back or
10 forward to the taxable year from any taxable
11 year ending prior to December 31, 1986 shall
12 not exceed the amount of such carryback or
13 carryforward;
14 For taxable years in which there is a net
15 operating loss carryback or carryforward from more
16 than one other taxable year ending prior to December
17 31, 1986, the addition modification provided in this
18 subparagraph (E) shall be the sum of the amounts
19 computed independently under the preceding
20 provisions of this subparagraph (E) for each such
21 taxable year;
22 (F) For taxable years ending on or after
23 January 1, 1989, an amount equal to the tax deducted
24 pursuant to Section 164 of the Internal Revenue Code
25 if the trust or estate is claiming the same tax for
26 purposes of the Illinois foreign tax credit under
27 Section 601 of this Act;
28 (G) An amount equal to the amount of the
29 capital gain deduction allowable under the Internal
30 Revenue Code, to the extent deducted from gross
31 income in the computation of taxable income; and
32 (G-5) For taxable years ending after December
33 31, 1997, an amount equal to any eligible
34 remediation costs that the trust or estate deducted
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1 in computing adjusted gross income and for which the
2 trust or estate claims a credit under subsection (l)
3 of Section 201;
4 and by deducting from the total so obtained the sum of
5 the following amounts:
6 (H) An amount equal to all amounts included in
7 such total pursuant to the provisions of Sections
8 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and
9 408 of the Internal Revenue Code or included in such
10 total as distributions under the provisions of any
11 retirement or disability plan for employees of any
12 governmental agency or unit, or retirement payments
13 to retired partners, which payments are excluded in
14 computing net earnings from self employment by
15 Section 1402 of the Internal Revenue Code and
16 regulations adopted pursuant thereto;
17 (I) The valuation limitation amount;
18 (J) An amount equal to the amount of any tax
19 imposed by this Act which was refunded to the
20 taxpayer and included in such total for the taxable
21 year;
22 (K) An amount equal to all amounts included in
23 taxable income as modified by subparagraphs (A),
24 (B), (C), (D), (E), (F) and (G) which are exempt
25 from taxation by this State either by reason of its
26 statutes or Constitution or by reason of the
27 Constitution, treaties or statutes of the United
28 States; provided that, in the case of any statute of
29 this State that exempts income derived from bonds or
30 other obligations from the tax imposed under this
31 Act, the amount exempted shall be the interest net
32 of bond premium amortization;
33 (L) With the exception of any amounts
34 subtracted under subparagraph (K), an amount equal
HB4431 Engrossed -41- LRB9110442SMdvB
1 to the sum of all amounts disallowed as deductions
2 by (i) Sections 171(a) (2) and 265(a)(2) of the
3 Internal Revenue Code, as now or hereafter amended,
4 and all amounts of expenses allocable to interest
5 and disallowed as deductions by Section 265(1) of
6 the Internal Revenue Code of 1954, as now or
7 hereafter amended; and (ii) for taxable years ending
8 on or after August 13, 1999 the effective date of
9 this amendatory Act of the 91st General Assembly,
10 Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i)
11 of the Internal Revenue Code; the provisions of this
12 subparagraph are exempt from the provisions of
13 Section 250;
14 (M) An amount equal to those dividends
15 included in such total which were paid by a
16 corporation which conducts business operations in an
17 Enterprise Zone or zones created under the Illinois
18 Enterprise Zone Act and conducts substantially all
19 of its operations in an Enterprise Zone or Zones;
20 (N) An amount equal to any contribution made
21 to a job training project established pursuant to
22 the Tax Increment Allocation Redevelopment Act;
23 (O) An amount equal to those dividends
24 included in such total that were paid by a
25 corporation that conducts business operations in a
26 federally designated Foreign Trade Zone or Sub-Zone
27 and that is designated a High Impact Business
28 located in Illinois; provided that dividends
29 eligible for the deduction provided in subparagraph
30 (M) of paragraph (2) of this subsection shall not be
31 eligible for the deduction provided under this
32 subparagraph (O);
33 (P) An amount equal to the amount of the
34 deduction used to compute the federal income tax
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1 credit for restoration of substantial amounts held
2 under claim of right for the taxable year pursuant
3 to Section 1341 of the Internal Revenue Code of
4 1986; and
5 (Q) For taxable year 1999 and thereafter, an
6 amount equal to the amount of any (i) distributions,
7 to the extent includible in gross income for federal
8 income tax purposes, made to the taxpayer because of
9 his or her status as a victim of persecution for
10 racial or religious reasons by Nazi Germany or any
11 other Axis regime or as an heir of the victim and
12 (ii) items of income, to the extent includible in
13 gross income for federal income tax purposes,
14 attributable to, derived from or in any way related
15 to assets stolen from, hidden from, or otherwise
16 lost to a victim of persecution for racial or
17 religious reasons by Nazi Germany or any other Axis
18 regime immediately prior to, during, and immediately
19 after World War II, including, but not limited to,
20 interest on the proceeds receivable as insurance
21 under policies issued to a victim of persecution for
22 racial or religious reasons by Nazi Germany or any
23 other Axis regime by European insurance companies
24 immediately prior to and during World War II;
25 provided, however, this subtraction from federal
26 adjusted gross income does not apply to assets
27 acquired with such assets or with the proceeds from
28 the sale of such assets; provided, further, this
29 paragraph shall only apply to a taxpayer who was the
30 first recipient of such assets after their recovery
31 and who is a victim of persecution for racial or
32 religious reasons by Nazi Germany or any other Axis
33 regime or as an heir of the victim. The amount of
34 and the eligibility for any public assistance,
HB4431 Engrossed -43- LRB9110442SMdvB
1 benefit, or similar entitlement is not affected by
2 the inclusion of items (i) and (ii) of this
3 paragraph in gross income for federal income tax
4 purposes. This paragraph is exempt from the
5 provisions of Section 250.
6 (3) Limitation. The amount of any modification
7 otherwise required under this subsection shall, under
8 regulations prescribed by the Department, be adjusted by
9 any amounts included therein which were properly paid,
10 credited, or required to be distributed, or permanently
11 set aside for charitable purposes pursuant to Internal
12 Revenue Code Section 642(c) during the taxable year.
13 (d) Partnerships.
14 (1) In general. In the case of a partnership, base
15 income means an amount equal to the taxpayer's taxable
16 income for the taxable year as modified by paragraph (2).
17 (2) Modifications. The taxable income referred to
18 in paragraph (1) shall be modified by adding thereto the
19 sum of the following amounts:
20 (A) An amount equal to all amounts paid or
21 accrued to the taxpayer as interest or dividends
22 during the taxable year to the extent excluded from
23 gross income in the computation of taxable income;
24 (B) An amount equal to the amount of tax
25 imposed by this Act to the extent deducted from
26 gross income for the taxable year;
27 (C) The amount of deductions allowed to the
28 partnership pursuant to Section 707 (c) of the
29 Internal Revenue Code in calculating its taxable
30 income; and
31 (D) An amount equal to the amount of the
32 capital gain deduction allowable under the Internal
33 Revenue Code, to the extent deducted from gross
34 income in the computation of taxable income;
HB4431 Engrossed -44- LRB9110442SMdvB
1 and by deducting from the total so obtained the following
2 amounts:
3 (E) The valuation limitation amount;
4 (F) An amount equal to the amount of any tax
5 imposed by this Act which was refunded to the
6 taxpayer and included in such total for the taxable
7 year;
8 (G) An amount equal to all amounts included in
9 taxable income as modified by subparagraphs (A),
10 (B), (C) and (D) which are exempt from taxation by
11 this State either by reason of its statutes or
12 Constitution or by reason of the Constitution,
13 treaties or statutes of the United States; provided
14 that, in the case of any statute of this State that
15 exempts income derived from bonds or other
16 obligations from the tax imposed under this Act, the
17 amount exempted shall be the interest net of bond
18 premium amortization;
19 (H) Any income of the partnership which
20 constitutes personal service income as defined in
21 Section 1348 (b) (1) of the Internal Revenue Code
22 (as in effect December 31, 1981) or a reasonable
23 allowance for compensation paid or accrued for
24 services rendered by partners to the partnership,
25 whichever is greater;
26 (I) An amount equal to all amounts of income
27 distributable to an entity subject to the Personal
28 Property Tax Replacement Income Tax imposed by
29 subsections (c) and (d) of Section 201 of this Act
30 including amounts distributable to organizations
31 exempt from federal income tax by reason of Section
32 501(a) of the Internal Revenue Code;
33 (J) With the exception of any amounts
34 subtracted under subparagraph (G), an amount equal
HB4431 Engrossed -45- LRB9110442SMdvB
1 to the sum of all amounts disallowed as deductions
2 by (i) Sections 171(a) (2), and 265(2) of the
3 Internal Revenue Code of 1954, as now or hereafter
4 amended, and all amounts of expenses allocable to
5 interest and disallowed as deductions by Section
6 265(1) of the Internal Revenue Code, as now or
7 hereafter amended; and (ii) for taxable years ending
8 on or after August 13, 1999 the effective date of
9 this amendatory Act of the 91st General Assembly,
10 Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i)
11 of the Internal Revenue Code; the provisions of this
12 subparagraph are exempt from the provisions of
13 Section 250;
14 (K) An amount equal to those dividends
15 included in such total which were paid by a
16 corporation which conducts business operations in an
17 Enterprise Zone or zones created under the Illinois
18 Enterprise Zone Act, enacted by the 82nd General
19 Assembly, and which does not conduct such operations
20 other than in an Enterprise Zone or Zones;
21 (L) An amount equal to any contribution made
22 to a job training project established pursuant to
23 the Real Property Tax Increment Allocation
24 Redevelopment Act;
25 (M) An amount equal to those dividends
26 included in such total that were paid by a
27 corporation that conducts business operations in a
28 federally designated Foreign Trade Zone or Sub-Zone
29 and that is designated a High Impact Business
30 located in Illinois; provided that dividends
31 eligible for the deduction provided in subparagraph
32 (K) of paragraph (2) of this subsection shall not be
33 eligible for the deduction provided under this
34 subparagraph (M); and
HB4431 Engrossed -46- LRB9110442SMdvB
1 (N) An amount equal to the amount of the
2 deduction used to compute the federal income tax
3 credit for restoration of substantial amounts held
4 under claim of right for the taxable year pursuant
5 to Section 1341 of the Internal Revenue Code of
6 1986.
7 (e) Gross income; adjusted gross income; taxable income.
8 (1) In general. Subject to the provisions of
9 paragraph (2) and subsection (b) (3), for purposes of
10 this Section and Section 803(e), a taxpayer's gross
11 income, adjusted gross income, or taxable income for the
12 taxable year shall mean the amount of gross income,
13 adjusted gross income or taxable income properly
14 reportable for federal income tax purposes for the
15 taxable year under the provisions of the Internal Revenue
16 Code. Taxable income may be less than zero. However, for
17 taxable years ending on or after December 31, 1986, net
18 operating loss carryforwards from taxable years ending
19 prior to December 31, 1986, may not exceed the sum of
20 federal taxable income for the taxable year before net
21 operating loss deduction, plus the excess of addition
22 modifications over subtraction modifications for the
23 taxable year. For taxable years ending prior to December
24 31, 1986, taxable income may never be an amount in excess
25 of the net operating loss for the taxable year as defined
26 in subsections (c) and (d) of Section 172 of the Internal
27 Revenue Code, provided that when taxable income of a
28 corporation (other than a Subchapter S corporation),
29 trust, or estate is less than zero and addition
30 modifications, other than those provided by subparagraph
31 (E) of paragraph (2) of subsection (b) for corporations
32 or subparagraph (E) of paragraph (2) of subsection (c)
33 for trusts and estates, exceed subtraction modifications,
34 an addition modification must be made under those
HB4431 Engrossed -47- LRB9110442SMdvB
1 subparagraphs for any other taxable year to which the
2 taxable income less than zero (net operating loss) is
3 applied under Section 172 of the Internal Revenue Code or
4 under subparagraph (E) of paragraph (2) of this
5 subsection (e) applied in conjunction with Section 172 of
6 the Internal Revenue Code.
7 (2) Special rule. For purposes of paragraph (1) of
8 this subsection, the taxable income properly reportable
9 for federal income tax purposes shall mean:
10 (A) Certain life insurance companies. In the
11 case of a life insurance company subject to the tax
12 imposed by Section 801 of the Internal Revenue Code,
13 life insurance company taxable income, plus the
14 amount of distribution from pre-1984 policyholder
15 surplus accounts as calculated under Section 815a of
16 the Internal Revenue Code;
17 (B) Certain other insurance companies. In the
18 case of mutual insurance companies subject to the
19 tax imposed by Section 831 of the Internal Revenue
20 Code, insurance company taxable income;
21 (C) Regulated investment companies. In the
22 case of a regulated investment company subject to
23 the tax imposed by Section 852 of the Internal
24 Revenue Code, investment company taxable income;
25 (D) Real estate investment trusts. In the
26 case of a real estate investment trust subject to
27 the tax imposed by Section 857 of the Internal
28 Revenue Code, real estate investment trust taxable
29 income;
30 (E) Consolidated corporations. In the case of
31 a corporation which is a member of an affiliated
32 group of corporations filing a consolidated income
33 tax return for the taxable year for federal income
34 tax purposes, taxable income determined as if such
HB4431 Engrossed -48- LRB9110442SMdvB
1 corporation had filed a separate return for federal
2 income tax purposes for the taxable year and each
3 preceding taxable year for which it was a member of
4 an affiliated group. For purposes of this
5 subparagraph, the taxpayer's separate taxable income
6 shall be determined as if the election provided by
7 Section 243(b) (2) of the Internal Revenue Code had
8 been in effect for all such years;
9 (F) Cooperatives. In the case of a
10 cooperative corporation or association, the taxable
11 income of such organization determined in accordance
12 with the provisions of Section 1381 through 1388 of
13 the Internal Revenue Code;
14 (G) Subchapter S corporations. In the case
15 of: (i) a Subchapter S corporation for which there
16 is in effect an election for the taxable year under
17 Section 1362 of the Internal Revenue Code, the
18 taxable income of such corporation determined in
19 accordance with Section 1363(b) of the Internal
20 Revenue Code, except that taxable income shall take
21 into account those items which are required by
22 Section 1363(b)(1) of the Internal Revenue Code to
23 be separately stated; and (ii) a Subchapter S
24 corporation for which there is in effect a federal
25 election to opt out of the provisions of the
26 Subchapter S Revision Act of 1982 and have applied
27 instead the prior federal Subchapter S rules as in
28 effect on July 1, 1982, the taxable income of such
29 corporation determined in accordance with the
30 federal Subchapter S rules as in effect on July 1,
31 1982; and
32 (H) Partnerships. In the case of a
33 partnership, taxable income determined in accordance
34 with Section 703 of the Internal Revenue Code,
HB4431 Engrossed -49- LRB9110442SMdvB
1 except that taxable income shall take into account
2 those items which are required by Section 703(a)(1)
3 to be separately stated but which would be taken
4 into account by an individual in calculating his
5 taxable income.
6 (f) Valuation limitation amount.
7 (1) In general. The valuation limitation amount
8 referred to in subsections (a) (2) (G), (c) (2) (I) and
9 (d)(2) (E) is an amount equal to:
10 (A) The sum of the pre-August 1, 1969
11 appreciation amounts (to the extent consisting of
12 gain reportable under the provisions of Section 1245
13 or 1250 of the Internal Revenue Code) for all
14 property in respect of which such gain was reported
15 for the taxable year; plus
16 (B) The lesser of (i) the sum of the
17 pre-August 1, 1969 appreciation amounts (to the
18 extent consisting of capital gain) for all property
19 in respect of which such gain was reported for
20 federal income tax purposes for the taxable year, or
21 (ii) the net capital gain for the taxable year,
22 reduced in either case by any amount of such gain
23 included in the amount determined under subsection
24 (a) (2) (F) or (c) (2) (H).
25 (2) Pre-August 1, 1969 appreciation amount.
26 (A) If the fair market value of property
27 referred to in paragraph (1) was readily
28 ascertainable on August 1, 1969, the pre-August 1,
29 1969 appreciation amount for such property is the
30 lesser of (i) the excess of such fair market value
31 over the taxpayer's basis (for determining gain) for
32 such property on that date (determined under the
33 Internal Revenue Code as in effect on that date), or
34 (ii) the total gain realized and reportable for
HB4431 Engrossed -50- LRB9110442SMdvB
1 federal income tax purposes in respect of the sale,
2 exchange or other disposition of such property.
3 (B) If the fair market value of property
4 referred to in paragraph (1) was not readily
5 ascertainable on August 1, 1969, the pre-August 1,
6 1969 appreciation amount for such property is that
7 amount which bears the same ratio to the total gain
8 reported in respect of the property for federal
9 income tax purposes for the taxable year, as the
10 number of full calendar months in that part of the
11 taxpayer's holding period for the property ending
12 July 31, 1969 bears to the number of full calendar
13 months in the taxpayer's entire holding period for
14 the property.
15 (C) The Department shall prescribe such
16 regulations as may be necessary to carry out the
17 purposes of this paragraph.
18 (g) Double deductions. Unless specifically provided
19 otherwise, nothing in this Section shall permit the same item
20 to be deducted more than once.
21 (h) Legislative intention. Except as expressly provided
22 by this Section there shall be no modifications or
23 limitations on the amounts of income, gain, loss or deduction
24 taken into account in determining gross income, adjusted
25 gross income or taxable income for federal income tax
26 purposes for the taxable year, or in the amount of such items
27 entering into the computation of base income and net income
28 under this Act for such taxable year, whether in respect of
29 property values as of August 1, 1969 or otherwise.
30 (Source: P.A. 90-491, eff. 1-1-98; 90-717, eff. 8-7-98;
31 90-770, eff. 8-14-98; 91-192, eff. 7-20-99; 91-205, eff.
32 7-20-99; 91-357, eff. 7-29-99; 91-541, eff. 8-13-99; 91-676,
33 eff. 12-23-99; revised 1-5-00.)
HB4431 Engrossed -51- LRB9110442SMdvB
1 (35 ILCS 5/405)
2 Sec. 405. Carryovers in certain acquisitions.
3 (a) In the case of the acquisition of assets of a
4 corporation by another corporation described in Section
5 381(a) of the Internal Revenue Code, the acquiring
6 corporation shall succeed to and take into account, as of the
7 close of the day of distribution or transfer, all Article 2
8 credits and net losses under Section 207 of the corporation
9 from which the assets were where acquired, without limitation
10 under Section 382 of the Internal Revenue Code or the
11 separate return limitation year regulations promulgated under
12 Section 1502 of the Internal Revenue Code.
13 (b) In the case of the acquisition of assets of a
14 partnership by another partnership in a transaction in which
15 the acquiring partnership is considered to be a continuation
16 of the partnership from which the assets were acquired under
17 the provisions of Section 708 of the Internal Revenue Code
18 and any regulations promulgated under that Section, the
19 acquiring partnership shall succeed to and take into account,
20 as of the close of the day of distribution or transfer, all
21 Article 2 credits and net losses under Section 207 of the
22 partnership from which the assets were acquired.
23 (b-5) No limitation under Section 382 of the Internal
24 Revenue Code or the separate return limitation year
25 regulations promulgated under Section 1502 of the Internal
26 Revenue Code shall apply to the carryover of any Article 2
27 credit or net loss allowable under Section 207.
28 (c) The provisions of this amendatory Act of the 91st
29 General Assembly shall apply to all acquisitions occurring in
30 taxable years ending on or after December 31, 1986; provided
31 that if a taxpayer's Illinois income tax liability for any
32 taxable year, as assessed under Section 903 prior to January
33 1, 1999, was computed without taking into account all of the
34 Article 2 credits and net losses under Section 207 as allowed
HB4431 Engrossed -52- LRB9110442SMdvB
1 by this Section:
2 (1) no refund shall be payable to the taxpayer for
3 that taxable year as the result of allowing any portion
4 of the Article 2 credits or net losses under Section 207
5 that were not taken into account in computing the tax
6 assessed prior to January 1, 1999;
7 (2) any deficiency which has not been paid may be
8 reduced (but not below zero) by the allowance of some or
9 all of the Article 2 credits or net losses under Section
10 207 that were not taken into account in computing the tax
11 assessed prior to January 1, 1999; and
12 (3) in the case of any Article 2 credit or net loss
13 under Section 207 that, pursuant to this subsection (c),
14 could not be taken into account either in computing the
15 tax assessed prior to January 1, 1999 for a taxable year
16 or in reducing a deficiency for that taxable year under
17 paragraph (2) of subsection (c), the allowance of such
18 credit or loss in any other taxable year shall not be
19 denied on the grounds that such credit or loss should
20 properly have been claimed in that taxable year under
21 subsection (a) or (b).
22 (Source: P.A. 91-541, eff. 8-13-99.)
23 (35 ILCS 5/803) (from Ch. 120, par. 8-803)
24 Sec. 803. Payment of Estimated Tax.
25 (a) Every taxpayer other than an estate, trust,
26 partnership, Subchapter S corporation or farmer is required
27 to pay estimated tax for the taxable year, in such amount and
28 with such forms as the Department shall prescribe, if the
29 amount payable as estimated tax can reasonably be expected to
30 be more than (i) $250 for taxable years ending before
31 December 31, 2001 and $500 for taxable years ending on or
32 after December 31, 2001 or (ii) $400 for corporations.
33 (b) Estimated tax defined. The term "estimated tax"
HB4431 Engrossed -53- LRB9110442SMdvB
1 means the excess of:
2 (1) The amount which the taxpayer estimates to be his
3 tax under this Act for the taxable year, over
4 (2) The amount which he estimates to be the sum of any
5 amounts to be withheld on account of or credited against such
6 tax.
7 (c) Joint payment. If they are eligible to do so for
8 federal tax purposes, a husband and wife may pay estimated
9 tax as if they were one taxpayer, in which case the liability
10 with respect to the estimated tax shall be joint and several.
