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91_SB0284
LRB9105520PTpk
1 AN ACT to amend the Illinois Municipal Code by changing
2 Section 8-11-2.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Municipal Code is amended by
6 changing Section 8-11-2 as follows:
7 (65 ILCS 5/8-11-2) (from Ch. 24, par. 8-11-2)
8 Sec. 8-11-2. Municipal utilities tax. The corporate
9 authorities of any municipality may tax any or all of the
10 following occupations or privileges:
11 1. Persons engaged in the business of transmitting
12 messages by means of electricity or radio magnetic waves,
13 or fiber optics, at a rate not to exceed 5% of the gross
14 receipts from that business originating within the
15 corporate limits of the municipality.
16 2. Persons engaged in the business of distributing,
17 supplying, furnishing, or selling gas for use or
18 consumption within the corporate limits of a municipality
19 of 500,000 or fewer population, and not for resale, at a
20 rate not to exceed 5% of the gross receipts therefrom.
21 2a. Persons engaged in the business of
22 distributing, supplying, furnishing, or selling gas for
23 use or consumption within the corporate limits of a
24 municipality of over 500,000 population, and not for
25 resale, at a rate not to exceed 8% of the gross receipts
26 therefrom. If imposed, this tax shall be paid in monthly
27 payments.
28 3. The privilege of using or consuming electricity
29 acquired in a purchase at retail and used or consumed
30 within the corporate limits of the municipality at rates
31 not to exceed the following maximum rates, calculated on
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1 a monthly basis for each purchaser:
2 (i) for the first 2,000 kilowatt-hours used or
3 consumed in a month; 0.61 cents per kilowatt-hour;
4 (ii) for the next 48,000 kilowatt-hours used
5 or consumed in a month; 0.40 cents per
6 kilowatt-hour;
7 (iii) for the next 50,000 kilowatt-hours used
8 or consumed in a month; 0.36 cents per
9 kilowatt-hour;
10 (iv) for the next 400,000 kilowatt-hours used
11 or consumed in a month; 0.35 cents per
12 kilowatt-hour;
13 (v) for the next 500,000 kilowatt-hours used
14 or consumed in a month; 0.34 cents per
15 kilowatt-hour;
16 (vi) for the next 2,000,000 kilowatt-hours
17 used or consumed in a month; 0.32 cents per
18 kilowatt-hour;
19 (vii) for the next 2,000,000 kilowatt-hours
20 used or consumed in a month; 0.315 cents per
21 kilowatt-hour;
22 (viii) for the next 5,000,000 kilowatt-hours
23 used or consumed in a month; 0.31 cents per
24 kilowatt-hour;
25 (ix) for the next 10,000,000 kilowatt-hours
26 used or consumed in a month; 0.305 cents per
27 kilowatt-hour; and
28 (x) for all electricity used or consumed in
29 excess of 20,000,000 kilowatt-hours in a month, 0.30
30 cents per kilowatt-hour.
31 If a municipality imposes a tax at rates lower than
32 either the maximum rates specified in this Section or the
33 alternative maximum rates promulgated by the Illinois
34 Commerce Commission, as provided below, the tax rates
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1 shall be imposed upon the kilowatt hour categories set
2 forth above with the same proportional relationship as
3 that which exists among such maximum rates.
4 Notwithstanding the foregoing, until December 31, 2008,
5 no municipality shall establish rates that are in excess
6 of rates reasonably calculated to produce revenues that
7 equal the maximum total revenues such municipality could
8 have received under the tax authorized by this
9 subparagraph in the last full calendar year prior to the
10 effective date of Section 65 of Public Act 90-561 (August
11 1, 1998), except that a municipality served by an
12 Illinois electric utility serving more than 12,500
13 customers in Illinois for which a decrease in base rates
14 has been or is placed into effect between October 1, 1996
15 and the dates specified in subsection (b) of Section
16 16-111 of the Public Utilities Act, other than pursuant
17 to the requirements of subsection (b) of Section 16-111
18 of that Act, may establish rates reasonably calculated to
19 produce revenues that equal the maximum total revenues
20 the municipality could have received under the tax
21 authorized by this subparagraph in either of the last 2
22 full calendar years prior to effective date of Section 65
23 of Public Act 90-561 (August 1, 1998) this amendatory Act
24 of 1997; provided that this shall not be a limitation on
25 the amount of tax revenues actually collected by such
26 municipality.