11 If a joint payment is made but the husband and wife elect to
12 determine their taxes under this Act separately, the
13 estimated tax for such year may be treated as the estimated
14 tax of either husband or wife, or may be divided between
15 them, as they may elect.
16 (d) There shall be paid 4 equal installments of
17 estimated tax for each taxable year, payable as follows:
18 Required Installment: Due Date:
19 1st April 15
20 2nd June 15
21 3rd September 15
22 4th Individuals: January 15 of the
23 following taxable year
24 Corporations: December 15
25 (e) Farmers. An individual, having gross income from
26 farming for the taxable year which is at least 2/3 of his
27 total estimated gross income for such year.
28 (f) Application to short taxable years. The application
29 of this section to taxable years of less than 12 months shall
30 be in accordance with regulations prescribed by the
31 Department.
32 (g) Fiscal years. In the application of this section to
33 the case of a taxable year beginning on any date other than
34 January 1, there shall be substituted, for the months
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1 specified in subsections (d) and (e), the months which
2 correspond thereto.
3 (h) Installments paid in advance. Any installment of
4 estimated tax may be paid before the date prescribed for its
5 payment.
6 The changes in this Section made by this amendatory Act
7 of 1985 shall apply to taxable years ending on or after
8 January 1, 1986.
9 (Source: P.A. 86-678.)
10 (35 ILCS 5/1501) (from Ch. 120, par. 15-1501)
11 Sec. 1501. Definitions.
12 (a) In general. When used in this Act, where not
13 otherwise distinctly expressed or manifestly incompatible
14 with the intent thereof:
15 (1) Business income. The term "business income"
16 means income arising from transactions and activity in
17 the regular course of the taxpayer's trade or business,
18 net of the deductions allocable thereto, and includes
19 income from tangible and intangible property if the
20 acquisition, management, and disposition of the property
21 constitute integral parts of the taxpayer's regular trade
22 or business operations. Such term does not include
23 compensation or the deductions allocable thereto.
24 (2) Commercial domicile. The term "commercial
25 domicile" means the principal place from which the trade
26 or business of the taxpayer is directed or managed.
27 (3) Compensation. The term "compensation" means
28 wages, salaries, commissions and any other form of
29 remuneration paid to employees for personal services.
30 (4) Corporation. The term "corporation" includes
31 associations, joint-stock companies, insurance companies
32 and cooperatives. Any entity, including a limited
33 liability company formed under the Illinois Limited
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1 Liability Company Act, shall be treated as a corporation
2 if it is so classified for federal income tax purposes.
3 (5) Department. The term "Department" means the
4 Department of Revenue of this State.
5 (6) Director. The term "Director" means the
6 Director of Revenue of this State.
7 (7) Fiduciary. The term "fiduciary" means a
8 guardian, trustee, executor, administrator, receiver, or
9 any person acting in any fiduciary capacity for any
10 person.
11 (8) Financial organization.
12 (A) The term "financial organization" means
13 any bank, bank holding company, trust company,
14 savings bank, industrial bank, land bank, safe
15 deposit company, private banker, savings and loan
16 association, building and loan association, credit
17 union, currency exchange, cooperative bank, small
18 loan company, sales finance company, investment
19 company, or any person which is owned by a bank or
20 bank holding company. For the purpose of this
21 Section a "person" will include only those persons
22 which a bank holding company may acquire and hold an
23 interest in, directly or indirectly, under the
24 provisions of the Bank Holding Company Act of 1956
25 (12 U.S.C. 1841, et seq.), except where interests in
26 any person must be disposed of within certain
27 required time limits under the Bank Holding Company
28 Act of 1956.
29 (B) For purposes of subparagraph (A) of this
30 paragraph, the term "bank" includes (i) any entity
31 that is regulated by the Comptroller of the Currency
32 under the National Bank Act, or by the Federal
33 Reserve Board, or by the Federal Deposit Insurance
34 Corporation and (ii) any federally or State
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1 chartered bank operating as a credit card bank.
2 (C) For purposes of subparagraph (A) of this
3 paragraph, the term "sales finance company" has the
4 meaning provided in the following item (i) or (ii):
5 (i) A person primarily engaged in one or
6 more of the following businesses: the business
7 of purchasing customer receivables, the
8 business of making loans upon the security of
9 customer receivables, the business of making
10 loans for the express purpose of funding
11 purchases of tangible personal property or
12 services by the borrower, or the business of
13 finance leasing. For purposes of this item
14 (i), "customer receivable" means:
15 (a) a retail installment contract or
16 retail charge agreement within the meaning of
17 the Sales Finance Agency Act, the Retail
18 Installment Sales Act, or the Motor Vehicle
19 Retail Installment Sales Act;
20 (b) an installment, charge, credit, or
21 similar contract or agreement arising from the
22 sale of tangible personal property or services
23 in a transaction involving a deferred payment
24 price payable in one or more installments
25 subsequent to the sale; or
26 (c) the outstanding balance of a contract
27 or agreement described in provisions (a) or (b)
28 of this item (i).
29 A customer receivable need not provide for
30 payment of interest on deferred payments. A sales
31 finance company may purchase a customer receivable
32 from, or make a loan secured by a customer
33 receivable to, the seller in the original
34 transaction or to a person who purchased the
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1 customer receivable directly or indirectly from that
2 seller.
3 (ii) A corporation meeting each of the
4 following criteria:
5 (a) the corporation must be a member of
6 an "affiliated group" within the meaning of
7 Section 1504(a) of the Internal Revenue Code,
8 determined without regard to Section 1504(b) of
9 the Internal Revenue Code;
10 (b) more than 50% of the gross income of
11 the corporation for the taxable year must be
12 interest income derived from qualifying loans.
13 A "qualifying loan" is a loan made to a member
14 of the corporation's affiliated group that
15 originates customer receivables (within the
16 meaning of item (i)) or to whom customer
17 receivables originated by a member of the
18 affiliated group have been transferred, to the
19 extent the average outstanding balance of loans
20 from that corporation to members of its
21 affiliated group during the taxable year do not
22 exceed the limitation amount for that
23 corporation. The "limitation amount" for a
24 corporation is the average outstanding balances
25 during the taxable year of customer receivables
26 (within the meaning of item (i)) originated by
27 all members of the affiliated group. If the
28 average outstanding balances of the loans made
29 by a corporation to members of its affiliated
30 group exceed the limitation amount, the
31 interest income of that corporation from
32 qualifying loans shall be equal to its interest
33 income from loans to members of its affiliated
34 groups times a fraction equal to the limitation
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1 amount divided by the average outstanding
2 balances of the loans made by that corporation
3 to members of its affiliated group;
4 (c) the total of all shareholder's equity
5 (including, without limitation, paid-in capital
6 on common and preferred stock and retained
7 earnings) of the corporation plus the total of
8 all of its loans, advances, and other
9 obligations payable or owed to members of its
10 affiliated group may not exceed 20% of the
11 total assets of the corporation at any time
12 during the tax year; and
13 (d) more than 50% of all interest-bearing
14 obligations of the affiliated group payable to
15 persons outside the group determined in
16 accordance with generally accepted accounting
17 principles must be obligations of the
18 corporation.
19 This amendatory Act of the 91st General Assembly is
20 declaratory of existing law.
21 (D) Subparagraphs (B) and (C) of this
22 paragraph are declaratory of existing law and apply
23 retroactively, for all tax years beginning on or
24 before December 31, 1996, to all original returns,
25 to all amended returns filed no later than 30 days
26 after the effective date of this amendatory Act of
27 1996, and to all notices issued on or before the
28 effective date of this amendatory Act of 1996 under
29 subsection (a) of Section 903, subsection (a) of
30 Section 904, subsection (e) of Section 909, or
31 Section 912. A taxpayer that is a "financial
32 organization" that engages in any transaction with
33 an affiliate shall be a "financial organization" for
34 all purposes of this Act.
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1 (E) For all tax years beginning on or before
2 December 31, 1996, a taxpayer that falls within the
3 definition of a "financial organization" under
4 subparagraphs (B) or (C) of this paragraph, but who
5 does not fall within the definition of a "financial
6 organization" under the Proposed Regulations issued
7 by the Department of Revenue on July 19, 1996, may
8 irrevocably elect to apply the Proposed Regulations
9 for all of those years as though the Proposed
10 Regulations had been lawfully promulgated, adopted,
11 and in effect for all of those years. For purposes
12 of applying subparagraphs (B) or (C) of this
13 paragraph to all of those years, the election
14 allowed by this subparagraph applies only to the
15 taxpayer making the election and to those members of
16 the taxpayer's unitary business group who are
17 ordinarily required to apportion business income
18 under the same subsection of Section 304 of this Act
19 as the taxpayer making the election. No election
20 allowed by this subparagraph shall be made under a
21 claim filed under subsection (d) of Section 909 more
22 than 30 days after the effective date of this
23 amendatory Act of 1996.
24 (F) Finance Leases. For purposes of this
25 subsection, a finance lease shall be treated as a
26 loan or other extension of credit, rather than as a
27 lease, regardless of how the transaction is
28 characterized for any other purpose, including the
29 purposes of any regulatory agency to which the
30 lessor is subject. A finance lease is any
31 transaction in the form of a lease in which the
32 lessee is treated as the owner of the leased asset
33 entitled to any deduction for depreciation allowed
34 under Section 167 of the Internal Revenue Code.
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1 (9) Fiscal year. The term "fiscal year" means an
2 accounting period of 12 months ending on the last day of
3 any month other than December.
4 (10) Includes and including. The terms "includes"
5 and "including" when used in a definition contained in
6 this Act shall not be deemed to exclude other things
7 otherwise within the meaning of the term defined.
8 (11) Internal Revenue Code. The term "Internal
9 Revenue Code" means the United States Internal Revenue
10 Code of 1954 or any successor law or laws relating to
11 federal income taxes in effect for the taxable year.
12 (12) Mathematical error. The term "mathematical
13 error" includes the following types of errors, omissions,
14 or defects in a return filed by a taxpayer which prevents
15 acceptance of the return as filed for processing:
16 (A) arithmetic errors or incorrect
17 computations on the return or supporting schedules;
18 (B) entries on the wrong lines;
19 (C) omission of required supporting forms or
20 schedules or the omission of the information in
21 whole or in part called for thereon; and
22 (D) an attempt to claim, exclude, deduct, or
23 improperly report, in a manner directly contrary to
24 the provisions of the Act and regulations thereunder
25 any item of income, exemption, deduction, or credit.
26 (13) Nonbusiness income. The term "nonbusiness
27 income" means all income other than business income or
28 compensation.
29 (14) Nonresident. The term "nonresident" means a
30 person who is not a resident.
31 (15) Paid, incurred and accrued. The terms "paid",
32 "incurred" and "accrued" shall be construed according to
33 the method of accounting upon the basis of which the
34 person's base income is computed under this Act.
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1 (16) Partnership and partner. The term
2 "partnership" includes a syndicate, group, pool, joint
3 venture or other unincorporated organization, through or
4 by means of which any business, financial operation, or
5 venture is carried on, and which is not, within the
6 meaning of this Act, a trust or estate or a corporation;
7 and the term "partner" includes a member in such
8 syndicate, group, pool, joint venture or organization.
9 The term "partnership" includes any entity,
10 including a limited liability company formed under the
11 Illinois Limited Liability Company Act, shall be treated
12 as a partnership if it is so classified as a partnership
13 for federal income tax purposes.
14 For purposes of the tax imposed at subsection (c) of
15 Section 201 of this Act, The term "partnership" does not
16 include a syndicate, group, pool, joint venture, or other
17 unincorporated organization established for the sole
18 purpose of playing the Illinois State Lottery.
19 (17) Part-year resident. The term "part-year
20 resident" means an individual who became a resident
21 during the taxable year or ceased to be a resident during
22 the taxable year. Under Section 1501 (a) (20) (A) (i)
23 residence commences with presence in this State for other
24 than a temporary or transitory purpose and ceases with
25 absence from this State for other than a temporary or
26 transitory purpose. Under Section 1501 (a) (20) (A) (ii)
27 residence commences with the establishment of domicile in
28 this State and ceases with the establishment of domicile
29 in another State.
30 (18) Person. The term "person" shall be construed
31 to mean and include an individual, a trust, estate,
32 partnership, association, firm, company, corporation,
33 limited liability company, or fiduciary. For purposes of
34 Section 1301 and 1302 of this Act, a "person" means (i)
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1 an individual, (ii) a corporation, (iii) an officer,
2 agent, or employee of a corporation, (iv) a member, agent
3 or employee of a partnership, or (v) a member, manager,
4 employee, officer, director, or agent of a limited
5 liability company who in such capacity commits an offense
6 specified in Section 1301 and 1302.
7 (18A) Records. The term "records" includes all
8 data maintained by the taxpayer, whether on paper,
9 microfilm, microfiche, or any type of machine-sensible
10 data compilation.
11 (19) Regulations. The term "regulations" includes
12 rules promulgated and forms prescribed by the Department.
13 (20) Resident. The term "resident" means:
14 (A) an individual (i) who is in this State for
15 other than a temporary or transitory purpose during
16 the taxable year; or (ii) who is domiciled in this
17 State but is absent from the State for a temporary
18 or transitory purpose during the taxable year;
19 (B) The estate of a decedent who at his or her
20 death was domiciled in this State;
21 (C) A trust created by a will of a decedent
22 who at his death was domiciled in this State; and
23 (D) An irrevocable trust, the grantor of which
24 was domiciled in this State at the time such trust
25 became irrevocable. For purpose of this
26 subparagraph, a trust shall be considered
27 irrevocable to the extent that the grantor is not
28 treated as the owner thereof under Sections 671
29 through 678 of the Internal Revenue Code.
30 (21) Sales. The term "sales" means all gross
31 receipts of the taxpayer not allocated under Sections
32 301, 302 and 303.
33 (22) State. The term "state" when applied to a
34 jurisdiction other than this State means any state of the
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1 United States, the District of Columbia, the Commonwealth
2 of Puerto Rico, any Territory or Possession of the United
3 States, and any foreign country, or any political
4 subdivision of any of the foregoing. For purposes of the
5 foreign tax credit under Section 601, the term "state"
6 means any state of the United States, the District of
7 Columbia, the Commonwealth of Puerto Rico, and any
8 territory or possession of the United States, or any
9 political subdivision of any of the foregoing, effective
10 for tax years ending on or after December 31, 1989.
11 (23) Taxable year. The term "taxable year" means
12 the calendar year, or the fiscal year ending during such
13 calendar year, upon the basis of which the base income is
14 computed under this Act. "Taxable year" means, in the
15 case of a return made for a fractional part of a year
16 under the provisions of this Act, the period for which
17 such return is made.
18 (24) Taxpayer. The term "taxpayer" means any person
19 subject to the tax imposed by this Act.
20 (25) International banking facility. The term
21 international banking facility shall have the same
22 meaning as is set forth in the Illinois Banking Act or as
23 is set forth in the laws of the United States or
24 regulations of the Board of Governors of the Federal
25 Reserve System.
26 (26) Income Tax Return Preparer.
27 (A) The term "income tax return preparer"
28 means any person who prepares for compensation, or
29 who employs one or more persons to prepare for
30 compensation, any return of tax imposed by this Act
31 or any claim for refund of tax imposed by this Act.
32 The preparation of a substantial portion of a return
33 or claim for refund shall be treated as the
34 preparation of that return or claim for refund.
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1 (B) A person is not an income tax return
2 preparer if all he or she does is
3 (i) furnish typing, reproducing, or other
4 mechanical assistance;
5 (ii) prepare returns or claims for
6 refunds for the employer by whom he or she is
7 regularly and continuously employed;
8 (iii) prepare as a fiduciary returns or
9 claims for refunds for any person; or
10 (iv) prepare claims for refunds for a
11 taxpayer in response to any notice of
12 deficiency issued to that taxpayer or in
13 response to any waiver of restriction after the
14 commencement of an audit of that taxpayer or of
15 another taxpayer if a determination in the
16 audit of the other taxpayer directly or
17 indirectly affects the tax liability of the
18 taxpayer whose claims he or she is preparing.
19 (27) Unitary business group. The term "unitary
20 business group" means a group of persons related through
21 common ownership whose business activities are integrated
22 with, dependent upon and contribute to each other. The
23 group will not include those members whose business
24 activity outside the United States is 80% or more of any
25 such member's total business activity; for purposes of
26 this paragraph and clause (a) (3) (B) (ii) of Section
27 304, business activity within the United States shall be
28 measured by means of the factors ordinarily applicable
29 under subsections (a), (b), (c), (d), or (h) of Section
30 304 except that, in the case of members ordinarily
31 required to apportion business income by means of the 3
32 factor formula of property, payroll and sales specified
33 in subsection (a) of Section 304, including the formula
34 as weighted in subsection (h) of Section 304, such
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1 members shall not use the sales factor in the computation
2 and the results of the property and payroll factor
3 computations of subsection (a) of Section 304 shall be
4 divided by 2 (by one if either the property or payroll
5 factor has a denominator of zero). The computation
6 required by the preceding sentence shall, in each case,
7 involve the division of the member's property, payroll,
8 or revenue miles in the United States, insurance premiums
9 on property or risk in the United States, or financial
10 organization business income from sources within the
11 United States, as the case may be, by the respective
12 worldwide figures for such items. Common ownership in
13 the case of corporations is the direct or indirect
14 control or ownership of more than 50% of the outstanding
15 voting stock of the persons carrying on unitary business
16 activity. Unitary business activity can ordinarily be
17 illustrated where the activities of the members are: (1)
18 in the same general line (such as manufacturing,
19 wholesaling, retailing of tangible personal property,
20 insurance, transportation or finance); or (2) are steps
21 in a vertically structured enterprise or process (such as
22 the steps involved in the production of natural
23 resources, which might include exploration, mining,
24 refining, and marketing); and, in either instance, the
25 members are functionally integrated through the exercise
26 of strong centralized management (where, for example,
27 authority over such matters as purchasing, financing, tax
28 compliance, product line, personnel, marketing and
29 capital investment is not left to each member). In no
30 event, however, will any unitary business group include
31 members which are ordinarily required to apportion
32 business income under different subsections of Section
33 304 except that for tax years ending on or after December
34 31, 1987 this prohibition shall not apply to a unitary
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1 business group composed of one or more taxpayers all of
2 which apportion business income pursuant to subsection
3 (b) of Section 304, or all of which apportion business
4 income pursuant to subsection (d) of Section 304, and a
5 holding company of such single-factor taxpayers (see
6 definition of "financial organization" for rule regarding
7 holding companies of financial organizations). If a
8 unitary business group would, but for the preceding
9 sentence, include members that are ordinarily required to
10 apportion business income under different subsections of
11 Section 304, then for each subsection of Section 304 for
12 which there are two or more members, there shall be a
13 separate unitary business group composed of such members.
14 For purposes of the preceding two sentences, a member is
15 "ordinarily required to apportion business income" under
16 a particular subsection of Section 304 if it would be
17 required to use the apportionment method prescribed by
18 such subsection except for the fact that it derives
19 business income solely from Illinois. If the unitary
20 business group members' accounting periods differ, the
21 common parent's accounting period or, if there is no
22 common parent, the accounting period of the member that
23 is expected to have, on a recurring basis, the greatest
24 Illinois income tax liability must be used to determine
25 whether to use the apportionment method provided in
26 subsection (a) or subsection (h) of Section 304. The
27 prohibition against membership in a unitary business
28 group for taxpayers ordinarily required to apportion
29 income under different subsections of Section 304 does
30 not apply to taxpayers required to apportion income under
31 subsection (a) and subsection (h) of Section 304. The
32 provisions of this amendatory Act of 1998 apply to tax
33 years ending on or after December 31, 1998.
34 (28) Subchapter S corporation. The term
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1 "Subchapter S corporation" means a corporation for which
2 there is in effect an election under Section 1362 of the
3 Internal Revenue Code, or for which there is a federal
4 election to opt out of the provisions of the Subchapter S
5 Revision Act of 1982 and have applied instead the prior
6 federal Subchapter S rules as in effect on July 1, 1982.
7 (b) Other definitions.
8 (1) Words denoting number, gender, and so forth,
9 when used in this Act, where not otherwise distinctly
10 expressed or manifestly incompatible with the intent
11 thereof:
12 (A) Words importing the singular include and
13 apply to several persons, parties or things;
14 (B) Words importing the plural include the
15 singular; and
16 (C) Words importing the masculine gender
17 include the feminine as well.
18 (2) "Company" or "association" as including
19 successors and assigns. The word "company" or
20 "association", when used in reference to a corporation,
21 shall be deemed to embrace the words "successors and
22 assigns of such company or association", and in like
23 manner as if these last-named words, or words of similar
24 import, were expressed.
25 (3) Other terms. Any term used in any Section of
26 this Act with respect to the application of, or in
27 connection with, the provisions of any other Section of
28 this Act shall have the same meaning as in such other
29 Section.
30 (Source: P.A. 90-613, eff. 7-9-98; 91-535, eff. 1-1-00)
31 Section 10. The Use Tax Act is amended by changing
32 Sections 3-5, 9, 10, and 22 as follows:
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1 (35 ILCS 105/3-5) (from Ch. 120, par. 439.3-5)
2 Sec. 3-5. Exemptions. Use of the following tangible
3 personal property is exempt from the tax imposed by this Act:
4 (1) Personal property purchased from a corporation,
5 society, association, foundation, institution, or
6 organization, other than a limited liability company, that is
7 organized and operated as a not-for-profit service enterprise
8 for the benefit of persons 65 years of age or older if the
9 personal property was not purchased by the enterprise for the
10 purpose of resale by the enterprise.
11 (2) Personal property purchased by a not-for-profit
12 Illinois county fair association for use in conducting,
13 operating, or promoting the county fair.
14 (3) Personal property purchased by a not-for-profit arts
15 or cultural organization that establishes, by proof required
16 by the Department by rule, that it has received an exemption
17 under Section 501(c)(3) of the Internal Revenue Code and that
18 is organized and operated for the presentation or support of
19 arts or cultural programming, activities, or services. These
20 organizations include, but are not limited to, music and
21 dramatic arts organizations such as symphony orchestras and
22 theatrical groups, arts and cultural service organizations,
23 local arts councils, visual arts organizations, and media
24 arts organizations.