27 Upon the request of the corporate authorities of a
28 municipality, the Illinois Commerce Commission shall,
29 within 90 days after receipt of such request, promulgate
30 alternative rates for each of these kilowatt-hour
31 categories that will reflect, as closely as reasonably
32 practical for that municipality, the distribution of the
33 tax among classes of purchasers as if the tax were based
34 on a uniform percentage of the purchase price of
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1 electricity. A municipality that has adopted an
2 ordinance imposing a tax pursuant to subparagraph 3 as it
3 existed prior to the effective date of Section 65 of
4 Public Act 90-561 (August 1, 1998) this amendatory Act of
5 1997 may, rather than imposing the tax permitted by
6 Public Act 90-561 this amendatory Act of 1997, continue
7 to impose the tax pursuant to that ordinance with respect
8 to gross receipts received from residential customers
9 through July 31, 1999, and with respect to gross receipts
10 from any non-residential customer until the first bill
11 issued to such customer for delivery services in
12 accordance with Section 16-104 of the Public Utilities
13 Act but in no case later than the last bill issued to
14 such customer before December 31, 2000. No ordinance
15 imposing the tax permitted by Public Act 90-561 this
16 amendatory Act of 1997 shall be applicable to any
17 non-residential customer until the first bill issued to
18 such customer for delivery services in accordance with
19 Section 16-104 of the Public Utilities Act but in no case
20 later than the last bill issued to such non-residential
21 customer before December 31, 2000.
22 4. Persons engaged in the business of distributing,
23 supplying, furnishing, or selling water for use or
24 consumption within the corporate limits of the
25 municipality, and not for resale, at a rate not to exceed
26 5% of the gross receipts therefrom.
27 None of the taxes authorized by this Section may be
28 imposed with respect to any transaction in interstate
29 commerce or otherwise to the extent to which the business or
30 privilege may not, under the constitution and statutes of the
31 United States, be made the subject of taxation by this State
32 or any political sub-division thereof; nor shall any persons
33 engaged in the business of distributing, supplying,
34 furnishing, selling or transmitting gas, water, or
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1 electricity, or engaged in the business of transmitting
2 messages, or using or consuming electricity acquired in a
3 purchase at retail, be subject to taxation under the
4 provisions of this Section for those transactions that are or
5 may become subject to taxation under the provisions of the
6 "Home Rule Municipal Retailers' Occupation Tax Act"
7 authorized by Section 8-11-1; nor shall any tax authorized by
8 this Section be imposed upon any person engaged in a business
9 or on any privilege unless the tax is imposed in like manner
10 and at the same rate upon all persons engaged in businesses
11 of the same class in the municipality, whether privately or
12 municipally owned or operated, or exercising the same
13 privilege within the municipality.
14 Any of the taxes enumerated in this Section may be in
15 addition to the payment of money, or value of products or
16 services furnished to the municipality by the taxpayer as
17 compensation for the use of its streets, alleys, or other
18 public places, or installation and maintenance therein,
19 thereon or thereunder of poles, wires, pipes or other
20 equipment used in the operation of the taxpayer's business.
21 (a) If the corporate authorities of any home rule
22 municipality have adopted an ordinance that imposed a tax on
23 public utility customers, between July 1, 1971, and October
24 1, 1981, on the good faith belief that they were exercising
25 authority pursuant to Section 6 of Article VII of the 1970
26 Illinois Constitution, that action of the corporate
27 authorities shall be declared legal and valid,
28 notwithstanding a later decision of a judicial tribunal
29 declaring the ordinance invalid. No municipality shall be
30 required to rebate, refund, or issue credits for any taxes
31 described in this paragraph, and those taxes shall be deemed
32 to have been levied and collected in accordance with the
33 Constitution and laws of this State.
34 (b) In any case in which (i) prior to October 19, 1979,
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1 the corporate authorities of any municipality have adopted an
2 ordinance imposing a tax authorized by this Section (or by
3 the predecessor provision of the "Revised Cities and Villages
4 Act") and have explicitly or in practice interpreted gross
5 receipts to include either charges added to customers' bills
6 pursuant to the provision of paragraph (a) of Section 36 of
7 the Public Utilities Act or charges added to customers' bills
8 by taxpayers who are not subject to rate regulation by the
9 Illinois Commerce Commission for the purpose of recovering
10 any of the tax liabilities or other amounts specified in such
11 paragraph (a) of Section 36 of that Act, and (ii) on or after
12 October 19, 1979, a judicial tribunal has construed gross
13 receipts to exclude all or part of those charges, then
14 neither those municipality nor any taxpayer who paid the tax
15 shall be required to rebate, refund, or issue credits for any
16 tax imposed or charge collected from customers pursuant to
17 the municipality's interpretation prior to October 19, 1979.
18 This paragraph reflects a legislative finding that it would
19 be contrary to the public interest to require a municipality
20 or its taxpayers to refund taxes or charges attributable to
21 the municipality's more inclusive interpretation of gross
22 receipts prior to October 19, 1979, and is not intended to
23 prescribe or limit judicial construction of this Section. The
24 legislative finding set forth in this subsection does not
25 apply to taxes imposed after the effective date of Public Act
26 89-325 (January 1, 1996) this amendatory Act of 1995.
27 (c) The tax authorized by subparagraph 3 shall be
28 collected from the purchaser by the person maintaining a
29 place of business in this State who delivers the electricity
30 to the purchaser. This tax shall constitute a debt of the
31 purchaser to the person who delivers the electricity to the
32 purchaser and if unpaid, is recoverable in the same manner as
33 the original charge for delivering the electricity. Any tax
34 required to be collected pursuant to an ordinance authorized
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1 by subparagraph 3 and any such tax collected by a person
2 delivering electricity shall constitute a debt owed to the
3 municipality by such person delivering the electricity,
4 provided, that the person delivering electricity shall be
5 allowed credit for such tax related to deliveries of
6 electricity the charges for which are written off as
7 uncollectible, and provided further, that if such charges are
8 thereafter collected, the delivering supplier shall be
9 obligated to remit such tax. For purposes of this subsection
10 (c), any partial payment not specifically identified by the
11 purchaser shall be deemed to be for the delivery of
12 electricity. Persons delivering electricity shall collect the
13 tax from the purchaser by adding such tax to the gross charge
14 for delivering the electricity, in the manner prescribed by
15 the municipality. Persons delivering electricity shall also
16 be authorized to add to such gross charge an amount equal to
17 3% of the tax to reimburse the person delivering electricity
18 for the expenses incurred in keeping records, billing
19 customers, preparing and filing returns, remitting the tax
20 and supplying data to the municipality upon request. If the
21 person delivering electricity fails to collect the tax from
22 the purchaser, then the purchaser shall be required to pay
23 the tax directly to the municipality in the manner prescribed
24 by the municipality. Persons delivering electricity who file
25 returns pursuant to this paragraph (c) shall, at the time of
26 filing such return, pay the municipality the amount of the
27 tax collected pursuant to subparagraph 3.
28 (d) For the purpose of the taxes enumerated in this
29 Section:
30 "Gross receipts" means the consideration received for the
31 transmission of messages, the consideration received for
32 distributing, supplying, furnishing or selling gas for use or
33 consumption and not for resale, and the consideration
34 received for distributing, supplying, furnishing or selling
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1 water for use or consumption and not for resale, and for all
2 services rendered in connection therewith valued in money,
3 whether received in money or otherwise, including cash,
4 credit, services and property of every kind and material and
5 for all services rendered therewith, and shall be determined
6 without any deduction on account of the cost of transmitting
7 such messages, without any deduction on account of the cost
8 of the service, product or commodity supplied, the cost of
9 materials used, labor or service cost, or any other expenses
10 whatsoever. "Gross receipts" shall not include that portion
11 of the consideration received for distributing, supplying,
12 furnishing, or selling gas or water to, or for the
13 transmission of messages for, business enterprises described
14 in paragraph (e) of this Section to the extent and during the
15 period in which the exemption authorized by paragraph (e) is
16 in effect or for school districts or units of local
17 government described in paragraph (f) during the period in
18 which the exemption authorized in paragraph (f) is in effect.
19 "Gross receipts" shall not include amounts paid by
20 telecommunications retailers under the Telecommunications
21 Municipal Infrastructure Maintenance Fee Act.
22 For utility bills issued on or after May 1, 1996, but
23 before May 1, 1997, and for receipts from those utility
24 bills, "gross receipts" does not include one-third of (i)
25 amounts added to customers' bills under Section 9-222 of the
26 Public Utilities Act, or (ii) amounts added to customers'
27 bills by taxpayers who are not subject to rate regulation by
28 the Illinois Commerce Commission for the purpose of
29 recovering any of the tax liabilities described in Section
30 9-222 of the Public Utilities Act. For utility bills issued
31 on or after May 1, 1997, but before May 1, 1998, and for
32 receipts from those utility bills, "gross receipts" does not
33 include two-thirds of (i) amounts added to customers' bills
34 under Section 9-222 of the Public Utilities Act, or (ii)
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1 amount added to customers' bills by taxpayers who are not
2 subject to rate regulation by the Illinois Commerce
3 Commission for the purpose of recovering any of the tax
4 liabilities described in Section 9-222 of the Public
5 Utilities Act. For utility bills issued on or after May 1,
6 1998, and for receipts from those utility bills, "gross
7 receipts" does not include (i) amounts added to customers'