25 (4) Personal property purchased by a governmental body,
26 by a corporation, society, association, foundation, or
27 institution organized and operated exclusively for
28 charitable, religious, or educational purposes, or by a
29 not-for-profit corporation, society, association, foundation,
30 institution, or organization that has no compensated officers
31 or employees and that is organized and operated primarily for
32 the recreation of persons 55 years of age or older. A limited
33 liability company may qualify for the exemption under this
34 paragraph only if the limited liability company is organized
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1 and operated exclusively for educational purposes. On and
2 after July 1, 1987, however, no entity otherwise eligible for
3 this exemption shall make tax-free purchases unless it has an
4 active exemption identification number issued by the
5 Department.
6 (5) A passenger car that is a replacement vehicle to the
7 extent that the purchase price of the car is subject to the
8 Replacement Vehicle Tax.
9 (6) Graphic arts machinery and equipment, including
10 repair and replacement parts, both new and used, and
11 including that manufactured on special order, certified by
12 the purchaser to be used primarily for graphic arts
13 production, and including machinery and equipment purchased
14 for lease.
15 (7) Farm chemicals.
16 (8) Legal tender, currency, medallions, or gold or
17 silver coinage issued by the State of Illinois, the
18 government of the United States of America, or the government
19 of any foreign country, and bullion.
20 (9) Personal property purchased from a teacher-sponsored
21 student organization affiliated with an elementary or
22 secondary school located in Illinois.
23 (10) A motor vehicle of the first division, a motor
24 vehicle of the second division that is a self-contained motor
25 vehicle designed or permanently converted to provide living
26 quarters for recreational, camping, or travel use, with
27 direct walk through to the living quarters from the driver's
28 seat, or a motor vehicle of the second division that is of
29 the van configuration designed for the transportation of not
30 less than 7 nor more than 16 passengers, as defined in
31 Section 1-146 of the Illinois Vehicle Code, that is used for
32 automobile renting, as defined in the Automobile Renting
33 Occupation and Use Tax Act.
34 (11) Farm machinery and equipment, both new and used,
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1 including that manufactured on special order, certified by
2 the purchaser to be used primarily for production agriculture
3 or State or federal agricultural programs, including
4 individual replacement parts for the machinery and equipment,
5 including machinery and equipment purchased for lease, and
6 including implements of husbandry defined in Section 1-130 of
7 the Illinois Vehicle Code, farm machinery and agricultural
8 chemical and fertilizer spreaders, and nurse wagons required
9 to be registered under Section 3-809 of the Illinois Vehicle
10 Code, but excluding other motor vehicles required to be
11 registered under the Illinois Vehicle Code. Horticultural
12 polyhouses or hoop houses used for propagating, growing, or
13 overwintering plants shall be considered farm machinery and
14 equipment under this item (11). Agricultural chemical tender
15 tanks and dry boxes shall include units sold separately from
16 a motor vehicle required to be licensed and units sold
17 mounted on a motor vehicle required to be licensed if the
18 selling price of the tender is separately stated.
19 Farm machinery and equipment shall include precision
20 farming equipment that is installed or purchased to be
21 installed on farm machinery and equipment including, but not
22 limited to, tractors, harvesters, sprayers, planters,
23 seeders, or spreaders. Precision farming equipment includes,
24 but is not limited to, soil testing sensors, computers,
25 monitors, software, global positioning and mapping systems,
26 and other such equipment.
27 Farm machinery and equipment also includes computers,
28 sensors, software, and related equipment used primarily in
29 the computer-assisted operation of production agriculture
30 facilities, equipment, and activities such as, but not
31 limited to, the collection, monitoring, and correlation of
32 animal and crop data for the purpose of formulating animal
33 diets and agricultural chemicals. This item (11) is exempt
34 from the provisions of Section 3-90.
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1 (12) Fuel and petroleum products sold to or used by an
2 air common carrier, certified by the carrier to be used for
3 consumption, shipment, or storage in the conduct of its
4 business as an air common carrier, for a flight destined for
5 or returning from a location or locations outside the United
6 States without regard to previous or subsequent domestic
7 stopovers.
8 (13) Proceeds of mandatory service charges separately
9 stated on customers' bills for the purchase and consumption
10 of food and beverages purchased at retail from a retailer, to
11 the extent that the proceeds of the service charge are in
12 fact turned over as tips or as a substitute for tips to the
13 employees who participate directly in preparing, serving,
14 hosting or cleaning up the food or beverage function with
15 respect to which the service charge is imposed.
16 (14) Oil field exploration, drilling, and production
17 equipment, including (i) rigs and parts of rigs, rotary rigs,
18 cable tool rigs, and workover rigs, (ii) pipe and tubular
19 goods, including casing and drill strings, (iii) pumps and
20 pump-jack units, (iv) storage tanks and flow lines, (v) any
21 individual replacement part for oil field exploration,
22 drilling, and production equipment, and (vi) machinery and
23 equipment purchased for lease; but excluding motor vehicles
24 required to be registered under the Illinois Vehicle Code.
25 (15) Photoprocessing machinery and equipment, including
26 repair and replacement parts, both new and used, including
27 that manufactured on special order, certified by the
28 purchaser to be used primarily for photoprocessing, and
29 including photoprocessing machinery and equipment purchased
30 for lease.
31 (16) Coal exploration, mining, offhighway hauling,
32 processing, maintenance, and reclamation equipment, including
33 replacement parts and equipment, and including equipment
34 purchased for lease, but excluding motor vehicles required to
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1 be registered under the Illinois Vehicle Code.
2 (17) Distillation machinery and equipment, sold as a
3 unit or kit, assembled or installed by the retailer,
4 certified by the user to be used only for the production of
5 ethyl alcohol that will be used for consumption as motor fuel
6 or as a component of motor fuel for the personal use of the
7 user, and not subject to sale or resale.
8 (18) Manufacturing and assembling machinery and
9 equipment used primarily in the process of manufacturing or
10 assembling tangible personal property for wholesale or retail
11 sale or lease, whether that sale or lease is made directly by
12 the manufacturer or by some other person, whether the
13 materials used in the process are owned by the manufacturer
14 or some other person, or whether that sale or lease is made
15 apart from or as an incident to the seller's engaging in the
16 service occupation of producing machines, tools, dies, jigs,
17 patterns, gauges, or other similar items of no commercial
18 value on special order for a particular purchaser.
19 (19) Personal property delivered to a purchaser or
20 purchaser's donee inside Illinois when the purchase order for
21 that personal property was received by a florist located
22 outside Illinois who has a florist located inside Illinois
23 deliver the personal property.
24 (20) Semen used for artificial insemination of livestock
25 for direct agricultural production.
26 (21) Horses, or interests in horses, registered with and
27 meeting the requirements of any of the Arabian Horse Club
28 Registry of America, Appaloosa Horse Club, American Quarter
29 Horse Association, United States Trotting Association, or
30 Jockey Club, as appropriate, used for purposes of breeding or
31 racing for prizes.
32 (22) Computers and communications equipment utilized for
33 any hospital purpose and equipment used in the diagnosis,
34 analysis, or treatment of hospital patients purchased by a
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1 lessor who leases the equipment, under a lease of one year or
2 longer executed or in effect at the time the lessor would
3 otherwise be subject to the tax imposed by this Act, to a
4 hospital that has been issued an active tax exemption
5 identification number by the Department under Section 1g of
6 the Retailers' Occupation Tax Act. If the equipment is
7 leased in a manner that does not qualify for this exemption
8 or is used in any other non-exempt manner, the lessor shall
9 be liable for the tax imposed under this Act or the Service
10 Use Tax Act, as the case may be, based on the fair market
11 value of the property at the time the non-qualifying use
12 occurs. No lessor shall collect or attempt to collect an
13 amount (however designated) that purports to reimburse that
14 lessor for the tax imposed by this Act or the Service Use Tax
15 Act, as the case may be, if the tax has not been paid by the
16 lessor. If a lessor improperly collects any such amount from
17 the lessee, the lessee shall have a legal right to claim a
18 refund of that amount from the lessor. If, however, that
19 amount is not refunded to the lessee for any reason, the
20 lessor is liable to pay that amount to the Department.
21 (23) Personal property purchased by a lessor who leases
22 the property, under a lease of one year or longer executed
23 or in effect at the time the lessor would otherwise be
24 subject to the tax imposed by this Act, to a governmental
25 body that has been issued an active sales tax exemption
26 identification number by the Department under Section 1g of
27 the Retailers' Occupation Tax Act. If the property is leased
28 in a manner that does not qualify for this exemption or used
29 in any other non-exempt manner, the lessor shall be liable
30 for the tax imposed under this Act or the Service Use Tax
31 Act, as the case may be, based on the fair market value of
32 the property at the time the non-qualifying use occurs. No
33 lessor shall collect or attempt to collect an amount (however
34 designated) that purports to reimburse that lessor for the
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1 tax imposed by this Act or the Service Use Tax Act, as the
2 case may be, if the tax has not been paid by the lessor. If
3 a lessor improperly collects any such amount from the lessee,
4 the lessee shall have a legal right to claim a refund of that
5 amount from the lessor. If, however, that amount is not
6 refunded to the lessee for any reason, the lessor is liable
7 to pay that amount to the Department.
8 (24) Beginning with taxable years ending on or after
9 December 31, 1995 and ending with taxable years ending on or
10 before December 31, 2004, personal property that is donated
11 for disaster relief to be used in a State or federally
12 declared disaster area in Illinois or bordering Illinois by a
13 manufacturer or retailer that is registered in this State to
14 a corporation, society, association, foundation, or
15 institution that has been issued a sales tax exemption
16 identification number by the Department that assists victims
17 of the disaster who reside within the declared disaster area.
18 (25) Beginning with taxable years ending on or after
19 December 31, 1995 and ending with taxable years ending on or
20 before December 31, 2004, personal property that is used in
21 the performance of infrastructure repairs in this State,
22 including but not limited to municipal roads and streets,
23 access roads, bridges, sidewalks, waste disposal systems,
24 water and sewer line extensions, water distribution and
25 purification facilities, storm water drainage and retention
26 facilities, and sewage treatment facilities, resulting from a
27 State or federally declared disaster in Illinois or bordering
28 Illinois when such repairs are initiated on facilities
29 located in the declared disaster area within 6 months after
30 the disaster.
31 (26) Beginning July 1, 1999, game or game birds
32 purchased at a "game breeding and hunting preserve area" or
33 an "exotic game hunting area" as those terms are used in the
34 Wildlife Code or at a hunting enclosure approved through
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1 rules adopted by the Department of Natural Resources. This
2 paragraph is exempt from the provisions of Section 3-90.
3 (27) (26) A motor vehicle, as that term is defined in
4 Section 1-146 of the Illinois Vehicle Code, that is donated
5 to a corporation, limited liability company, society,
6 association, foundation, or institution that is determined by
7 the Department to be organized and operated exclusively for
8 educational purposes. For purposes of this exemption, "a
9 corporation, limited liability company, society, association,
10 foundation, or institution organized and operated exclusively
11 for educational purposes" means all tax-supported public
12 schools, private schools that offer systematic instruction in
13 useful branches of learning by methods common to public
14 schools and that compare favorably in their scope and
15 intensity with the course of study presented in tax-supported
16 schools, and vocational or technical schools or institutes
17 organized and operated exclusively to provide a course of
18 study of not less than 6 weeks duration and designed to
19 prepare individuals to follow a trade or to pursue a manual,
20 technical, mechanical, industrial, business, or commercial
21 occupation.
22 (28) (27) Beginning January 1, 2000, personal property,
23 including food, purchased through fundraising events for the
24 benefit of a public or private elementary or secondary
25 school, a group of those schools, or one or more school
26 districts if the events are sponsored by an entity recognized
27 by the school district that consists primarily of volunteers
28 and includes parents and teachers of the school children.
29 This paragraph does not apply to fundraising events (i) for
30 the benefit of private home instruction or (ii) for which the
31 fundraising entity purchases the personal property sold at
32 the events from another individual or entity that sold the
33 property for the purpose of resale by the fundraising entity
34 and that profits from the sale to the fundraising entity.
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1 This paragraph is exempt from the provisions of Section 3-90.
2 (29) (26) Beginning January 1, 2000, new or used
3 automatic vending machines that prepare and serve hot food
4 and beverages, including coffee, soup, and other items, and
5 replacement parts for these machines. This paragraph is
6 exempt from the provisions of Section 3-90.
7 (30) Food for human consumption that is to be consumed
8 off the premises where it is sold (other than alcoholic
9 beverages, soft drinks, and food that has been prepared for
10 immediate consumption) and prescription and nonprescription
11 medicines, drugs, medical appliances, and insulin, urine
12 testing materials, syringes, and needles used by diabetics,
13 for human use, when purchased for use by a person receiving
14 medical assistance under Article 5 of the Illinois Public Aid
15 Code who resides in a licensed long-term care facility, as
16 defined in the Nursing Home Care Act.
17 (Source: P.A. 90-14, eff. 7-1-97; 90-552, eff. 12-12-97;
18 90-605, eff. 6-30-98; 91-51, eff. 6-30-99; 91-200, eff.
19 7-20-99; 91-439, eff. 8-6-99; 91-637, eff. 8-20-99; 91-644,
20 eff. 8-20-99; revised 9-29-99.)
21 (35 ILCS 105/9) (from Ch. 120, par. 439.9)
22 Sec. 9. Except as to motor vehicles, watercraft,
23 aircraft, and trailers that are required to be registered
24 with an agency of this State, each retailer required or
25 authorized to collect the tax imposed by this Act shall pay
26 to the Department the amount of such tax (except as otherwise
27 provided) at the time when he is required to file his return
28 for the period during which such tax was collected, less a
29 discount of 2.1% prior to January 1, 1990, and 1.75% on and
30 after January 1, 1990, or $5 per calendar year, whichever is
31 greater, which is allowed to reimburse the retailer for
32 expenses incurred in collecting the tax, keeping records,
33 preparing and filing returns, remitting the tax and supplying
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1 data to the Department on request. In the case of retailers
2 who report and pay the tax on a transaction by transaction
3 basis, as provided in this Section, such discount shall be
4 taken with each such tax remittance instead of when such
5 retailer files his periodic return. A retailer need not
6 remit that part of any tax collected by him to the extent
7 that he is required to remit and does remit the tax imposed
8 by the Retailers' Occupation Tax Act, with respect to the
9 sale of the same property.
10 Where such tangible personal property is sold under a
11 conditional sales contract, or under any other form of sale
12 wherein the payment of the principal sum, or a part thereof,
13 is extended beyond the close of the period for which the
14 return is filed, the retailer, in collecting the tax (except
15 as to motor vehicles, watercraft, aircraft, and trailers that
16 are required to be registered with an agency of this State),
17 may collect for each tax return period, only the tax
18 applicable to that part of the selling price actually
19 received during such tax return period.
20 Except as provided in this Section, on or before the
21 twentieth day of each calendar month, such retailer shall
22 file a return for the preceding calendar month. Such return
23 shall be filed on forms prescribed by the Department and
24 shall furnish such information as the Department may
25 reasonably require.
26 The Department may require returns to be filed on a
27 quarterly basis. If so required, a return for each calendar
28 quarter shall be filed on or before the twentieth day of the
29 calendar month following the end of such calendar quarter.
30 The taxpayer shall also file a return with the Department for
31 each of the first two months of each calendar quarter, on or
32 before the twentieth day of the following calendar month,
33 stating:
34 1. The name of the seller;
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1 2. The address of the principal place of business
2 from which he engages in the business of selling tangible
3 personal property at retail in this State;
4 3. The total amount of taxable receipts received by
5 him during the preceding calendar month from sales of
6 tangible personal property by him during such preceding
7 calendar month, including receipts from charge and time
8 sales, but less all deductions allowed by law;
9 4. The amount of credit provided in Section 2d of
10 this Act;
11 5. The amount of tax due;
12 5-5. The signature of the taxpayer; and
13 6. Such other reasonable information as the
14 Department may require.
15 If a taxpayer fails to sign a return within 30 days after
16 the proper notice and demand for signature by the Department,
17 the return shall be considered valid and any amount shown to
18 be due on the return shall be deemed assessed.
19 Beginning October 1, 1993, a taxpayer who has an average
20 monthly tax liability of $150,000 or more shall make all
21 payments required by rules of the Department by electronic
22 funds transfer. Beginning October 1, 1994, a taxpayer who has
23 an average monthly tax liability of $100,000 or more shall
24 make all payments required by rules of the Department by
25 electronic funds transfer. Beginning October 1, 1995, a
26 taxpayer who has an average monthly tax liability of $50,000
27 or more shall make all payments required by rules of the
28 Department by electronic funds transfer. Beginning October 1,
29 2000, a taxpayer who has an annual tax liability of $200,000
30 or more shall make all payments required by rules of the
31 Department by electronic funds transfer. The term "annual
32 tax liability" shall be the sum of the taxpayer's liabilities
33 under this Act, and under all other State and local
34 occupation and use tax laws administered by the Department,
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1 for the immediately preceding calendar year. The term
2 "average monthly tax liability" means the sum of the
3 taxpayer's liabilities under this Act, and under all other
4 State and local occupation and use tax laws administered by
5 the Department, for the immediately preceding calendar year
6 divided by 12.
7 Before August 1 of each year beginning in 1993, the
8 Department shall notify all taxpayers required to make
9 payments by electronic funds transfer. All taxpayers required
10 to make payments by electronic funds transfer shall make
11 those payments for a minimum of one year beginning on October
12 1.
13 Any taxpayer not required to make payments by electronic
14 funds transfer may make payments by electronic funds transfer
15 with the permission of the Department.
16 All taxpayers required to make payment by electronic
17 funds transfer and any taxpayers authorized to voluntarily
18 make payments by electronic funds transfer shall make those
19 payments in the manner authorized by the Department.
20 The Department shall adopt such rules as are necessary to
21 effectuate a program of electronic funds transfer and the
22 requirements of this Section.
23 Before October 1, 2000, if the taxpayer's average monthly
24 tax liability to the Department under this Act, the
25 Retailers' Occupation Tax Act, the Service Occupation Tax
26 Act, the Service Use Tax Act was $10,000 or more during the
27 preceding 4 complete calendar quarters, he shall file a
28 return with the Department each month by the 20th day of the
29 month next following the month during which such tax
30 liability is incurred and shall make payments to the
31 Department on or before the 7th, 15th, 22nd and last day of
32 the month during which such liability is incurred. On and
33 after October 1, 2000, if the taxpayer's average monthly tax
34 liability to the Department under this Act, the Retailers'
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1 Occupation Tax Act, the Service Occupation Tax Act, and the
2 Service Use Tax Act was $20,000 or more during the preceding
3 4 complete calendar quarters, he shall file a return with the
4 Department each month by the 20th day of the month next
5 following the month during which such tax liability is
6 incurred and shall make payment to the Department on or
7 before the 7th, 15th, 22nd and last day of or the month
8 during which such liability is incurred. If the month during
9 which such tax liability is incurred began prior to January
10 1, 1985, each payment shall be in an amount equal to 1/4 of
11 the taxpayer's actual liability for the month or an amount
12 set by the Department not to exceed 1/4 of the average
13 monthly liability of the taxpayer to the Department for the
14 preceding 4 complete calendar quarters (excluding the month
15 of highest liability and the month of lowest liability in
16 such 4 quarter period). If the month during which such tax
17 liability is incurred begins on or after January 1, 1985, and
18 prior to January 1, 1987, each payment shall be in an amount
19 equal to 22.5% of the taxpayer's actual liability for the
20 month or 27.5% of the taxpayer's liability for the same
21 calendar month of the preceding year. If the month during
22 which such tax liability is incurred begins on or after
23 January 1, 1987, and prior to January 1, 1988, each payment
24 shall be in an amount equal to 22.5% of the taxpayer's actual
25 liability for the month or 26.25% of the taxpayer's liability
26 for the same calendar month of the preceding year. If the
27 month during which such tax liability is incurred begins on
28 or after January 1, 1988, and prior to January 1, 1989, or
29 begins on or after January 1, 1996, each payment shall be in
30 an amount equal to 22.5% of the taxpayer's actual liability
31 for the month or 25% of the taxpayer's liability for the same
32 calendar month of the preceding year. If the month during
33 which such tax liability is incurred begins on or after
34 January 1, 1989, and prior to January 1, 1996, each payment
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1 shall be in an amount equal to 22.5% of the taxpayer's actual
2 liability for the month or 25% of the taxpayer's liability
3 for the same calendar month of the preceding year or 100% of
4 the taxpayer's actual liability for the quarter monthly
5 reporting period. The amount of such quarter monthly
6 payments shall be credited against the final tax liability of
7 the taxpayer's return for that month. Before October 1,
8 2000, once applicable, the requirement of the making of
9 quarter monthly payments to the Department shall continue
10 until such taxpayer's average monthly liability to the
11 Department during the preceding 4 complete calendar quarters
12 (excluding the month of highest liability and the month of
13 lowest liability) is less than $9,000, or until such
14 taxpayer's average monthly liability to the Department as
15 computed for each calendar quarter of the 4 preceding
16 complete calendar quarter period is less than $10,000.
17 However, if a taxpayer can show the Department that a
18 substantial change in the taxpayer's business has occurred
19 which causes the taxpayer to anticipate that his average
20 monthly tax liability for the reasonably foreseeable future
21 will fall below the $10,000 threshold stated above, then such
22 taxpayer may petition the Department for change in such
23 taxpayer's reporting status. On and after October 1, 2000,
24 once applicable, the requirement of the making of quarter
25 monthly payments to the Department shall continue until such
26 taxpayer's average monthly liability to the Department during
27 the preceding 4 complete calendar quarters (excluding the
28 month of highest liability and the month of lowest liability)
29 is less than $19,000 or until such taxpayer's average monthly
30 liability to the Department as computed for each calendar
31 quarter of the 4 preceding complete calendar quarter period
32 is less than $20,000. However, if a taxpayer can show the
33 Department that a substantial change in the taxpayer's
34 business has occurred which causes the taxpayer to anticipate
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1 that his average monthly tax liability for the reasonably
2 foreseeable future will fall below the $20,000 threshold
3 stated above, then such taxpayer may petition the Department
4 for a change in such taxpayer's reporting status. The
5 Department shall change such taxpayer's reporting status
6 unless it finds that such change is seasonal in nature and
7 not likely to be long term. If any such quarter monthly
8 payment is not paid at the time or in the amount required by
9 this Section, then the taxpayer shall be liable for penalties
10 and interest on the difference between the minimum amount due
11 and the amount of such quarter monthly payment actually and
12 timely paid, except insofar as the taxpayer has previously
13 made payments for that month to the Department in excess of
14 the minimum payments previously due as provided in this
15 Section. The Department shall make reasonable rules and
16 regulations to govern the quarter monthly payment amount and
17 quarter monthly payment dates for taxpayers who file on other
18 than a calendar monthly basis.
19 If any such payment provided for in this Section exceeds
20 the taxpayer's liabilities under this Act, the Retailers'
21 Occupation Tax Act, the Service Occupation Tax Act and the
22 Service Use Tax Act, as shown by an original monthly return,
23 the Department shall issue to the taxpayer a credit
24 memorandum no later than 30 days after the date of payment,
25 which memorandum may be submitted by the taxpayer to the
26 Department in payment of tax liability subsequently to be
27 remitted by the taxpayer to the Department or be assigned by
28 the taxpayer to a similar taxpayer under this Act, the
29 Retailers' Occupation Tax Act, the Service Occupation Tax Act
30 or the Service Use Tax Act, in accordance with reasonable
31 rules and regulations to be prescribed by the Department,
32 except that if such excess payment is shown on an original
33 monthly return and is made after December 31, 1986, no credit
34 memorandum shall be issued, unless requested by the taxpayer.
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1 If no such request is made, the taxpayer may credit such
2 excess payment against tax liability subsequently to be
3 remitted by the taxpayer to the Department under this Act,
4 the Retailers' Occupation Tax Act, the Service Occupation Tax
5 Act or the Service Use Tax Act, in accordance with reasonable
6 rules and regulations prescribed by the Department. If the
7 Department subsequently determines that all or any part of
8 the credit taken was not actually due to the taxpayer, the
9 taxpayer's 2.1% or 1.75% vendor's discount shall be reduced
10 by 2.1% or 1.75% of the difference between the credit taken
11 and that actually due, and the taxpayer shall be liable for
12 penalties and interest on such difference.
13 If the retailer is otherwise required to file a monthly
14 return and if the retailer's average monthly tax liability to
15 the Department does not exceed $200, the Department may
16 authorize his returns to be filed on a quarter annual basis,
17 with the return for January, February, and March of a given
18 year being due by April 20 of such year; with the return for
19 April, May and June of a given year being due by July 20 of
20 such year; with the return for July, August and September of
21 a given year being due by October 20 of such year, and with
22 the return for October, November and December of a given year
23 being due by January 20 of the following year.
24 If the retailer is otherwise required to file a monthly
25 or quarterly return and if the retailer's average monthly tax
26 liability to the Department does not exceed $50, the
27 Department may authorize his returns to be filed on an annual
28 basis, with the return for a given year being due by January
29 20 of the following year.
30 Such quarter annual and annual returns, as to form and
31 substance, shall be subject to the same requirements as
32 monthly returns.
33 Notwithstanding any other provision in this Act
34 concerning the time within which a retailer may file his
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1 return, in the case of any retailer who ceases to engage in a
2 kind of business which makes him responsible for filing
3 returns under this Act, such retailer shall file a final
4 return under this Act with the Department not more than one
5 month after discontinuing such business.
6 In addition, with respect to motor vehicles, watercraft,
7 aircraft, and trailers that are required to be registered
8 with an agency of this State, every retailer selling this
9 kind of tangible personal property shall file, with the
10 Department, upon a form to be prescribed and supplied by the
11 Department, a separate return for each such item of tangible
12 personal property which the retailer sells, except that if
13 where, in the same transaction, (i) a retailer of aircraft,
14 watercraft, motor vehicles or trailers transfers more than
15 one aircraft, watercraft, motor vehicle or trailer to another
16 aircraft, watercraft, motor vehicle or trailer retailer for
17 the purpose of resale or (ii) a retailer of aircraft,
18 watercraft, motor vehicles, or trailers transfers more than
19 one aircraft, watercraft, motor vehicle, or trailer to a
20 purchaser for use as a qualifying rolling stock as provided
21 in Section 3-55 of this Act, then that seller for resale may
22 report the transfer of all the aircraft, watercraft, motor
23 vehicles or trailers involved in that transaction to the
24 Department on the same uniform invoice-transaction reporting
25 return form. For purposes of this Section, "watercraft"
26 means a Class 2, Class 3, or Class 4 watercraft as defined in
27 Section 3-2 of the Boat Registration and Safety Act, a
28 personal watercraft, or any boat equipped with an inboard
29 motor.
30 The transaction reporting return in the case of motor
31 vehicles or trailers that are required to be registered with
32 an agency of this State, shall be the same document as the
33 Uniform Invoice referred to in Section 5-402 of the Illinois
34 Vehicle Code and must show the name and address of the
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1 seller; the name and address of the purchaser; the amount of
2 the selling price including the amount allowed by the
3 retailer for traded-in property, if any; the amount allowed
4 by the retailer for the traded-in tangible personal property,
5 if any, to the extent to which Section 2 of this Act allows
6 an exemption for the value of traded-in property; the balance
7 payable after deducting such trade-in allowance from the
8 total selling price; the amount of tax due from the retailer
9 with respect to such transaction; the amount of tax collected
10 from the purchaser by the retailer on such transaction (or
11 satisfactory evidence that such tax is not due in that
12 particular instance, if that is claimed to be the fact); the
13 place and date of the sale; a sufficient identification of
14 the property sold; such other information as is required in
15 Section 5-402 of the Illinois Vehicle Code, and such other
16 information as the Department may reasonably require.
17 The transaction reporting return in the case of
18 watercraft and aircraft must show the name and address of the
19 seller; the name and address of the purchaser; the amount of
20 the selling price including the amount allowed by the
21 retailer for traded-in property, if any; the amount allowed
22 by the retailer for the traded-in tangible personal property,
23 if any, to the extent to which Section 2 of this Act allows
24 an exemption for the value of traded-in property; the balance
25 payable after deducting such trade-in allowance from the
26 total selling price; the amount of tax due from the retailer
27 with respect to such transaction; the amount of tax collected
28 from the purchaser by the retailer on such transaction (or
29 satisfactory evidence that such tax is not due in that
30 particular instance, if that is claimed to be the fact); the
31 place and date of the sale, a sufficient identification of
32 the property sold, and such other information as the
33 Department may reasonably require.
34 Such transaction reporting return shall be filed not
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1 later than 20 days after the date of delivery of the item
2 that is being sold, but may be filed by the retailer at any
3 time sooner than that if he chooses to do so. The
4 transaction reporting return and tax remittance or proof of
5 exemption from the tax that is imposed by this Act may be
6 transmitted to the Department by way of the State agency with
7 which, or State officer with whom, the tangible personal
8 property must be titled or registered (if titling or
9 registration is required) if the Department and such agency
10 or State officer determine that this procedure will expedite
11 the processing of applications for title or registration.
12 With each such transaction reporting return, the retailer
13 shall remit the proper amount of tax due (or shall submit
14 satisfactory evidence that the sale is not taxable if that is
15 the case), to the Department or its agents, whereupon the
16 Department shall issue, in the purchaser's name, a tax
17 receipt (or a certificate of exemption if the Department is
18 satisfied that the particular sale is tax exempt) which such
19 purchaser may submit to the agency with which, or State
20 officer with whom, he must title or register the tangible
21 personal property that is involved (if titling or
22 registration is required) in support of such purchaser's
23 application for an Illinois certificate or other evidence of
24 title or registration to such tangible personal property.
25 No retailer's failure or refusal to remit tax under this
26 Act precludes a user, who has paid the proper tax to the
27 retailer, from obtaining his certificate of title or other
28 evidence of title or registration (if titling or registration
29 is required) upon satisfying the Department that such user
30 has paid the proper tax (if tax is due) to the retailer. The
31 Department shall adopt appropriate rules to carry out the
32 mandate of this paragraph.
33 If the user who would otherwise pay tax to the retailer
34 wants the transaction reporting return filed and the payment
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1 of tax or proof of exemption made to the Department before
2 the retailer is willing to take these actions and such user
3 has not paid the tax to the retailer, such user may certify
4 to the fact of such delay by the retailer, and may (upon the
5 Department being satisfied of the truth of such
6 certification) transmit the information required by the
7 transaction reporting return and the remittance for tax or
8 proof of exemption directly to the Department and obtain his
9 tax receipt or exemption determination, in which event the
10 transaction reporting return and tax remittance (if a tax
11 payment was required) shall be credited by the Department to
12 the proper retailer's account with the Department, but
13 without the 2.1% or 1.75% discount provided for in this
14 Section being allowed. When the user pays the tax directly
15 to the Department, he shall pay the tax in the same amount
16 and in the same form in which it would be remitted if the tax
17 had been remitted to the Department by the retailer.
18 Where a retailer collects the tax with respect to the
19 selling price of tangible personal property which he sells
20 and the purchaser thereafter returns such tangible personal
21 property and the retailer refunds the selling price thereof
22 to the purchaser, such retailer shall also refund, to the
23 purchaser, the tax so collected from the purchaser. When
24 filing his return for the period in which he refunds such tax
25 to the purchaser, the retailer may deduct the amount of the
26 tax so refunded by him to the purchaser from any other use
27 tax which such retailer may be required to pay or remit to
28 the Department, as shown by such return, if the amount of the
29 tax to be deducted was previously remitted to the Department
30 by such retailer. If the retailer has not previously
31 remitted the amount of such tax to the Department, he is
32 entitled to no deduction under this Act upon refunding such
33 tax to the purchaser.
34 Any retailer filing a return under this Section shall
HB4431 Engrossed -88- LRB9110442SMdvB
1 also include (for the purpose of paying tax thereon) the
2 total tax covered by such return upon the selling price of
3 tangible personal property purchased by him at retail from a
4 retailer, but as to which the tax imposed by this Act was not
5 collected from the retailer filing such return, and such
6 retailer shall remit the amount of such tax to the Department
7 when filing such return.
8 If experience indicates such action to be practicable,
9 the Department may prescribe and furnish a combination or
10 joint return which will enable retailers, who are required to
11 file returns hereunder and also under the Retailers'
12 Occupation Tax Act, to furnish all the return information
13 required by both Acts on the one form.
14 Where the retailer has more than one business registered
15 with the Department under separate registration under this
16 Act, such retailer may not file each return that is due as a
17 single return covering all such registered businesses, but
18 shall file separate returns for each such registered
19 business.
20 Beginning January 1, 1990, each month the Department
21 shall pay into the State and Local Sales Tax Reform Fund, a
22 special fund in the State Treasury which is hereby created,
23 the net revenue realized for the preceding month from the 1%
24 tax on sales of food for human consumption which is to be
25 consumed off the premises where it is sold (other than
26 alcoholic beverages, soft drinks and food which has been
27 prepared for immediate consumption) and prescription and
28 nonprescription medicines, drugs, medical appliances and
29 insulin, urine testing materials, syringes and needles used
30 by diabetics.
31 Beginning January 1, 1990, each month the Department
32 shall pay into the County and Mass Transit District Fund 4%
33 of the net revenue realized for the preceding month from the
34 6.25% general rate on the selling price of tangible personal
HB4431 Engrossed -89- LRB9110442SMdvB
1 property which is purchased outside Illinois at retail from a
2 retailer and which is titled or registered by an agency of
3 this State's government.
4 Beginning January 1, 1990, each month the Department
5 shall pay into the State and Local Sales Tax Reform Fund, a
6 special fund in the State Treasury, 20% of the net revenue
7 realized for the preceding month from the 6.25% general rate
8 on the selling price of tangible personal property, other
9 than tangible personal property which is purchased outside
10 Illinois at retail from a retailer and which is titled or
11 registered by an agency of this State's government.
12 Beginning January 1, 1990, each month the Department
13 shall pay into the Local Government Tax Fund 16% of the net
14 revenue realized for the preceding month from the 6.25%
15 general rate on the selling price of tangible personal
16 property which is purchased outside Illinois at retail from a
17 retailer and which is titled or registered by an agency of
18 this State's government.
19 Of the remainder of the moneys received by the Department
20 pursuant to this Act, (a) 1.75% thereof shall be paid into
21 the Build Illinois Fund and (b) prior to July 1, 1989, 2.2%
22 and on and after July 1, 1989, 3.8% thereof shall be paid
23 into the Build Illinois Fund; provided, however, that if in
24 any fiscal year the sum of (1) the aggregate of 2.2% or 3.8%,
25 as the case may be, of the moneys received by the Department
26 and required to be paid into the Build Illinois Fund pursuant
27 to Section 3 of the Retailers' Occupation Tax Act, Section 9
28 of the Use Tax Act, Section 9 of the Service Use Tax Act, and
29 Section 9 of the Service Occupation Tax Act, such Acts being
30 hereinafter called the "Tax Acts" and such aggregate of 2.2%
31 or 3.8%, as the case may be, of moneys being hereinafter
32 called the "Tax Act Amount", and (2) the amount transferred
33 to the Build Illinois Fund from the State and Local Sales Tax
34 Reform Fund shall be less than the Annual Specified Amount
HB4431 Engrossed -90- LRB9110442SMdvB
1 (as defined in Section 3 of the Retailers' Occupation Tax
2 Act), an amount equal to the difference shall be immediately
3 paid into the Build Illinois Fund from other moneys received
4 by the Department pursuant to the Tax Acts; and further
5 provided, that if on the last business day of any month the
6 sum of (1) the Tax Act Amount required to be deposited into
7 the Build Illinois Bond Account in the Build Illinois Fund
8 during such month and (2) the amount transferred during such
9 month to the Build Illinois Fund from the State and Local
10 Sales Tax Reform Fund shall have been less than 1/12 of the
11 Annual Specified Amount, an amount equal to the difference
12 shall be immediately paid into the Build Illinois Fund from
13 other moneys received by the Department pursuant to the Tax
14 Acts; and, further provided, that in no event shall the
15 payments required under the preceding proviso result in
16 aggregate payments into the Build Illinois Fund pursuant to
17 this clause (b) for any fiscal year in excess of the greater
18 of (i) the Tax Act Amount or (ii) the Annual Specified Amount
19 for such fiscal year; and, further provided, that the amounts
20 payable into the Build Illinois Fund under this clause (b)
21 shall be payable only until such time as the aggregate amount
22 on deposit under each trust indenture securing Bonds issued
23 and outstanding pursuant to the Build Illinois Bond Act is
24 sufficient, taking into account any future investment income,
25 to fully provide, in accordance with such indenture, for the
26 defeasance of or the payment of the principal of, premium, if
27 any, and interest on the Bonds secured by such indenture and
28 on any Bonds expected to be issued thereafter and all fees
29 and costs payable with respect thereto, all as certified by
30 the Director of the Bureau of the Budget. If on the last
31 business day of any month in which Bonds are outstanding
32 pursuant to the Build Illinois Bond Act, the aggregate of the
33 moneys deposited in the Build Illinois Bond Account in the
34 Build Illinois Fund in such month shall be less than the
HB4431 Engrossed -91- LRB9110442SMdvB
1 amount required to be transferred in such month from the
2 Build Illinois Bond Account to the Build Illinois Bond
3 Retirement and Interest Fund pursuant to Section 13 of the
4 Build Illinois Bond Act, an amount equal to such deficiency
5 shall be immediately paid from other moneys received by the
6 Department pursuant to the Tax Acts to the Build Illinois
7 Fund; provided, however, that any amounts paid to the Build
8 Illinois Fund in any fiscal year pursuant to this sentence
9 shall be deemed to constitute payments pursuant to clause (b)
10 of the preceding sentence and shall reduce the amount
11 otherwise payable for such fiscal year pursuant to clause (b)
12 of the preceding sentence. The moneys received by the
13 Department pursuant to this Act and required to be deposited
14 into the Build Illinois Fund are subject to the pledge, claim
15 and charge set forth in Section 12 of the Build Illinois Bond
16 Act.
17 Subject to payment of amounts into the Build Illinois
18 Fund as provided in the preceding paragraph or in any
19 amendment thereto hereafter enacted, the following specified
20 monthly installment of the amount requested in the
21 certificate of the Chairman of the Metropolitan Pier and
22 Exposition Authority provided under Section 8.25f of the
23 State Finance Act, but not in excess of the sums designated
24 as "Total Deposit", shall be deposited in the aggregate from
25 collections under Section 9 of the Use Tax Act, Section 9 of
26 the Service Use Tax Act, Section 9 of the Service Occupation
27 Tax Act, and Section 3 of the Retailers' Occupation Tax Act
28 into the McCormick Place Expansion Project Fund in the
29 specified fiscal years.
30 Fiscal Year Total Deposit
31 1993 $0
32 1994 53,000,000
33 1995 58,000,000
34 1996 61,000,000
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1 1997 64,000,000
2 1998 68,000,000
3 1999 71,000,000
4 2000 75,000,000
5 2001 80,000,000
6 2002 84,000,000
7 2003 89,000,000
8 2004 93,000,000
9 2005 97,000,000
10 2006 102,000,000
11 2007 108,000,000
12 2008 115,000,000
13 2009 120,000,000
14 2010 126,000,000
15 2011 132,000,000
16 2012 138,000,000
17 2013 and 145,000,000
18 each fiscal year
19 thereafter that bonds
20 are outstanding under
21 Section 13.2 of the
22 Metropolitan Pier and
23 Exposition Authority
24 Act, but not after fiscal year 2029.
25 Beginning July 20, 1993 and in each month of each fiscal
26 year thereafter, one-eighth of the amount requested in the
27 certificate of the Chairman of the Metropolitan Pier and
28 Exposition Authority for that fiscal year, less the amount
29 deposited into the McCormick Place Expansion Project Fund by
30 the State Treasurer in the respective month under subsection
31 (g) of Section 13 of the Metropolitan Pier and Exposition
32 Authority Act, plus cumulative deficiencies in the deposits
33 required under this Section for previous months and years,
34 shall be deposited into the McCormick Place Expansion Project
HB4431 Engrossed -93- LRB9110442SMdvB
1 Fund, until the full amount requested for the fiscal year,
2 but not in excess of the amount specified above as "Total
3 Deposit", has been deposited.
4 Subject to payment of amounts into the Build Illinois
5 Fund and the McCormick Place Expansion Project Fund pursuant
6 to the preceding paragraphs or in any amendment thereto
7 hereafter enacted, each month the Department shall pay into
8 the Local Government Distributive Fund .4% of the net revenue
9 realized for the preceding month from the 5% general rate, or
10 .4% of 80% of the net revenue realized for the preceding
11 month from the 6.25% general rate, as the case may be, on the
12 selling price of tangible personal property which amount
13 shall, subject to appropriation, be distributed as provided
14 in Section 2 of the State Revenue Sharing Act. No payments or
15 distributions pursuant to this paragraph shall be made if the
16 tax imposed by this Act on photoprocessing products is
17 declared unconstitutional, or if the proceeds from such tax
18 are unavailable for distribution because of litigation.
19 Subject to payment of amounts into the Build Illinois
20 Fund, the McCormick Place Expansion Project Fund, and the
21 Local Government Distributive Fund pursuant to the preceding
22 paragraphs or in any amendments thereto hereafter enacted,
23 beginning July 1, 1993, the Department shall each month pay
24 into the Illinois Tax Increment Fund 0.27% of 80% of the net
25 revenue realized for the preceding month from the 6.25%
26 general rate on the selling price of tangible personal
27 property.
28 Of the remainder of the moneys received by the Department
29 pursuant to this Act, 75% thereof shall be paid into the
30 State Treasury and 25% shall be reserved in a special account
31 and used only for the transfer to the Common School Fund as
32 part of the monthly transfer from the General Revenue Fund in
33 accordance with Section 8a of the State Finance Act.
34 As soon as possible after the first day of each month,
HB4431 Engrossed -94- LRB9110442SMdvB
1 upon certification of the Department of Revenue, the
2 Comptroller shall order transferred and the Treasurer shall
3 transfer from the General Revenue Fund to the Motor Fuel Tax
4 Fund an amount equal to 1.7% of 80% of the net revenue
5 realized under this Act for the second preceding month.
6 Beginning April 1, 2000, this transfer is no longer required
7 and shall not be made.
8 Net revenue realized for a month shall be the revenue
9 collected by the State pursuant to this Act, less the amount
10 paid out during that month as refunds to taxpayers for
11 overpayment of liability.
12 For greater simplicity of administration, manufacturers,
13 importers and wholesalers whose products are sold at retail
14 in Illinois by numerous retailers, and who wish to do so, may
15 assume the responsibility for accounting and paying to the
16 Department all tax accruing under this Act with respect to
17 such sales, if the retailers who are affected do not make
18 written objection to the Department to this arrangement.
19 (Source: P.A. 90-491, eff. 1-1-99; 90-612, eff. 7-8-98;
20 91-37, eff. 7-1-99; 91-51, eff. 6-30-99; 91-101, eff.
21 7-12-99; 91-541, eff. 8-13-99; revised 9-29-99.)
22 (35 ILCS 105/10) (from Ch. 120, par. 439.10)
23 Sec. 10. Except as to motor vehicles, and aircraft,
24 watercraft, and trailers, when tangible personal property is
25 purchased from a retailer for use in this State by a
26 purchaser who did not pay the tax imposed by this Act to the
27 retailer, and who does not file returns with the Department
28 as a retailer under Section 9 of this Act, such purchaser (by
29 the last day of the month following the calendar month in
30 which such purchaser makes any payment upon the selling price
31 of such property) shall, except as provided in this Section,
32 file a return with the Department and pay the tax upon that
33 portion of the selling price so paid by the purchaser during
HB4431 Engrossed -95- LRB9110442SMdvB
1 the preceding calendar month. When tangible personal
2 property, including but not limited to motor vehicles and
3 aircraft, is purchased by a lessor, under a lease for one
4 year or longer, executed or in effect at the time of purchase
5 to an interstate carrier for hire, who did not pay the tax
6 imposed by this Act to the retailer, such lessor (by the last
7 day of the month following the calendar month in which such
8 property reverts to the use of such lessor) shall file a
9 return with the Department and pay the tax upon the fair
10 market value of such property on the date of such reversion.
11 However, in determining the fair market value at the time of
12 reversion, the fair market value of such property shall not
13 exceed the original purchase price of the property that was
14 paid by the lessor at the time of purchase. Such return shall
15 be filed on a form prescribed by the Department and shall
16 contain such information as the Department may reasonably
17 require. Such return and payment from the purchaser shall be
18 submitted to the Department sooner than the last day of the
19 month after the month in which the purchase is made to the
20 extent that that may be necessary in order to secure the
21 title to a motor vehicle or the certificate of registration
22 for an aircraft. However, except as to motor vehicles and
23 aircraft, if the purchaser's annual use tax liability does
24 not exceed $600, the purchaser may file the return on an
25 annual basis on or before April 15th of the year following
26 the year use tax liability was incurred.
27 In addition with respect to motor vehicles, and aircraft,
28 watercraft, and trailers, a purchaser of such tangible
29 personal property for use in this State, who purchases such
30 tangible personal property from an out-of-state retailer,
31 shall file with the Department, upon a form to be prescribed
32 and supplied by the Department, a return for each such item
33 of tangible personal property purchased, except that if, in
34 the same transaction, (i) a purchaser of motor vehicles,
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1 aircraft, watercraft, or trailers who is a retailer of motor
2 vehicles, aircraft, watercraft, or trailers purchases more
3 than one motor vehicle, aircraft, watercraft, or trailer for
4 the purpose of resale or (ii) a purchaser of motor vehicles,
5 aircraft, watercraft, or trailers purchases more than one
6 motor vehicle, aircraft, watercraft, or trailer for use as
7 qualifying rolling stock as provided in Section 3-55 of this
8 Act, then the purchaser may report the purchase of all motor
9 vehicles, aircraft, watercraft, or trailers involved in that
10 transaction to the Department on a single return prescribed
11 by the Department. Such return in the case of motor vehicles
12 and aircraft must show the name and address of the seller,
13 the name, address of purchaser, the amount of the selling
14 price including the amount allowed by the retailer for traded
15 in property, if any; the amount allowed by the retailer for
16 the traded-in tangible personal property, if any, to the
17 extent to which Section 2 of this Act allows an exemption for
18 the value of traded-in property; the balance payable after
19 deducting such trade-in allowance from the total selling
20 price; the amount of tax due from the purchaser with respect
21 to such transaction; the amount of tax collected from the
22 purchaser by the retailer on such transaction (or
23 satisfactory evidence that such tax is not due in that
24 particular instance if that is claimed to be the fact); the
25 place and date of the sale, a sufficient identification of
26 the property sold, and such other information as the
27 Department may reasonably require.
28 Such return shall be filed not later than 30 days after
29 such motor vehicle or aircraft is brought into this State for
30 use.
31 For purposes of this Section, "watercraft" means a Class
32 2, Class 3, or Class 4 watercraft as defined in Section 3-2
33 of the Boat Registration and Safety Act, a personal
34 watercraft, or any boat equipped with an inboard motor.
HB4431 Engrossed -97- LRB9110442SMdvB
1 The return and tax remittance or proof of exemption from
2 the tax that is imposed by this Act may be transmitted to the
3 Department by way of the State agency with which, or State
4 officer with whom, the tangible personal property must be
5 titled or registered (if titling or registration is required)
6 if the Department and such agency or State officer determine
7 that this procedure will expedite the processing of
8 applications for title or registration.
9 With each such return, the purchaser shall remit the
10 proper amount of tax due (or shall submit satisfactory
11 evidence that the sale is not taxable if that is the case),
12 to the Department or its agents, whereupon the Department
13 shall issue, in the purchaser's name, a tax receipt (or a
14 certificate of exemption if the Department is satisfied that
15 the particular sale is tax exempt) which such purchaser may
16 submit to the agency with which, or State officer with whom,
17 he must title or register the tangible personal property that
18 is involved (if titling or registration is required) in
19 support of such purchaser's application for an Illinois
20 certificate or other evidence of title or registration to
21 such tangible personal property.
22 When a purchaser pays a tax imposed by this Act directly
23 to the Department, the Department (upon request therefor from
24 such purchaser) shall issue an appropriate receipt to such
25 purchaser showing that he has paid such tax to the
26 Department. Such receipt shall be sufficient to relieve the
27 purchaser from further liability for the tax to which such
28 receipt may refer.
29 A user who is liable to pay use tax directly to the
30 Department only occasionally and not on a frequently
31 recurring basis, and who is not required to file returns with
32 the Department as a retailer under Section 9 of this Act, or
33 under the "Retailers' Occupation Tax Act", or as a registrant
34 with the Department under the "Service Occupation Tax Act" or
HB4431 Engrossed -98- LRB9110442SMdvB
1 the "Service Use Tax Act", need not register with the
2 Department. However, if such a user has a frequently
3 recurring direct use tax liability to pay to the Department,
4 such user shall be required to register with the Department
5 on forms prescribed by the Department and to obtain and
6 display a certificate of registration from the Department.
7 In that event, all of the provisions of Section 9 of this Act
8 concerning the filing of regular monthly, quarterly or annual
9 tax returns and all of the provisions of Section 2a of the
10 "Retailers' Occupation Tax Act" concerning the requirements
11 for registrants to post bond or other security with the
12 Department, as the provisions of such sections now exist or
13 may hereafter be amended, shall apply to such users to the
14 same extent as if such provisions were included herein.
15 (Source: P.A. 91-541, eff. 8-13-99.)
16 (35 ILCS 105/22) (from Ch. 120, par. 439.22)
17 Sec. 22. If it is determined that the Department should
18 issue a credit or refund under this Act, the Department may
19 first apply the amount thereof against any amount of tax or
20 penalty or interest due hereunder, or under the "Retailers'
21 Occupation Tax Act", the "Service Occupation Tax Act", the
22 "Service Use Tax Act", any local occupation or use tax
23 administered by the Department the "Municipal Retailers'
24 Occupation Tax Act", the "Municipal Use Tax Act", the
25 "Municipal Service Occupation Tax Act", the "County
26 Retailers' Occupation Tax Act", the "County Supplementary
27 Retailers' Occupation Tax Act", the "County Service
28 Occupation Tax Act", the "County Supplementary Service
29 Occupation Tax Act", the "County Use Tax Act", the "County
30 Supplementary Use Tax Act", Section 4 of the "Water
31 Commission Act of 1985", subsections (b), (c) and (d) of
32 Section 5.01 of the "Local Mass Transit District Act", or
33 subsections (e), (f) and (g) of Section 4.03 of the "Regional
HB4431 Engrossed -99- LRB9110442SMdvB
1 Transportation Authority Act", from the person entitled to
2 such credit or refund. For this purpose, if proceedings are
3 pending to determine whether or not any tax or penalty or
4 interest is due under this Act or under the "Retailers'
5 Occupation Tax Act", the "Service Occupation Tax Act", the
6 "Service Use Tax Act", any local occupation or use tax
7 administered by the Department the "Municipal Retailers'
8 Occupation Tax Act", the "Municipal Use Tax Act", the
9 "Municipal Service Occupation Tax Act", the "County
10 Retailers' Occupation Tax Act", the "County Supplementary
11 Retailers' Occupation Tax Act", the "County Service
12 Occupation Tax Act", the "County Supplementary Service
13 Occupation Tax Act", the "County Use Tax Act", the "County
14 Supplementary Use Tax Act", Section 4 of the "Water
15 Commission Act of 1985", subsections (b), (c) and (d) of
16 Section 5.01 of the "Local Mass Transit District Act", or
17 subsections (e), (f) and (g) of Section 4.03 of the "Regional
18 Transportation Authority Act", from such person, the
19 Department may withhold issuance of the credit or refund
20 pending the final disposition of such proceedings and may
21 apply such credit or refund against any amount found to be
22 due to the Department as a result of such proceedings. The
23 balance, if any, of the credit or refund shall be issued to
24 the person entitled thereto.
25 Any credit memorandum issued hereunder may be used by the
26 authorized holder thereof to pay any tax or penalty or
27 interest due or to become due under this Act or under the
28 "Retailers' Occupation Tax Act", the "Service Occupation Tax
29 Act", the "Service Use Tax Act", any local occupation or use
30 tax administered by the Department the "Municipal Retailers'
31 Occupation Tax Act", the "Municipal Use Tax Act", the
32 "Municipal Service Occupation Tax Act", the "County
33 Retailers' Occupation Tax Act", the "County Supplementary
34 Retailers' Occupation Tax Act", the "County Service
HB4431 Engrossed -100- LRB9110442SMdvB
1 Occupation Tax Act", the "County Supplementary Service
2 Occupation Tax Act", the "County Use Tax Act", the "County
3 Supplementary Use Tax Act", Section 4 of the "Water
4 Commission Act of 1985", subsections (b), (c) and (d) of
5 Section 5.01 of the "Local Mass Transit District Act", or
6 subsections (e), (f) and (g) of Section 4.03 of the "Regional
7 Transportation Authority Act", from such holder. Subject to
8 reasonable rules of the Department, a credit memorandum
9 issued hereunder may be assigned by the holder thereof to any
10 other person for use in paying tax or penalty or interest
11 which may be due or become due under this Act or under the
12 "Retailers' Occupation Tax Act", the "Service Occupation Tax
13 Act" or the "Service Use Tax Act", from the assignee.
14 In any case in which there has been an erroneous refund
15 of tax payable under this Act, a notice of tax liability may
16 be issued at any time within 3 years from the making of that
17 refund, or within 5 years from the making of that refund if
18 it appears that any part of the refund was induced by fraud
19 or the misrepresentation of a material fact. The amount of
20 any proposed assessment set forth in the notice shall be
21 limited to the amount of the erroneous refund.
22 (Source: P.A. 87-876.)
23 Section 15. The Service Use Tax Act is amended by
24 changing Section 20 as follows:
25 (35 ILCS 110/20) (from Ch. 120, par. 439.50)
26 Sec. 20. If it is determined that the Department should
27 issue a credit or refund hereunder, the Department may first
28 apply the amount thereof against any amount of tax or penalty
29 or interest due hereunder, or under the Service Occupation
30 Tax Act, the Retailers' Occupation Tax Act, the Use Tax Act,
31 any local occupation or use tax administered by the
32 Department the Municipal Retailers' Occupation Tax Act, the
HB4431 Engrossed -101- LRB9110442SMdvB
1 Municipal Use Tax Act, the Municipal Service Occupation Tax
2 Act, the County Retailers' Occupation Tax Act, the County
3 Supplementary Retailers' Occupation Tax Act, the County
4 Service Occupation Tax Act, the County Supplementary Service
5 Occupation Tax Act, the County Use Tax Act, the County
6 Supplementary Use Tax Act, Section 4 of the Water Commission
7 Act of 1985, subsections (b), (c) and (d) of Section 5.01 of
8 the Local Mass Transit District Act, or subsections (e), (f)
9 and (g) of Section 4.03 of the Regional Transportation
10 Authority Act, from the person entitled to such credit or
11 refund. For this purpose, if proceedings are pending to
12 determine whether or not any tax or penalty or interest is
13 due hereunder, or under the Service Occupation Tax Act, the
14 Retailers' Occupation Tax Act, the Use Tax Act, any local
15 occupation or use tax administered by the Department the
16 Municipal Retailers' Occupation Tax Act, the Municipal Use
17 Tax Act, the Municipal Service Occupation Tax Act, the County
18 Retailers' Occupation Tax Act, the County Supplementary
19 Retailers' Occupation Tax Act, the County Service Occupation
20 Tax Act, the County Supplementary Service Occupation Tax Act,
21 the County Use Tax Act, the County Supplementary Use Tax Act,
22 Section 4 of the Water Commission Act of 1985, subsections
23 (b), (c) and (d) of Section 5.01 of the Local Mass Transit
24 District Act, or subsections (e), (f) and (g) of Section 4.03
25 of the Regional Transportation Authority Act, from such
26 person, the Department may withhold issuance of the credit or
27 refund pending the final disposition of such proceedings and
28 may apply such credit or refund against any amount found to
29 be due to the Department as a result of such proceedings. The
30 balance, if any, of the credit or refund shall be issued to
31 the person entitled thereto.
32 Any credit memorandum issued hereunder may be used by the
33 authorized holder thereof to pay any tax or penalty or
34 interest due or to become due under this Act, the Service
HB4431 Engrossed -102- LRB9110442SMdvB
1 Occupation Tax Act, the Retailers' Occupation Tax Act, the
2 Use Tax Act, any local occupation or use tax administered by
3 the Department the Municipal Retailers' Occupation Tax Act,
4 the Municipal Use Tax Act, the Municipal Service Occupation
5 Tax Act, the County Retailers' Occupation Tax Act, the County
6 Supplementary Retailers' Occupation Tax Act, the County
7 Service Occupation Tax Act, the County Supplementary Service
8 Occupation Tax Act, the County Use Tax Act, the County
9 Supplementary Use Tax Act, Section 4 of the Water Commission
10 Act of 1985, subsections (b), (c) and (d) of Section 5.01 of
11 the Local Mass Transit District Act, or subsections (e), (f)
12 and (g) of Section 4.03 of the Regional Transportation
13 Authority Act, from such holder. Subject to reasonable rules
14 of the Department, a credit memorandum issued hereunder may
15 be assigned by the holder thereof to any other person for use
16 in paying tax or penalty or interest which may be due or
17 become due under this Act, the Service Occupation Tax Act,
18 the Retailers' Occupation Tax Act, the Use Tax Act, any local
19 occupation or use tax administered by the Department the
20 Municipal Retailers' Occupation Tax Act, the Municipal Use
21 Tax Act, the Municipal Service Occupation Tax Act, the County
22 Retailers' Occupation Tax Act, the County Supplementary
23 Retailers' Occupation Tax Act, the County Service Occupation
24 Tax Act, the County Supplementary Service Occupation Tax Act,
25 the County Use Tax Act, the County Supplementary Use Tax Act,
26 Section 4 of the Water Commission Act of 1985, subsections
27 (b), (c) and (d) of Section 5.01 of the Local Mass Transit
28 District Act, or subsections (e), (f) and (g) of Section 4.03
29 of the Regional Transportation Authority Act, from the
30 assignee.
31 In any case which there has been an erroneous refund of
32 tax payable under this Act, a notice of tax liability may be
33 issued at any time within 3 years from the making of that
34 refund, or within 5 years from the making of that refund if
HB4431 Engrossed -103- LRB9110442SMdvB
1 it appears that any part of the refund was induced by fraud
2 or the misrepresentation of a material fact. The amount of
3 any proposed assessment set forth in the notice shall be
4 limited to the amount of the erroneous refund.
5 (Source: P.A. 87-876.)
6 Section 20. The Service Occupation Tax Act is amended by
7 changing Section 20 as follows:
8 (35 ILCS 115/20) (from Ch. 120, par. 439.120)
9 Sec. 20. If it is determined that the Department should
10 issue a credit or refund hereunder, the Department may first
11 apply the amount thereof against any amount of tax or penalty
12 or interest due hereunder, or under the Service Use Tax Act,
13 the Retailers' Occupation Tax Act, the Use Tax Act, any local
14 occupation or use tax administered by the Department the
15 Municipal Retailers' Occupation Tax Act, the Municipal Use
16 Tax Act, the Municipal Service Occupation Tax Act, the County
17 Retailers' Occupation Tax Act, the County Supplementary
18 Retailers' Occupation Tax Act, the County Service Occupation
19 Tax Act, the County Supplementary Service Occupation Tax Act,
20 the County Use Tax Act, the County Supplementary Use Tax Act,
21 Section 4 of the Water Commission Act of 1985, subsections
22 (b), (c) and (d) of Section 5.01 of the Local Mass Transit
23 District Act, or subsections (e), (f) and (g) of Section 4.03
24 of the Regional Transportation Authority Act, from the person
25 entitled to such credit or refund. For this purpose, if
26 proceedings are pending to determine whether or not any tax
27 or penalty or interest is due hereunder, or under the Service
28 Use Tax Act, the Retailers' Occupation Tax Act, the Use Tax
29 Act, any local occupation or use tax administered by the
30 Department the Municipal Retailers' Occupation Tax Act, the
31 Municipal Use Tax Act, the Municipal Service Occupation Tax
32 Act, the County Retailers' Occupation Tax Act, the County
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1 Supplementary Retailers' Occupation Tax Act, the County
2 Service Occupation Tax Act, the County Supplementary Service
3 Occupation Tax Act, the County Use Tax Act, the County
4 Supplementary Use Tax Act, Section 4 of the Water Commission
5 Act of 1985, subsections (b), (c) and (d) of Section 5.01 of
6 the Local Mass Transit District Act, or subsections (e), (f)
7 and (g) of Section 4.03 of the Regional Transportation
8 Authority Act, from such person, the Department may withhold
9 issuance of the credit or refund pending the final
10 disposition of such proceedings and may apply such credit or
11 refund against any amount found to be due to the Department
12 as a result of such proceedings. The balance, if any, of the
13 credit or refund shall be issued to the person entitled
14 thereto.
15 Any credit memorandum issued hereunder may be used by the
16 authorized holder thereof to pay any tax or penalty or
17 interest due or to become due under this Act, or under the
18 Service Use Tax Act, the Retailers' Occupation Tax Act, the
19 Use Tax Act, any local occupation or use tax administered by
20 the Department the Municipal Retailers' Occupation Tax Act,
21 the Municipal Use Tax Act, the Municipal Service Occupation
22 Tax Act, the County Retailers' Occupation Tax Act, the County
23 Supplementary Retailers' Occupation Tax Act, the County
24 Service Occupation Tax Act, the County Supplementary Service
25 Occupation Tax Act, the County Use Tax Act, the County
26 Supplementary Use Tax Act, Section 4 of the Water Commission
27 Act of 1985, subsections (b), (c) and (d) of Section 5.01 of
28 the Local Mass Transit District Act, or subsections (e), (f)
29 and (g) of Section 4.03 of the Regional Transportation
30 Authority Act, from such holder. Subject to reasonable rules
31 of the Department, a credit memorandum issued hereunder may
32 be assigned by the holder thereof to any other person for use
33 in paying tax or penalty or interest which may be due or
34 become due under this Act, the Service Use Tax Act, the
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1 Retailers' Occupation Tax Act, the Use Tax Act, any local
2 occupation or use tax administered by the Department the
3 Municipal Retailers' Occupation Tax Act, the Municipal Use
4 Tax Act, the Municipal Service Occupation Tax Act, the County
5 Retailers' Occupation Tax Act, the County Supplementary
6 Retailers' Occupation Tax Act, the County Service Occupation
7 Tax Act, the County Supplementary Service Occupation Tax Act,
8 the County Use Tax Act, the County Supplementary Use Tax Act,
9 Section 4 of the Water Commission Act of 1985, subsections
10 (b), (c) and (d) of Section 5.01 of the Local Mass Transit
11 District Act, or subsections (e), (f) and (g) of Section 4.03
12 of the Regional Transportation Authority Act, from the
13 assignee.
14 In any case in which there has been an erroneous refund
15 of tax payable under this Act, a notice of tax liability may
16 be issued at any time within 3 years from the making of that
17 refund, or within 5 years from the making of that refund if
18 it appears that any part of the refund was induced by fraud
19 or the misrepresentation of a material fact. The amount of
20 any proposed assessment set forth in the notice shall be
21 limited to the amount of the erroneous refund.
22 (Source: P.A. 87-876.)
23 Section 25. The Retailers' Occupation Tax Act is amended
24 by changing Sections 3 and 6 as follows:
25 (35 ILCS 120/3) (from Ch. 120, par. 442)
26 Sec. 3. Except as provided in this Section, on or before
27 the twentieth day of each calendar month, every person
28 engaged in the business of selling tangible personal property
29 at retail in this State during the preceding calendar month
30 shall file a return with the Department, stating:
31 1. The name of the seller;
32 2. His residence address and the address of his
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1 principal place of business and the address of the
2 principal place of business (if that is a different
3 address) from which he engages in the business of selling
4 tangible personal property at retail in this State;
5 3. Total amount of receipts received by him during
6 the preceding calendar month or quarter, as the case may
7 be, from sales of tangible personal property, and from
8 services furnished, by him during such preceding calendar
9 month or quarter;
10 4. Total amount received by him during the
11 preceding calendar month or quarter on charge and time
12 sales of tangible personal property, and from services
13 furnished, by him prior to the month or quarter for which
14 the return is filed;
15 5. Deductions allowed by law;
16 6. Gross receipts which were received by him during
17 the preceding calendar month or quarter and upon the
18 basis of which the tax is imposed;
19 7. The amount of credit provided in Section 2d of
20 this Act;
21 8. The amount of tax due;
22 9. The signature of the taxpayer; and
23 10. Such other reasonable information as the
24 Department may require.
25 If a taxpayer fails to sign a return within 30 days after
26 the proper notice and demand for signature by the Department,
27 the return shall be considered valid and any amount shown to
28 be due on the return shall be deemed assessed.
29 Each return shall be accompanied by the statement of
30 prepaid tax issued pursuant to Section 2e for which credit is
31 claimed.
32 A retailer may accept a Manufacturer's Purchase Credit
33 certification from a purchaser in satisfaction of Use Tax as
34 provided in Section 3-85 of the Use Tax Act if the purchaser
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1 provides the appropriate documentation as required by Section
2 3-85 of the Use Tax Act. A Manufacturer's Purchase Credit
3 certification, accepted by a retailer as provided in Section
4 3-85 of the Use Tax Act, may be used by that retailer to
5 satisfy Retailers' Occupation Tax liability in the amount
6 claimed in the certification, not to exceed 6.25% of the
7 receipts subject to tax from a qualifying purchase.
8 The Department may require returns to be filed on a
9 quarterly basis. If so required, a return for each calendar
10 quarter shall be filed on or before the twentieth day of the
11 calendar month following the end of such calendar quarter.
12 The taxpayer shall also file a return with the Department for
13 each of the first two months of each calendar quarter, on or
14 before the twentieth day of the following calendar month,
15 stating:
16 1. The name of the seller;
17 2. The address of the principal place of business
18 from which he engages in the business of selling tangible
19 personal property at retail in this State;
20 3. The total amount of taxable receipts received by
21 him during the preceding calendar month from sales of
22 tangible personal property by him during such preceding
23 calendar month, including receipts from charge and time
24 sales, but less all deductions allowed by law;
25 4. The amount of credit provided in Section 2d of
26 this Act;
27 5. The amount of tax due; and
28 6. Such other reasonable information as the
29 Department may require.
30 If a total amount of less than $1 is payable, refundable
31 or creditable, such amount shall be disregarded if it is less
32 than 50 cents and shall be increased to $1 if it is 50 cents
33 or more.
34 Beginning October 1, 1993, a taxpayer who has an average
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1 monthly tax liability of $150,000 or more shall make all
2 payments required by rules of the Department by electronic
3 funds transfer. Beginning October 1, 1994, a taxpayer who
4 has an average monthly tax liability of $100,000 or more
5 shall make all payments required by rules of the Department
6 by electronic funds transfer. Beginning October 1, 1995, a
7 taxpayer who has an average monthly tax liability of $50,000
8 or more shall make all payments required by rules of the
9 Department by electronic funds transfer. Beginning October
10 1, 2000, a taxpayer who has an annual tax liability of
11 $200,000 or more shall make all payments required by rules of
12 the Department by electronic funds transfer. The term
13 "annual tax liability" shall be the sum of the taxpayer's
14 liabilities under this Act, and under all other State and
15 local occupation and use tax laws administered by the
16 Department, for the immediately preceding calendar year. The
17 term "average monthly tax liability" shall be the sum of the
18 taxpayer's liabilities under this Act, and under all other
19 State and local occupation and use tax laws administered by
20 the Department, for the immediately preceding calendar year
21 divided by 12.
22 Before August 1 of each year beginning in 1993, the
23 Department shall notify all taxpayers required to make
24 payments by electronic funds transfer. All taxpayers
25 required to make payments by electronic funds transfer shall
26 make those payments for a minimum of one year beginning on
27 October 1.
28 Any taxpayer not required to make payments by electronic
29 funds transfer may make payments by electronic funds transfer
30 with the permission of the Department.
31 All taxpayers required to make payment by electronic
32 funds transfer and any taxpayers authorized to voluntarily
33 make payments by electronic funds transfer shall make those
34 payments in the manner authorized by the Department.
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1 The Department shall adopt such rules as are necessary to
2 effectuate a program of electronic funds transfer and the
3 requirements of this Section.
4 Any amount which is required to be shown or reported on
5 any return or other document under this Act shall, if such
6 amount is not a whole-dollar amount, be increased to the
7 nearest whole-dollar amount in any case where the fractional
8 part of a dollar is 50 cents or more, and decreased to the
9 nearest whole-dollar amount where the fractional part of a
10 dollar is less than 50 cents.
11 If the retailer is otherwise required to file a monthly
12 return and if the retailer's average monthly tax liability to
13 the Department does not exceed $200, the Department may
14 authorize his returns to be filed on a quarter annual basis,
15 with the return for January, February and March of a given
16 year being due by April 20 of such year; with the return for
17 April, May and June of a given year being due by July 20 of
18 such year; with the return for July, August and September of
19 a given year being due by October 20 of such year, and with
20 the return for October, November and December of a given year
21 being due by January 20 of the following year.
22 If the retailer is otherwise required to file a monthly
23 or quarterly return and if the retailer's average monthly tax
24 liability with the Department does not exceed $50, the
25 Department may authorize his returns to be filed on an annual
26 basis, with the return for a given year being due by January
27 20 of the following year.
28 Such quarter annual and annual returns, as to form and
29 substance, shall be subject to the same requirements as
30 monthly returns.
31 Notwithstanding any other provision in this Act
32 concerning the time within which a retailer may file his
33 return, in the case of any retailer who ceases to engage in a
34 kind of business which makes him responsible for filing
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1 returns under this Act, such retailer shall file a final
2 return under this Act with the Department not more than one
3 month after discontinuing such business.
4 Where the same person has more than one business
5 registered with the Department under separate registrations
6 under this Act, such person may not file each return that is
7 due as a single return covering all such registered
8 businesses, but shall file separate returns for each such
9 registered business.
10 In addition, with respect to motor vehicles, watercraft,
11 aircraft, and trailers that are required to be registered
12 with an agency of this State, every retailer selling this
13 kind of tangible personal property shall file, with the
14 Department, upon a form to be prescribed and supplied by the
15 Department, a separate return for each such item of tangible
16 personal property which the retailer sells, except that if
17 where, in the same transaction, (i) a retailer of aircraft,
18 watercraft, motor vehicles or trailers transfers more than
19 one aircraft, watercraft, motor vehicle or trailer to another
20 aircraft, watercraft, motor vehicle retailer or trailer
21 retailer for the purpose of resale or (ii) a retailer of
22 aircraft, watercraft, motor vehicles, or trailers transfers
23 more than one aircraft, watercraft, motor vehicle, or trailer
24 to a purchaser for use as a qualifying rolling stock as
25 provided in Section 2-5 of this Act, then that seller for
26 resale may report the transfer of all aircraft, watercraft,
27 motor vehicles or trailers involved in that transaction to
28 the Department on the same uniform invoice-transaction
29 reporting return form. For purposes of this Section,
30 "watercraft" means a Class 2, Class 3, or Class 4 watercraft
31 as defined in Section 3-2 of the Boat Registration and Safety
32 Act, a personal watercraft, or any boat equipped with an
33 inboard motor.
34 Any retailer who sells only motor vehicles, watercraft,
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1 aircraft, or trailers that are required to be registered with
2 an agency of this State, so that all retailers' occupation
3 tax liability is required to be reported, and is reported, on
4 such transaction reporting returns and who is not otherwise
5 required to file monthly or quarterly returns, need not file
6 monthly or quarterly returns. However, those retailers shall
7 be required to file returns on an annual basis.
8 The transaction reporting return, in the case of motor
9 vehicles or trailers that are required to be registered with
10 an agency of this State, shall be the same document as the
11 Uniform Invoice referred to in Section 5-402 of The Illinois
12 Vehicle Code and must show the name and address of the
13 seller; the name and address of the purchaser; the amount of
14 the selling price including the amount allowed by the
15 retailer for traded-in property, if any; the amount allowed
16 by the retailer for the traded-in tangible personal property,
17 if any, to the extent to which Section 1 of this Act allows
18 an exemption for the value of traded-in property; the balance
19 payable after deducting such trade-in allowance from the
20 total selling price; the amount of tax due from the retailer
21 with respect to such transaction; the amount of tax collected
22 from the purchaser by the retailer on such transaction (or
23 satisfactory evidence that such tax is not due in that
24 particular instance, if that is claimed to be the fact); the
25 place and date of the sale; a sufficient identification of
26 the property sold; such other information as is required in
27 Section 5-402 of The Illinois Vehicle Code, and such other
28 information as the Department may reasonably require.
29 The transaction reporting return in the case of
30 watercraft or aircraft must show the name and address of the
31 seller; the name and address of the purchaser; the amount of
32 the selling price including the amount allowed by the
33 retailer for traded-in property, if any; the amount allowed
34 by the retailer for the traded-in tangible personal property,
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1 if any, to the extent to which Section 1 of this Act allows
2 an exemption for the value of traded-in property; the balance
3 payable after deducting such trade-in allowance from the
4 total selling price; the amount of tax due from the retailer
5 with respect to such transaction; the amount of tax collected
6 from the purchaser by the retailer on such transaction (or
7 satisfactory evidence that such tax is not due in that
8 particular instance, if that is claimed to be the fact); the
9 place and date of the sale, a sufficient identification of
10 the property sold, and such other information as the
11 Department may reasonably require.
12 Such transaction reporting return shall be filed not
13 later than 20 days after the day of delivery of the item that
14 is being sold, but may be filed by the retailer at any time
15 sooner than that if he chooses to do so. The transaction
16 reporting return and tax remittance or proof of exemption
17 from the Illinois use tax may be transmitted to the
18 Department by way of the State agency with which, or State
19 officer with whom the tangible personal property must be
20 titled or registered (if titling or registration is required)
21 if the Department and such agency or State officer determine
22 that this procedure will expedite the processing of
23 applications for title or registration.
24 With each such transaction reporting return, the retailer
25 shall remit the proper amount of tax due (or shall submit
26 satisfactory evidence that the sale is not taxable if that is
27 the case), to the Department or its agents, whereupon the
28 Department shall issue, in the purchaser's name, a use tax
29 receipt (or a certificate of exemption if the Department is
30 satisfied that the particular sale is tax exempt) which such
31 purchaser may submit to the agency with which, or State
32 officer with whom, he must title or register the tangible
33 personal property that is involved (if titling or
34 registration is required) in support of such purchaser's
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1 application for an Illinois certificate or other evidence of
2 title or registration to such tangible personal property.
3 No retailer's failure or refusal to remit tax under this
4 Act precludes a user, who has paid the proper tax to the
5 retailer, from obtaining his certificate of title or other
6 evidence of title or registration (if titling or registration
7 is required) upon satisfying the Department that such user
8 has paid the proper tax (if tax is due) to the retailer. The
9 Department shall adopt appropriate rules to carry out the
10 mandate of this paragraph.
11 If the user who would otherwise pay tax to the retailer
12 wants the transaction reporting return filed and the payment
13 of the tax or proof of exemption made to the Department
14 before the retailer is willing to take these actions and such
15 user has not paid the tax to the retailer, such user may
16 certify to the fact of such delay by the retailer and may
17 (upon the Department being satisfied of the truth of such
18 certification) transmit the information required by the
19 transaction reporting return and the remittance for tax or
20 proof of exemption directly to the Department and obtain his
21 tax receipt or exemption determination, in which event the
22 transaction reporting return and tax remittance (if a tax
23 payment was required) shall be credited by the Department to
24 the proper retailer's account with the Department, but
25 without the 2.1% or 1.75% discount provided for in this
26 Section being allowed. When the user pays the tax directly
27 to the Department, he shall pay the tax in the same amount
28 and in the same form in which it would be remitted if the tax
29 had been remitted to the Department by the retailer.
30 Refunds made by the seller during the preceding return
31 period to purchasers, on account of tangible personal
32 property returned to the seller, shall be allowed as a
33 deduction under subdivision 5 of his monthly or quarterly
34 return, as the case may be, in case the seller had
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1 theretofore included the receipts from the sale of such
2 tangible personal property in a return filed by him and had
3 paid the tax imposed by this Act with respect to such
4 receipts.
5 Where the seller is a corporation, the return filed on
6 behalf of such corporation shall be signed by the president,
7 vice-president, secretary or treasurer or by the properly
8 accredited agent of such corporation.
9 Where the seller is a limited liability company, the
10 return filed on behalf of the limited liability company shall
11 be signed by a manager, member, or properly accredited agent
12 of the limited liability company.
13 Except as provided in this Section, the retailer filing
14 the return under this Section shall, at the time of filing
15 such return, pay to the Department the amount of tax imposed
16 by this Act less a discount of 2.1% prior to January 1, 1990
17 and 1.75% on and after January 1, 1990, or $5 per calendar
18 year, whichever is greater, which is allowed to reimburse the
19 retailer for the expenses incurred in keeping records,
20 preparing and filing returns, remitting the tax and supplying
21 data to the Department on request. Any prepayment made
22 pursuant to Section 2d of this Act shall be included in the
23 amount on which such 2.1% or 1.75% discount is computed. In
24 the case of retailers who report and pay the tax on a
25 transaction by transaction basis, as provided in this
26 Section, such discount shall be taken with each such tax
27 remittance instead of when such retailer files his periodic
28 return.
29 Before October 1, 2000, if the taxpayer's average monthly
30 tax liability to the Department under this Act, the Use Tax
31 Act, the Service Occupation Tax Act, and the Service Use Tax
32 Act, excluding any liability for prepaid sales tax to be
33 remitted in accordance with Section 2d of this Act, was
34 $10,000 or more during the preceding 4 complete calendar
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1 quarters, he shall file a return with the Department each
2 month by the 20th day of the month next following the month
3 during which such tax liability is incurred and shall make
4 payments to the Department on or before the 7th, 15th, 22nd
5 and last day of the month during which such liability is
6 incurred. On and after October 1, 2000, if the taxpayer's
7 average monthly tax liability to the Department under this
8 Act, the Use Tax Act, the Service Occupation Tax Act, and the
9 Service Use Tax Act, excluding any liability for prepaid
10 sales tax to be remitted in accordance with Section 2d of
11 this Act, was $20,000 or more during the preceding 4 complete
12 calendar quarters, he shall file a return with the Department
13 each month by the 20th day of the month next following the
14 month during which such tax liability is incurred and shall
15 make payment to the Department on or before the 7th, 15th,
16 22nd and last day of the month during which such liability is
17 incurred. If the month during which such tax liability is
18 incurred began prior to January 1, 1985, each payment shall
19 be in an amount equal to 1/4 of the taxpayer's actual
20 liability for the month or an amount set by the Department
21 not to exceed 1/4 of the average monthly liability of the
22 taxpayer to the Department for the preceding 4 complete
23 calendar quarters (excluding the month of highest liability
24 and the month of lowest liability in such 4 quarter period).
25 If the month during which such tax liability is incurred
26 begins on or after January 1, 1985 and prior to January 1,
27 1987, each payment shall be in an amount equal to 22.5% of
28 the taxpayer's actual liability for the month or 27.5% of the
29 taxpayer's liability for the same calendar month of the
30 preceding year. If the month during which such tax liability
31 is incurred begins on or after January 1, 1987 and prior to
32 January 1, 1988, each payment shall be in an amount equal to
33 22.5% of the taxpayer's actual liability for the month or
34 26.25% of the taxpayer's liability for the same calendar
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1 month of the preceding year. If the month during which such
2 tax liability is incurred begins on or after January 1, 1988,
3 and prior to January 1, 1989, or begins on or after January
4 1, 1996, each payment shall be in an amount equal to 22.5% of
5 the taxpayer's actual liability for the month or 25% of the
6 taxpayer's liability for the same calendar month of the
7 preceding year. If the month during which such tax liability
8 is incurred begins on or after January 1, 1989, and prior to
9 January 1, 1996, each payment shall be in an amount equal to
10 22.5% of the taxpayer's actual liability for the month or 25%
11 of the taxpayer's liability for the same calendar month of
12 the preceding year or 100% of the taxpayer's actual liability
13 for the quarter monthly reporting period. The amount of such
14 quarter monthly payments shall be credited against the final
15 tax liability of the taxpayer's return for that month.
16 Before October 1, 2000, once applicable, the requirement of
17 the making of quarter monthly payments to the Department by
18 taxpayers having an average monthly tax liability of $10,000
19 or more as determined in the manner provided above shall
20 continue until such taxpayer's average monthly liability to
21 the Department during the preceding 4 complete calendar
22 quarters (excluding the month of highest liability and the
23 month of lowest liability) is less than $9,000, or until such
24 taxpayer's average monthly liability to the Department as
25 computed for each calendar quarter of the 4 preceding
26 complete calendar quarter period is less than $10,000.
27 However, if a taxpayer can show the Department that a
28 substantial change in the taxpayer's business has occurred
29 which causes the taxpayer to anticipate that his average
30 monthly tax liability for the reasonably foreseeable future
31 will fall below the $10,000 threshold stated above, then such
32 taxpayer may petition the Department for a change in such
33 taxpayer's reporting status. On and after October 1, 2000,
34 once applicable, the requirement of the making of quarter
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1 monthly payments to the Department by taxpayers having an
2 average monthly tax liability of $20,000 or more as
3 determined in the manner provided above shall continue until
4 such taxpayer's average monthly liability to the Department
5 during the preceding 4 complete calendar quarters (excluding
6 the month of highest liability and the month of lowest
7 liability) is less than $19,000 or until such taxpayer's
8 average monthly liability to the Department as computed for
9 each calendar quarter of the 4 preceding complete calendar
10 quarter period is less than $20,000. However, if a taxpayer
11 can show the Department that a substantial change in the
12 taxpayer's business has occurred which causes the taxpayer to
13 anticipate that his average monthly tax liability for the
14 reasonably foreseeable future will fall below the $20,000
15 threshold stated above, then such taxpayer may petition the
16 Department for a change in such taxpayer's reporting status.
17 The Department shall change such taxpayer's reporting status
18 unless it finds that such change is seasonal in nature and
19 not likely to be long term. If any such quarter monthly
20 payment is not paid at the time or in the amount required by
21 this Section, then the taxpayer shall be liable for penalties
22 and interest on the difference between the minimum amount due
23 as a payment and the amount of such quarter monthly payment
24 actually and timely paid, except insofar as the taxpayer has
25 previously made payments for that month to the Department in
26 excess of the minimum payments previously due as provided in
27 this Section. The Department shall make reasonable rules and
28 regulations to govern the quarter monthly payment amount and
29 quarter monthly payment dates for taxpayers who file on other
30 than a calendar monthly basis.
31 Without regard to whether a taxpayer is required to make
32 quarter monthly payments as specified above, any taxpayer who
33 is required by Section 2d of this Act to collect and remit
34 prepaid taxes and has collected prepaid taxes which average
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1 in excess of $25,000 per month during the preceding 2
2 complete calendar quarters, shall file a return with the
3 Department as required by Section 2f and shall make payments
4 to the Department on or before the 7th, 15th, 22nd and last
5 day of the month during which such liability is incurred. If
6 the month during which such tax liability is incurred began
7 prior to the effective date of this amendatory Act of 1985,
8 each payment shall be in an amount not less than 22.5% of the
9 taxpayer's actual liability under Section 2d. If the month
10 during which such tax liability is incurred begins on or
11 after January 1, 1986, each payment shall be in an amount
12 equal to 22.5% of the taxpayer's actual liability for the
13 month or 27.5% of the taxpayer's liability for the same
14 calendar month of the preceding calendar year. If the month
15 during which such tax liability is incurred begins on or
16 after January 1, 1987, each payment shall be in an amount
17 equal to 22.5% of the taxpayer's actual liability for the
18 month or 26.25% of the taxpayer's liability for the same
19 calendar month of the preceding year. The amount of such
20 quarter monthly payments shall be credited against the final
21 tax liability of the taxpayer's return for that month filed
22 under this Section or Section 2f, as the case may be. Once
23 applicable, the requirement of the making of quarter monthly
24 payments to the Department pursuant to this paragraph shall
25 continue until such taxpayer's average monthly prepaid tax
26 collections during the preceding 2 complete calendar quarters
27 is $25,000 or less. If any such quarter monthly payment is
28 not paid at the time or in the amount required, the taxpayer
29 shall be liable for penalties and interest on such
30 difference, except insofar as the taxpayer has previously
31 made payments for that month in excess of the minimum
32 payments previously due.
33 If any payment provided for in this Section exceeds the
34 taxpayer's liabilities under this Act, the Use Tax Act, the
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1 Service Occupation Tax Act and the Service Use Tax Act, as
2 shown on an original monthly return, the Department shall, if
3 requested by the taxpayer, issue to the taxpayer a credit
4 memorandum no later than 30 days after the date of payment.
5 The credit evidenced by such credit memorandum may be
6 assigned by the taxpayer to a similar taxpayer under this
7 Act, the Use Tax Act, the Service Occupation Tax Act or the
8 Service Use Tax Act, in accordance with reasonable rules and
9 regulations to be prescribed by the Department. If no such
10 request is made, the taxpayer may credit such excess payment
11 against tax liability subsequently to be remitted to the
12 Department under this Act, the Use Tax Act, the Service
13 Occupation Tax Act or the Service Use Tax Act, in accordance
14 with reasonable rules and regulations prescribed by the
15 Department. If the Department subsequently determined that
16 all or any part of the credit taken was not actually due to
17 the taxpayer, the taxpayer's 2.1% and 1.75% vendor's discount
18 shall be reduced by 2.1% or 1.75% of the difference between
19 the credit taken and that actually due, and that taxpayer
20 shall be liable for penalties and interest on such
21 difference.
22 If a retailer of motor fuel is entitled to a credit under
23 Section 2d of this Act which exceeds the taxpayer's liability
24 to the Department under this Act for the month which the
25 taxpayer is filing a return, the Department shall issue the
26 taxpayer a credit memorandum for the excess.
27 Beginning January 1, 1990, each month the Department
28 shall pay into the Local Government Tax Fund, a special fund
29 in the State treasury which is hereby created, the net
30 revenue realized for the preceding month from the 1% tax on
31 sales of food for human consumption which is to be consumed
32 off the premises where it is sold (other than alcoholic
33 beverages, soft drinks and food which has been prepared for
34 immediate consumption) and prescription and nonprescription
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1 medicines, drugs, medical appliances and insulin, urine
2 testing materials, syringes and needles used by diabetics.
3 Beginning January 1, 1990, each month the Department
4 shall pay into the County and Mass Transit District Fund, a
5 special fund in the State treasury which is hereby created,
6 4% of the net revenue realized for the preceding month from
7 the 6.25% general rate.
8 Beginning January 1, 1990, each month the Department
9 shall pay into the Local Government Tax Fund 16% of the net
10 revenue realized for the preceding month from the 6.25%
11 general rate on the selling price of tangible personal
12 property.
13 Of the remainder of the moneys received by the Department
14 pursuant to this Act, (a) 1.75% thereof shall be paid into
15 the Build Illinois Fund and (b) prior to July 1, 1989, 2.2%
16 and on and after July 1, 1989, 3.8% thereof shall be paid
17 into the Build Illinois Fund; provided, however, that if in
18 any fiscal year the sum of (1) the aggregate of 2.2% or 3.8%,
19 as the case may be, of the moneys received by the Department
20 and required to be paid into the Build Illinois Fund pursuant
21 to this Act, Section 9 of the Use Tax Act, Section 9 of the
22 Service Use Tax Act, and Section 9 of the Service Occupation
23 Tax Act, such Acts being hereinafter called the "Tax Acts"
24 and such aggregate of 2.2% or 3.8%, as the case may be, of
25 moneys being hereinafter called the "Tax Act Amount", and (2)
26 the amount transferred to the Build Illinois Fund from the
27 State and Local Sales Tax Reform Fund shall be less than the
28 Annual Specified Amount (as hereinafter defined), an amount
29 equal to the difference shall be immediately paid into the
30 Build Illinois Fund from other moneys received by the
31 Department pursuant to the Tax Acts; the "Annual Specified
32 Amount" means the amounts specified below for fiscal years
33 1986 through 1993:
34 Fiscal Year Annual Specified Amount
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1 1986 $54,800,000
2 1987 $76,650,000
3 1988 $80,480,000
4 1989 $88,510,000
5 1990 $115,330,000
6 1991 $145,470,000
7 1992 $182,730,000
8 1993 $206,520,000;
9 and means the Certified Annual Debt Service Requirement (as
10 defined in Section 13 of the Build Illinois Bond Act) or the
11 Tax Act Amount, whichever is greater, for fiscal year 1994
12 and each fiscal year thereafter; and further provided, that
13 if on the last business day of any month the sum of (1) the
14 Tax Act Amount required to be deposited into the Build
15 Illinois Bond Account in the Build Illinois Fund during such
16 month and (2) the amount transferred to the Build Illinois
17 Fund from the State and Local Sales Tax Reform Fund shall
18 have been less than 1/12 of the Annual Specified Amount, an
19 amount equal to the difference shall be immediately paid into
20 the Build Illinois Fund from other moneys received by the
21 Department pursuant to the Tax Acts; and, further provided,
22 that in no event shall the payments required under the
23 preceding proviso result in aggregate payments into the Build
24 Illinois Fund pursuant to this clause (b) for any fiscal year
25 in excess of the greater of (i) the Tax Act Amount or (ii)
26 the Annual Specified Amount for such fiscal year. The
27 amounts payable into the Build Illinois Fund under clause (b)
28 of the first sentence in this paragraph shall be payable only
29 until such time as the aggregate amount on deposit under each
30 trust indenture securing Bonds issued and outstanding
31 pursuant to the Build Illinois Bond Act is sufficient, taking
32 into account any future investment income, to fully provide,
33 in accordance with such indenture, for the defeasance of or
34 the payment of the principal of, premium, if any, and
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1 interest on the Bonds secured by such indenture and on any
2 Bonds expected to be issued thereafter and all fees and costs
3 payable with respect thereto, all as certified by the
4 Director of the Bureau of the Budget. If on the last
5 business day of any month in which Bonds are outstanding
6 pursuant to the Build Illinois Bond Act, the aggregate of
7 moneys deposited in the Build Illinois Bond Account in the
8 Build Illinois Fund in such month shall be less than the
9 amount required to be transferred in such month from the
10 Build Illinois Bond Account to the Build Illinois Bond
11 Retirement and Interest Fund pursuant to Section 13 of the
12 Build Illinois Bond Act, an amount equal to such deficiency
13 shall be immediately paid from other moneys received by the
14 Department pursuant to the Tax Acts to the Build Illinois
15 Fund; provided, however, that any amounts paid to the Build
16 Illinois Fund in any fiscal year pursuant to this sentence
17 shall be deemed to constitute payments pursuant to clause (b)
18 of the first sentence of this paragraph and shall reduce the
19 amount otherwise payable for such fiscal year pursuant to
20 that clause (b). The moneys received by the Department
21 pursuant to this Act and required to be deposited into the
22 Build Illinois Fund are subject to the pledge, claim and
23 charge set forth in Section 12 of the Build Illinois Bond
24 Act.
25 Subject to payment of amounts into the Build Illinois
26 Fund as provided in the preceding paragraph or in any
27 amendment thereto hereafter enacted, the following specified
28 monthly installment of the amount requested in the
29 certificate of the Chairman of the Metropolitan Pier and
30 Exposition Authority provided under Section 8.25f of the
31 State Finance Act, but not in excess of sums designated as
32 "Total Deposit", shall be deposited in the aggregate from
33 collections under Section 9 of the Use Tax Act, Section 9 of
34 the Service Use Tax Act, Section 9 of the Service Occupation
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1 Tax Act, and Section 3 of the Retailers' Occupation Tax Act
2 into the McCormick Place Expansion Project Fund in the
3 specified fiscal years.
4 Fiscal Year Total Deposit
5 1993 $0
6 1994 53,000,000
7 1995 58,000,000
8 1996 61,000,000
9 1997 64,000,000
10 1998 68,000,000
11 1999 71,000,000
12 2000 75,000,000
13 2001 80,000,000
14 2002 84,000,000
15 2003 89,000,000
16 2004 93,000,000
17 2005 97,000,000
18 2006 102,000,000
19 2007 108,000,000
20 2008 115,000,000
21 2009 120,000,000
22 2010 126,000,000
23 2011 132,000,000
24 2012 138,000,000
25 2013 and 145,000,000
26 each fiscal year
27 thereafter that bonds
28 are outstanding under
29 Section 13.2 of the
30 Metropolitan Pier and
31 Exposition Authority
32 Act, but not after fiscal year 2029.
33 Beginning July 20, 1993 and in each month of each fiscal
34 year thereafter, one-eighth of the amount requested in the
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1 certificate of the Chairman of the Metropolitan Pier and
2 Exposition Authority for that fiscal year, less the amount
3 deposited into the McCormick Place Expansion Project Fund by
4 the State Treasurer in the respective month under subsection
5 (g) of Section 13 of the Metropolitan Pier and Exposition
6 Authority Act, plus cumulative deficiencies in the deposits
7 required under this Section for previous months and years,
8 shall be deposited into the McCormick Place Expansion Project
9 Fund, until the full amount requested for the fiscal year,
10 but not in excess of the amount specified above as "Total
11 Deposit", has been deposited.
12 Subject to payment of amounts into the Build Illinois
13 Fund and the McCormick Place Expansion Project Fund pursuant
14 to the preceding paragraphs or in any amendment thereto
15 hereafter enacted, each month the Department shall pay into
16 the Local Government Distributive Fund 0.4% of the net
17 revenue realized for the preceding month from the 5% general
18 rate or 0.4% of 80% of the net revenue realized for the
19 preceding month from the 6.25% general rate, as the case may
20 be, on the selling price of tangible personal property which
21 amount shall, subject to appropriation, be distributed as
22 provided in Section 2 of the State Revenue Sharing Act. No
23 payments or distributions pursuant to this paragraph shall be
24 made if the tax imposed by this Act on photoprocessing
25 products is declared unconstitutional, or if the proceeds
26 from such tax are unavailable for distribution because of
27 litigation.
28 Subject to payment of amounts into the Build Illinois
29 Fund, the McCormick Place Expansion Project to the preceding
30 paragraphs or in any amendments thereto hereafter enacted,
31 beginning July 1, 1993, the Department shall each month pay
32 into the Illinois Tax Increment Fund 0.27% of 80% of the net
33 revenue realized for the preceding month from the 6.25%
34 general rate on the selling price of tangible personal
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1 property.
2 Of the remainder of the moneys received by the Department
3 pursuant to this Act, 75% thereof shall be paid into the
4 State Treasury and 25% shall be reserved in a special account
5 and used only for the transfer to the Common School Fund as
6 part of the monthly transfer from the General Revenue Fund in
7 accordance with Section 8a of the State Finance Act.
8 The Department may, upon separate written notice to a
9 taxpayer, require the taxpayer to prepare and file with the
10 Department on a form prescribed by the Department within not
11 less than 60 days after receipt of the notice an annual
12 information return for the tax year specified in the notice.
13 Such annual return to the Department shall include a
14 statement of gross receipts as shown by the retailer's last
15 Federal income tax return. If the total receipts of the
16 business as reported in the Federal income tax return do not
17 agree with the gross receipts reported to the Department of
18 Revenue for the same period, the retailer shall attach to his
19 annual return a schedule showing a reconciliation of the 2
20 amounts and the reasons for the difference. The retailer's
21 annual return to the Department shall also disclose the cost
22 of goods sold by the retailer during the year covered by such
23 return, opening and closing inventories of such goods for
24 such year, costs of goods used from stock or taken from stock
25 and given away by the retailer during such year, payroll
26 information of the retailer's business during such year and
27 any additional reasonable information which the Department
28 deems would be helpful in determining the accuracy of the
29 monthly, quarterly or annual returns filed by such retailer
30 as provided for in this Section.
31 If the annual information return required by this Section
32 is not filed when and as required, the taxpayer shall be
33 liable as follows:
34 (i) Until January 1, 1994, the taxpayer shall be
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1 liable for a penalty equal to 1/6 of 1% of the tax due
2 from such taxpayer under this Act during the period to be
3 covered by the annual return for each month or fraction
4 of a month until such return is filed as required, the
5 penalty to be assessed and collected in the same manner
6 as any other penalty provided for in this Act.
7 (ii) On and after January 1, 1994, the taxpayer
8 shall be liable for a penalty as described in Section 3-4
9 of the Uniform Penalty and Interest Act.
10 The chief executive officer, proprietor, owner or highest
11 ranking manager shall sign the annual return to certify the
12 accuracy of the information contained therein. Any person
13 who willfully signs the annual return containing false or
14 inaccurate information shall be guilty of perjury and
15 punished accordingly. The annual return form prescribed by
16 the Department shall include a warning that the person
17 signing the return may be liable for perjury.
18 The provisions of this Section concerning the filing of
19 an annual information return do not apply to a retailer who
20 is not required to file an income tax return with the United
21 States Government.
22 As soon as possible after the first day of each month,
23 upon certification of the Department of Revenue, the
24 Comptroller shall order transferred and the Treasurer shall
25 transfer from the General Revenue Fund to the Motor Fuel Tax
26 Fund an amount equal to 1.7% of 80% of the net revenue
27 realized under this Act for the second preceding month.
28 Beginning April 1, 2000, this transfer is no longer required
29 and shall not be made.
30 Net revenue realized for a month shall be the revenue
31 collected by the State pursuant to this Act, less the amount
32 paid out during that month as refunds to taxpayers for
33 overpayment of liability.
34 For greater simplicity of administration, manufacturers,
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1 importers and wholesalers whose products are sold at retail
2 in Illinois by numerous retailers, and who wish to do so, may
3 assume the responsibility for accounting and paying to the
4 Department all tax accruing under this Act with respect to
5 such sales, if the retailers who are affected do not make
6 written objection to the Department to this arrangement.
7 Any person who promotes, organizes, provides retail
8 selling space for concessionaires or other types of sellers
9 at the Illinois State Fair, DuQuoin State Fair, county fairs,
10 local fairs, art shows, flea markets and similar exhibitions
11 or events, including any transient merchant as defined by
12 Section 2 of the Transient Merchant Act of 1987, is required
13 to file a report with the Department providing the name of
14 the merchant's business, the name of the person or persons
15 engaged in merchant's business, the permanent address and
16 Illinois Retailers Occupation Tax Registration Number of the
17 merchant, the dates and location of the event and other
18 reasonable information that the Department may require. The
19 report must be filed not later than the 20th day of the month
20 next following the month during which the event with retail
21 sales was held. Any person who fails to file a report
22 required by this Section commits a business offense and is
23 subject to a fine not to exceed $250.
24 Any person engaged in the business of selling tangible
25 personal property at retail as a concessionaire or other type
26 of seller at the Illinois State Fair, county fairs, art
27 shows, flea markets and similar exhibitions or events, or any
28 transient merchants, as defined by Section 2 of the Transient
29 Merchant Act of 1987, may be required to make a daily report
30 of the amount of such sales to the Department and to make a
31 daily payment of the full amount of tax due. The Department
32 shall impose this requirement when it finds that there is a
33 significant risk of loss of revenue to the State at such an
34 exhibition or event. Such a finding shall be based on
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1 evidence that a substantial number of concessionaires or
2 other sellers who are not residents of Illinois will be
3 engaging in the business of selling tangible personal
4 property at retail at the exhibition or event, or other
5 evidence of a significant risk of loss of revenue to the
6 State. The Department shall notify concessionaires and other
7 sellers affected by the imposition of this requirement. In
8 the absence of notification by the Department, the
9 concessionaires and other sellers shall file their returns as
10 otherwise required in this Section.
11 (Source: P.A. 90-491, eff. 1-1-99; 90-612, eff. 7-8-98;
12 91-37, eff. 7-1-99; 91-51, eff. 6-30-99; 91-101, eff.
13 7-12-99; 91-541, eff. 8-13-99; revised 9-29-99.)
14 (35 ILCS 120/6) (from Ch. 120, par. 445)
15 Sec. 6. Credit memorandum or refund. If it appears, after
16 claim therefor filed with the Department, that an amount of
17 tax or penalty or interest has been paid which was not due
18 under this Act, whether as the result of a mistake of fact or
19 an error of law, except as hereinafter provided, then the
20 Department shall issue a credit memorandum or refund to the
21 person who made the erroneous payment or, if that person died
22 or became a person under legal disability, to his or her
23 legal representative, as such. For purposes of this Section,
24 the tax is deemed to be erroneously paid by a retailer when
25 the manufacturer of a motor vehicle sold by the retailer
26 accepts the return of that automobile and refunds to the
27 purchaser the selling price of that vehicle as provided in
28 the New Vehicle Buyer Protection Act. When a motor vehicle is
29 returned for a refund of the purchase price under the New
30 Vehicle Buyer Protection Act, the Department shall issue a
31 credit memorandum or a refund for the amount of tax paid by
32 the retailer under this Act attributable to the initial sale
33 of that vehicle. Claims submitted by the retailer are subject
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1 to the same restrictions and procedures provided for in this
2 Act. If it is determined that the Department should issue a
3 credit memorandum or refund, the Department may first apply
4 the amount thereof against any tax or penalty or interest due
5 or to become due under this Act or under the Use Tax Act, the
6 Service Occupation Tax Act, the Service Use Tax Act, any
7 local occupation or use tax administered by the Department
8 the Municipal Retailers' Occupation Tax Act, the Municipal
9 Use Tax Act, the Municipal Service Occupation Tax Act, the
10 County Retailers' Occupation Tax Act, the County
11 Supplementary Retailers' Occupation Tax Act, the County
12 Service Occupation Tax Act, the County Supplementary Service
13 Occupation Tax Act, the County Use Tax Act, the County
14 Supplementary Use Tax Act, Section 4 of the Water Commission
15 Act of 1985, subsections (b), (c) and (d) of Section 5.01 of
16 the Local Mass Transit District Act, or subsections (e), (f)
17 and (g) of Section 4.03 of the Regional Transportation
18 Authority Act, from the person who made the erroneous
19 payment. If no tax or penalty or interest is due and no
20 proceeding is pending to determine whether such person is
21 indebted to the Department for tax or penalty or interest,
22 the credit memorandum or refund shall be issued to the
23 claimant; or (in the case of a credit memorandum) the credit
24 memorandum may be assigned and set over by the lawful holder
25 thereof, subject to reasonable rules of the Department, to
26 any other person who is subject to this Act, the Use Tax Act,
27 the Service Occupation Tax Act, the Service Use Tax Act, any
28 local occupation or use tax administered by the Department
29 the Municipal Retailers' Occupation Tax Act, the Municipal
30 Use Tax Act, the Municipal Service Occupation Tax Act, the
31 County Retailers' Occupation Tax Act, the County
32 Supplementary Retailers' Occupation Tax Act, the County
33 Service Occupation Tax Act, the County Supplementary Service
34 Occupation Tax Act, the County Use Tax Act, the County
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1 Supplementary Use Tax Act, Section 4 of the Water Commission
2 Act of 1985, subsections (b), (c) and (d) of Section 5.01 of
3 the Local Mass Transit District Act, or subsections (e), (f)
4 and (g) of Section 4.03 of the Regional Transportation
5 Authority Act, and the amount thereof applied by the
6 Department against any tax or penalty or interest due or to
7 become due under this Act or under the Use Tax Act, the
8 Service Occupation Tax Act, the Service Use Tax Act, any
9 local occupation or use tax administered by the Department
10 the Municipal Retailers' Occupation Tax Act, the Municipal
11 Use Tax Act, the Municipal Service Occupation Tax Act, the
12 County Retailers' Occupation Tax Act, the County
13 Supplementary Retailers' Occupation Tax Act, the County
14 Service Occupation Tax Act, the County Supplementary Service
15 Occupation Tax Act, the County Use Tax Act, the County
16 Supplementary Use Tax Act, Section 4 of the Water Commission
17 Act of 1985, subsections (b), (c) and (d) of Section 5.01 of
18 the Local Mass Transit District Act, or subsections (e), (f)
19 and (g) of Section 4.03 of the Regional Transportation
20 Authority Act, from such assignee. However, as to any claim
21 for credit or refund filed with the Department on and after
22 each January 1 and July 1 no amount of tax or penalty or
23 interest erroneously paid (either in total or partial
24 liquidation of a tax or penalty or amount of interest under
25 this Act) more than 3 years prior to such January 1 and July
26 1, respectively, shall be credited or refunded, except that
27 if both the Department and the taxpayer have agreed to an
28 extension of time to issue a notice of tax liability as
29 provided in Section 4 of this Act, such claim may be filed at
30 any time prior to the expiration of the period agreed upon.
31 No claim may be allowed for any amount paid to the
32 Department, whether paid voluntarily or involuntarily, if
33 paid in total or partial liquidation of an assessment which
34 had become final before the claim for credit or refund to
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1 recover the amount so paid is filed with the Department, or
2 if paid in total or partial liquidation of a judgment or
3 order of court. No credit may be allowed or refund made for
4 any amount paid by or collected from any claimant unless it
5 appears (a) that the claimant bore the burden of such amount
6 and has not been relieved thereof nor reimbursed therefor and
7 has not shifted such burden directly or indirectly through
8 inclusion of such amount in the price of the tangible
9 personal property sold by him or her or in any manner
10 whatsoever; and that no understanding or agreement, written
11 or oral, exists whereby he or she or his or her legal
12 representative may be relieved of the burden of such amount,
13 be reimbursed therefor or may shift the burden thereof; or
14 (b) that he or she or his or her legal representative has
15 repaid unconditionally such amount to his or her vendee (1)
16 who bore the burden thereof and has not shifted such burden
17 directly or indirectly, in any manner whatsoever; (2) who, if
18 he or she has shifted such burden, has repaid unconditionally
19 such amount to his own vendee; and (3) who is not entitled to
20 receive any reimbursement therefor from any other source than
21 from his or her vendor, nor to be relieved of such burden in
22 any manner whatsoever. No credit may be allowed or refund
23 made for any amount paid by or collected from any claimant
24 unless it appears that the claimant has unconditionally
25 repaid, to the purchaser, any amount collected from the
26 purchaser and retained by the claimant with respect to the
27 same transaction under the Use Tax Act.
28 Any credit or refund that is allowed under this Section
29 shall bear interest at the rate and in the manner specified
30 in the Uniform Penalty and Interest Act.
31 In case the Department determines that the claimant is
32 entitled to a refund, such refund shall be made only from
33 such appropriation as may be available for that purpose. If
34 it appears unlikely that the amount appropriated would permit
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1 everyone having a claim allowed during the period covered by
2 such appropriation to elect to receive a cash refund, the
3 Department, by rule or regulation, shall provide for the
4 payment of refunds in hardship cases and shall define what
5 types of cases qualify as hardship cases.
6 If a retailer who has failed to pay retailers' occupation
7 tax on gross receipts from retail sales is required by the
8 Department to pay such tax, such retailer, without filing any
9 formal claim with the Department, shall be allowed to take
10 credit against such retailers' occupation tax liability to
11 the extent, if any, to which such retailer has paid an amount
12 equivalent to retailers' occupation tax or has paid use tax
13 in error to his or her vendor or vendors of the same tangible
14 personal property which such retailer bought for resale and
15 did not first use before selling it, and no penalty or
16 interest shall be charged to such retailer on the amount of
17 such credit. However, when such credit is allowed to the
18 retailer by the Department, the vendor is precluded from
19 refunding any of that tax to the retailer and filing a claim
20 for credit or refund with respect thereto with the
21 Department. The provisions of this amendatory Act shall be
22 applied retroactively, regardless of the date of the
23 transaction.
24 (Source: P.A. 89-359, eff. 8-17-95.)
25 Section 30. The Cigarette Tax Act is amended by changing
26 Sections 4 and 6 as follows:
27 (35 ILCS 130/4) (from Ch. 120, par. 453.4)
28 Sec. 4. Distributor's license. No person may engage in
29 business as a distributor of cigarettes in this State within
30 the meaning of the first 2 definitions of distributor in
31 Section 1 of this Act without first having obtained a license
32 therefor from the Department. Application for license shall
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1 be made to the Department in form as furnished and prescribed
2 by the Department. Each applicant for a license under this
3 Section shall furnish to the Department on the form signed
4 and verified by the applicant the following information:
5 (a) The name and address of the applicant;
6 (b) The address of the location at which the applicant
7 proposes to engage in business as a distributor of cigarettes
8 in this State;
9 (c) Such other additional information as the Department
10 may lawfully require by its rules and regulations.
11 The annual license fee payable to the Department for each
12 distributor's license shall be $250. The purpose of such
13 annual license fee is to defray the cost, to the Department,
14 of coding, serializing or coding and serializing cigarette
15 tax stamps. Each applicant for license shall pay such fee to
16 the Department at the time of submitting his application for
17 license to the Department.
18 Every applicant who is required to procure a
19 distributor's license shall file with his application a joint
20 and several bond. Such bond shall be executed to the
21 Department of Revenue, with good and sufficient surety or
22 sureties residing or licensed to do business within the State
23 of Illinois, in the amount of $2,500, conditioned upon the
24 true and faithful compliance by the licensee with all of the
25 provisions of this Act. Such bond, or a reissue thereof, or a
26 substitute therefor, shall be kept in effect during the
27 entire period covered by the license. A separate application
28 for license shall be made, a separate annual license fee
29 paid, and a separate bond filed, for each place of business
30 at which a person who is required to procure a distributor's
31 license under this Section proposes to engage in business as
32 a distributor in Illinois under this Act.
33 The following are ineligible to receive a distributor's
34 license under this Act:
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1 (1) a person who is not of good character and reputation
2 in the community in which he resides;
3 (2) a person who has been convicted of a felony under
4 any Federal or State law, if the Department, after
5 investigation and a hearing, if requested by the applicant,
6 determines that such person has not been sufficiently
7 rehabilitated to warrant the public trust;
8 (3) a corporation, if any officer, manager or director
9 thereof, or any stockholder or stockholders owning in the
10 aggregate more than 5% of the stock of such corporation,
11 would not be eligible to receive a license under this Act for
12 any reason.
13 The Department, upon receipt of an application, license
14 fee and bond in proper form, from a person who is eligible to
15 receive a distributor's license under this Act, shall issue
16 to such applicant a license in form as prescribed by the
17 Department, which license shall permit the applicant to which
18 it is issued to engage in business as a distributor at the
19 place shown in his application. All licenses issued by the
20 Department under this Act shall be valid for not to exceed
21 one year after issuance unless sooner revoked, canceled or
22 suspended as provided in this Act. No license issued under
23 this Act is transferable or assignable. Such license shall be
24 conspicuously displayed in the place of business conducted by
25 the licensee in Illinois under such license.
26 Any person aggrieved by any decision of the Department
27 under this Section may, within 20 days after notice of the
28 decision, protest and request a hearing. Upon receiving a
29 request for a hearing, the Department shall give notice to
30 the person requesting the hearing of the time and place fixed
31 for the hearing and shall hold a hearing in conformity with
32 the provisions of this Act and then issue its final
33 administrative decision in the matter to that person. In the
34 absence of a protest and request for a hearing within 20
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1 days, the Department's decision shall become final without
2 any further determination being made or notice given.
3 (Source: P.A. 78-255.)
4 (35 ILCS 130/6) (from Ch. 120, par. 453.6)
5 Sec. 6. Revocation, cancellation, or suspension of
6 license. The Department may, after notice and hearing as
7 provided for by this Act, revoke, cancel or suspend the
8 license of any distributor for the violation of any provision
9 of this Act, or for noncompliance with any provision herein
10 contained, or for any noncompliance with any lawful rule or
11 regulation promulgated by the Department under Section 8 of
12 this Act, or because the licensee is determined to be
13 ineligible for a distributor's license for any one or more of
14 the reasons provided for in Section 4 of this Act. However,
15 no such license shall be revoked, cancelled or suspended,
16 except after a hearing by the Department with notice to the
17 distributor, as aforesaid, and affording such distributor a
18 reasonable opportunity to appear and defend, and any
19 distributor aggrieved by any decision of the Department with
20 respect thereto may have the determination of the Department
21 judicially reviewed, as herein provided. Notice of such
22 hearing shall be in writing and shall contain a statement of
23 the charges preferred against the distributor.
24 Any distributor aggrieved by any decision of the
25 Department under this Section may, within 20 days after
26 notice of the decision, protest and request a hearing. Upon
27 receiving a request for a hearing, the Department shall give
28 notice in writing to the distributor requesting the hearing
29 that contains a statement of the charges preferred against
30 the distributor and that states the time and place fixed for
31 the hearing. The Department shall hold the hearing in
32 conformity with the provisions of this Act and then issue its
33 final administrative decision in the matter to the
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1 distributor. In the absence of a protest and request for a
2 hearing within 20 days, the Department's decision shall
3 become final without any further determination being made or
4 notice given.
5 No license so revoked, as aforesaid, shall be reissued to
6 any such distributor within a period of 6 months after the
7 date of the final determination of such revocation. No such
8 license shall be reissued at all so long as the person who
9 would receive the license is ineligible to receive a
10 distributor's license under this Act for any one or more of
11 the reasons provided for in Section 4 of this Act.
12 The Department upon complaint filed in the circuit court
13 may by injunction restrain any person who fails, or refuses,
14 to comply with any of the provisions of this Act from acting
15 as a distributor of cigarettes in this State.
16 (Source: P.A. 79-1365; 79-1366.)
17 Section 35. The Cigarette Use Tax Act is amended by
18 changing Sections 4 and 6 as follows:
19 (35 ILCS 135/4) (from Ch. 120, par. 453.34)
20 Sec. 4. Distributor's license. A distributor maintaining
21 a place of business in this State, if required to procure a
22 license or allowed to obtain a permit as a distributor under
23 the Cigarette Tax Act, need not obtain an additional license
24 or permit under this Act, but shall be deemed to be
25 sufficiently licensed or registered by virtue of his being
26 licensed or registered under the Cigarette Tax Act.
27 Every distributor maintaining a place of business in this
28 State, if not required to procure a license or allowed to
29 obtain a permit as a distributor under the Cigarette Tax Act,
30 shall make a verified application to the Department (upon a
31 form prescribed and furnished by the Department) for a
32 license to act as a distributor under this Act. In completing
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1 such application, the applicant shall furnish such
2 information as the Department may reasonably require.
3 The annual license fee payable to the Department for each
4 distributor's license shall be $250. The purpose of such
5 annual license fee is to defray the cost, to the Department,
6 of coding, serializing or coding and serializing cigarette
7 tax stamps. The applicant for license shall pay such fee to
8 the Department at the time of submitting the application for
9 license to the Department.
10 Such applicant shall file, with his application, a joint
11 and several bond. Such bond shall be executed to the
12 Department of Revenue, with good and sufficient surety or
13 sureties residing or licensed to do business within the State
14 of Illinois, in the amount of $2,500, conditioned upon the
15 true and faithful compliance by the licensee with all of the
16 provisions of this Act. Such bond, or a reissue thereof, or a
17 substitute therefor, shall be kept in effect during the
18 entire period covered by the license. A separate application
19 for license shall be made, a separate annual license fee
20 paid, and a separate bond filed, for each place of business
21 at or from which the applicant proposes to act as a
22 distributor under this Act and for which the applicant is not
23 required to procure a license or allowed to obtain a permit
24 as a distributor under the Cigarette Tax Act.
25 The following are ineligible to receive a distributor's
26 license under this Act:
27 (1) a person who is not of good character and reputation
28 in the community in which he resides;
29 (2) a person who has been convicted of a felony under
30 any Federal or State law, if the Department, after
31 investigation and a hearing, if requested by the applicant,
32 determines that such person has not been sufficiently
33 rehabilitated to warrant the public trust;
34 (3) a corporation, if any officer, manager or director
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1 thereof, or any stockholder or stockholders owning in the
2 aggregate more than 5% of the stock of such corporation,
3 would not be eligible to receive a license hereunder for any
4 reason.
5 Upon approval of such application and bond and payment of
6 the required annual license fee, the Department shall issue a
7 license to the applicant. Such license shall permit the
8 applicant to engage in business as a distributor at or from
9 the place shown in his application. All licenses issued by
10 the Department under this Act shall be valid for not to
11 exceed one year after issuance unless sooner revoked,
12 canceled or suspended as in this Act provided. No license
13 issued under this Act is transferable or assignable. Such
14 license shall be conspicuously displayed at the place of
15 business for which it is issued.
16 Any person aggrieved by any decision of the Department
17 under this Section may, within 20 days after notice of the
18 decision, protest and request a hearing. Upon receiving a
19 request for a hearing, the Department shall give notice to
20 the person requesting the hearing of the time and place fixed
21 for the hearing and shall hold a hearing in conformity with
22 the provisions of this Act and then issue its final
23 administrative decision in the matter to that person. In the
24 absence of a protest and request for a hearing within 20
25 days, the Department's decision shall become final without
26 any further determination being made or notice given.
27 (Source: P.A. 78-255.)
28 (35 ILCS 135/6) (from Ch. 120, par. 453.36)
29 Sec. 6. Revocation, cancellation, or suspension of
30 license. The Department may, after notice and hearing as
31 provided for by this Act, revoke, cancel or suspend the
32 license of any distributor for the violation of any provision
33 of this Act, or for non-compliance with any provision herein
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1 contained, or for any non-compliance with any lawful rule or
2 regulation promulgated by the Department under Section 21 of
3 this Act, or because the licensee is determined to be
4 ineligible for a distributor's license for any one or more of
5 the reasons provided for in Section 4 of this Act. However,
6 no such license shall be revoked, canceled or suspended,
7 except after a hearing by the Department with notice to the
8 distributor, as aforesaid, and affording such distributor a
9 reasonable opportunity to appear and defend, and any
10 distributor aggrieved by any decision of the Department with
11 respect thereto may have the determination of the Department
12 judicially reviewed, as herein provided. Notice of such
13 hearing shall be in writing and shall contain a statement of
14 the charges preferred against the distributor.
15 Any distributor aggrieved by any decision of the
16 Department under this Section may, within 20 days after
17 notice of the decision, protest and request a hearing. Upon
18 receiving a request for a hearing, the Department shall give
19 notice in writing to the distributor requesting the hearing
20 that contains a statement of the charges preferred against
21 the distributor and that states the time and place fixed for
22 the hearing. The Department shall hold the hearing in
23 conformity with the provisions of this Act and then issue its
24 final administrative decision in the matter to the
25 distributor. In the absence of a protest and request for a
26 hearing within 20 days, the Department's decision shall
27 become final without any further determination being made or
28 notice given.
29 No license so revoked, shall be reissued to any such
30 distributor within a period of 6 months after the date of the
31 final determination of such revocation. No such license
32 shall be reissued at all so long as the person who would
33 receive the license is ineligible to receive a distributor's
34 license under this Act for any one or more of the reasons
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1 provided for in Section 4 of this Act.
2 The Department upon complaint filed in the circuit court
3 may by injunction restrain any person who fails, or refuses,
4 to comply with this Act from acting as a distributor of
5 cigarettes in this State.
6 (Source: P.A. 79-1365; 79-1366.)
7 Section 40. The Public Utilities Act is amended by
8 changing Section 8-403.1 as follows:
9 (220 ILCS 5/8-403.1) (from Ch. 111 2/3, par. 8-403.1)
10 Sec. 8-403.1. Electricity purchased from qualified solid
11 waste energy facility; tax credit; distributions for economic
12 development.
13 (a) It is hereby declared to be the policy of this State
14 to encourage the development of alternate energy production
15 facilities in order to conserve our energy resources and to
16 provide for their most efficient use.
17 (b) For the purpose of this Section and Section 9-215.1,
18 "qualified solid waste energy facility" means a facility
19 determined by the Illinois Commerce Commission to qualify as
20 such under the Local Solid Waste Disposal Act, to use methane
21 gas generated from landfills as its primary fuel, and to
22 possess characteristics that would enable it to qualify as a
23 cogeneration or small power production facility under federal
24 law.
25 (c) In furtherance of the policy declared in this
26 Section, the Illinois Commerce Commission shall require
27 electric utilities to enter into long-term contracts to
28 purchase electricity from qualified solid waste energy
29 facilities located in the electric utility's service area,
30 for a period beginning on the date that the facility begins
31 generating electricity and having a duration of not less than
32 10 years in the case of facilities fueled by
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1 landfill-generated methane, or 20 years in the case of
2 facilities fueled by methane generated from a landfill owned
3 by a forest preserve district. The purchase rate contained
4 in such contracts shall be equal to the average amount per
5 kilowatt-hour paid from time to time by the unit or units of
6 local government in which the electricity generating
7 facilities are located, excluding amounts paid for street
8 lighting and pumping service.
9 (d) Whenever a public utility is required to purchase
10 electricity pursuant to subsection (c) above, it shall be
11 entitled to credits in respect of its obligations to remit to
12 the State taxes it has collected under the Electricity Excise
13 Tax Law equal to the amounts, if any, by which payments for
14 such electricity exceed (i) the then current rate at which
15 the utility must purchase the output of qualified facilities
16 pursuant to the federal Public Utility Regulatory Policies
17 Act of 1978, less (ii) any costs, expenses, losses, damages
18 or other amounts incurred by the utility, or for which it
19 becomes liable, arising out of its failure to obtain such
20 electricity from such other sources. The amount of any such
21 credit shall, in the first instance, be determined by the
22 utility, which shall make a monthly report of such credits to
23 the Illinois Commerce Commission and, on its monthly tax
24 return, to the Illinois Department of Revenue. Under no
25 circumstances shall a utility be required to purchase
26 electricity from a qualified solid waste energy facility at
27 the rate prescribed in subsection (c) of this Section if such
28 purchase would result in estimated tax credits that exceed,
29 on a monthly basis, the utility's estimated obligation to
30 remit to the State taxes it has collected under the
31 Electricity Excise Tax Law. The owner or operator shall
32 negotiate facility operating conditions with the purchasing
33 utility in accordance with that utility's posted standard
34 terms and conditions for small power producers. If the
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1 Department of Revenue disputes the amount of any such credit,
2 such dispute shall be decided by the Illinois Commerce
3 Commission. Whenever a qualified solid waste energy facility
4 has paid or otherwise satisfied in full the capital costs or
5 indebtedness incurred in developing and implementing the
6 qualified facility, the qualified facility shall reimburse
7 the Public Utility Fund and the General Revenue Fund in the
8 State treasury for the actual reduction in payments to those
9 Funds caused by this subsection (d) in a manner to be
10 determined by the Illinois Commerce Commission and based on
11 the manner in which revenues for those Funds were reduced.
12 (e) The Illinois Commerce Commission shall not require
13 an electric utility to purchase electricity from any
14 qualified solid waste energy facility which is owned or
15 operated by an entity that is primarily engaged in the
16 business of producing or selling electricity, gas, or useful
17 thermal energy from a source other than one or more qualified
18 solid waste energy facilities.
19 (f) This Section does not require an electric utility to
20 construct additional facilities unless those facilities are
21 paid for by the owner or operator of the affected qualified
22 solid waste energy facility.
23 (g) The Illinois Commerce Commission shall require that:
24 (1) electric utilities use the electricity purchased from a
25 qualified solid waste energy facility to displace electricity
26 generated from nuclear power or coal mined and purchased
27 outside the boundaries of the State of Illinois before
28 displacing electricity generated from coal mined and
29 purchased within the State of Illinois, to the extent
30 possible, and (2) electric utilities report annually to the
31 Commission on the extent of such displacements.
32 (h) Nothing in this Section is intended to cause an
33 electric utility that is required to purchase power hereunder
34 to incur any economic loss as a result of its purchase. All
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1 amounts paid for power which a utility is required to
2 purchase pursuant to subparagraph (c) shall be deemed to be
3 costs prudently incurred for purposes of computing charges
4 under rates authorized by Section 9-220 of this Act. Tax
5 credits provided for herein shall be reflected in charges
6 made pursuant to rates so authorized to the extent such
7 credits are based upon a cost which is also reflected in such
8 charges.
9 (i) Beginning in February 1999 and through January 2009,
10 each qualified solid waste energy facility that sells
11 electricity to an electric utility at the purchase rate
12 described in subsection (c) shall file with the Department of
13 Revenue State Treasurer on or before the 15th of each month a
14 form, prescribed by the Department of Revenue State
15 Treasurer, that states the number of kilowatt hours of
16 electricity for which payment was received at that purchase
17 rate from electric utilities in Illinois during the
18 immediately preceding month. This form shall be accompanied
19 by a payment from the qualified solid waste energy facility
20 in an amount equal to six-tenths of a mill ($0.0006) per
21 kilowatt hour of electricity stated on the form. Payments
22 received by the Department of Revenue State Treasurer shall
23 be deposited into the Municipal Economic Development Fund, a
24 trust fund created outside the State treasury. The State
25 Treasurer may invest the moneys in the Fund in any investment
26 authorized by the Public Funds Investment Act, and investment
27 income shall be deposited into and become part of the Fund.
28 Moneys in the Fund shall be used by the State Treasurer as
29 provided in subsection (j). The obligation of a qualified
30 solid waste energy facility to make payments into the
31 Municipal Economic Development Fund shall terminate upon
32 either: (1) expiration or termination of a facility's
33 contract to sell electricity to an electric utility at the
34 purchase rate described in subsection (c); or (2) entry of an
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1 enforceable, final, and non-appealable order by a court of
2 competent jurisdiction that Public Act 89-448 is invalid.
3 Payments by a qualified solid waste energy facility into the
4 Municipal Economic Development Fund do not relieve the
5 qualified solid waste energy facility of its obligation to
6 reimburse the Public Utility Fund and the General Revenue
7 Fund for the actual reduction in payments to those Funds as a
8 result of credits received by electric utilities under
9 subsection (d).
10 (j) The State Treasurer, without appropriation, must
11 make distributions immediately after January 15, April 15,
12 July 15, and October 15 of each year, up to maximum aggregate
13 distributions of $500,000 for the distributions made in the 4
14 quarters beginning with the April distribution and ending
15 with the January distribution, from the Municipal Economic
16 Development Fund to each city, village, or incorporated town
17 that has within its boundaries an incinerator that: (1) uses
18 municipal waste as its primary fuel to generate electricity;
19 (2) was determined by the Illinois Commerce Commission to
20 qualify as a qualified solid waste energy facility prior to
21 the effective date of Public Act 89-448; and (3) commenced
22 operation prior to January 1, 1998. Total distributions in
23 the aggregate to all qualified cities, villages, and
24 incorporated towns in the 4 quarters beginning with the April
25 distribution and ending with the January distribution shall
26 not exceed $500,000. The amount of each distribution shall
27 be determined pro rata based on the population of the city,
28 village, or incorporated town compared to the total
29 population of all cities, villages, and incorporated towns
30 eligible to receive a distribution. Distributions received
31 by a city, village, or incorporated town must be held in a
32 separate account and may be used only to promote and enhance
33 industrial, commercial, residential, service, transportation,
34 and recreational activities and facilities within its
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1 boundaries, thereby enhancing the employment opportunities,
2 public health and general welfare, and economic development
3 within the community, including administrative expenditures
4 exclusively to further these activities. These funds,
5 however, shall not be used by the city, village, or
6 incorporated town, directly or indirectly, to purchase,
7 lease, operate, or in any way subsidize the operation of any
8 incinerator, and these funds shall not be paid, directly or
9 indirectly, by the city, village, or incorporated town to the
10 owner, operator, lessee, shareholder, or bondholder of any
11 incinerator. Moreover, these funds shall not be used to pay
12 attorneys fees in any litigation relating to the validity of
13 Public Act 89-448. Nothing in this Section prevents a city,
14 village, or incorporated town from using other corporate
15 funds for any legitimate purpose. For purposes of this
16 subsection, the term "municipal waste" has the meaning
17 ascribed to it in Section 3.21 of the Environmental
18 Protection Act.
19 (k) If maximum aggregate distributions of $500,000 under
20 subsection (j) have been made after the January distribution
21 from the Municipal Economic Development Fund, then the
22 balance in the Fund shall be refunded to the qualified solid
23 waste energy facilities that made payments that were
24 deposited into the Fund during the previous 12-month period.
25 The refunds shall be prorated based upon the facility's
26 payments in relation to total payments for that 12-month
27 period.
28 (l) Beginning January 1, 2000, and each January 1
29 thereafter, each city, village, or incorporated town that
30 received distributions from the Municipal Economic
31 Development Fund, continued to hold any of those
32 distributions, or made expenditures from those distributions
33 during the immediately preceding year shall submit to a
34 financial and compliance and program audit of those
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1 distributions performed by the Auditor General at no cost to
2 the city, village, or incorporated town that received the
3 distributions. The audit should be completed by June 30 or
4 as soon thereafter as possible. The audit shall be submitted
5 to the State Treasurer and those officers enumerated in
6 Section 3-14 of the Illinois State Auditing Act. If the
7 Auditor General finds that distributions have been expended
8 in violation of this Section, the Auditor General shall refer
9 the matter to the Attorney General. The Attorney General may
10 recover, in a civil action, 3 times the amount of any
11 distributions illegally expended. For purposes of this
12 subsection, the terms "financial audit," "compliance audit",
13 and "program audit" have the meanings ascribed to them in
14 Sections 1-13 and 1-15 of the Illinois State Auditing Act.
15 (Source: P.A. 89-448, eff. 3-14-96; 90-813, eff. 1-29-99.)
16 Section 99. Effective date. This Act takes effect
17 January 1, 2001.
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1 INDEX
2 Statutes amended in order of appearance
3 35 ILCS 5/201 from Ch. 120, par. 2-201
4 35 ILCS 5/203 from Ch. 120, par. 2-203
5 35 ILCS 5/405
6 35 ILCS 5/803 from Ch. 120, par. 8-803
7 35 ILCS 5/1501 from Ch. 120, par. 15-1501
8 35 ILCS 105/3-5 from Ch. 120, par. 439.3-5
9 35 ILCS 105/3-70 from Ch. 120, par. 439.3-70
10 35 ILCS 105/9 from Ch. 120, par. 439.9
11 35 ILCS 105/10 from Ch. 120, par. 439.10
12 35 ILCS 105/22 from Ch. 120, par. 439.22
13 35 ILCS 110/20 from Ch. 120, par. 439.50
14 35 ILCS 115/3-5 from Ch. 120, par. 439.103-5
15 35 ILCS 115/20 from Ch. 120, par. 439.120
16 35 ILCS 120/3 from Ch. 120, par. 442
17 35 ILCS 120/6 from Ch. 120, par. 445
18 35 ILCS 130/4 from Ch. 120, par. 453.4
19 35 ILCS 130/6 from Ch. 120, par. 453.6
20 35 ILCS 135/4 from Ch. 120, par. 453.34
21 35 ILCS 135/6 from Ch. 120, par. 453.36