8 bills under Section 9-222 of the Public Utilities Act, or
9 (ii) amounts added to customers' bills by taxpayers who are
10 not subject to rate regulation by the Illinois Commerce
11 Commission for the purpose of recovering any of the tax
12 liabilities described in Section 9-222 of the Public
13 Utilities Act.
14 For purposes of this Section "gross receipts" shall not
15 include (i) amounts added to customers' bills under Section
16 9-221 of the Public Utilities Act, or (ii) charges added to
17 customers' bills to recover the surcharge imposed under the
18 Emergency Telephone System Act. This paragraph is not
19 intended to nor does it make any change in the meaning of
20 "gross receipts" for the purposes of this Section, but is
21 intended to remove possible ambiguities, thereby confirming
22 the existing meaning of "gross receipts" prior to the
23 effective date of Public Act 89-325 (January 1, 1996) this
24 amendatory Act of 1995.
25 The words "transmitting messages", in addition to the
26 usual and popular meaning of person to person communication,
27 shall include the furnishing, for a consideration, of
28 services or facilities (whether owned or leased), or both, to
29 persons in connection with the transmission of messages where
30 those persons do not, in turn, receive any consideration in
31 connection therewith, but shall not include such furnishing
32 of services or facilities to persons for the transmission of
33 messages to the extent that any such services or facilities
34 for the transmission of messages are furnished for a
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1 consideration, by those persons to other persons, for the
2 transmission of messages.
3 "Person" as used in this Section means any natural
4 individual, firm, trust, estate, partnership, association,
5 joint stock company, joint adventure, corporation, limited
6 liability company, municipal corporation, the State or any of
7 its political subdivisions, any State university created by
8 statute, or a receiver, trustee, guardian or other
9 representative appointed by order of any court.
10 "Person maintaining a place of business in this State"
11 shall mean any person having or maintaining within this
12 State, directly or by a subsidiary or other affiliate, an
13 office, generation facility, distribution facility,
14 transmission facility, sales office or other place of
15 business, or any employee, agent, or other representative
16 operating within this State under the authority of the person
17 or its subsidiary or other affiliate, irrespective of whether
18 such place of business or agent or other representative is
19 located in this State permanently or temporarily, or whether
20 such person, subsidiary or other affiliate is licensed or
21 qualified to do business in this State.
22 "Public utility" shall have the meaning ascribed to it in
23 Section 3-105 of the Public Utilities Act and shall include
24 telecommunications carriers as defined in Section 13-202 of
25 that Act and alternative retail electric suppliers as defined
26 in Section 16-102 of that Act.
27 "Purchase at retail" shall mean any acquisition of
28 electricity by a purchaser for purposes of use or
29 consumption, and not for resale, but shall not include the
30 use of electricity by a public utility directly in the
31 generation, production, transmission, delivery or sale of
32 electricity.
33 "Purchaser" shall mean any person who uses or consumes,
34 within the corporate limits of the municipality, electricity
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1 acquired in a purchase at retail.
2 In the case of persons engaged in the business of
3 transmitting messages through the use of mobile equipment,
4 such as cellular phones and paging systems, the gross
5 receipts from the business shall be deemed to originate
6 within the corporate limits of a municipality only if the
7 address to which the bills for the service are sent is within
8 those corporate limits. If, however, that address is not
9 located within a municipality that imposes a tax under this
10 Section, then (i) if the party responsible for the bill is
11 not an individual, the gross receipts from the business shall
12 be deemed to originate within the corporate limits of the
13 municipality where that party's principal place of business
14 in Illinois is located, and (ii) if the party responsible for
15 the bill is an individual, the gross receipts from the
16 business shall be deemed to originate within the corporate
17 limits of the municipality where that party's principal
18 residence in Illinois is located.
19 (e) Any municipality that imposes taxes upon public
20 utilities or upon the privilege of using or consuming
21 electricity pursuant to this Section whose territory includes
22 any part of an enterprise zone or federally designated
23 Foreign Trade Zone or Sub-Zone may, by a majority vote of its
24 corporate authorities, exempt from those taxes for a period
25 not exceeding 20 years any specified percentage of gross
26 receipts of public utilities received from, or electricity
27 used or consumed by, business enterprises that:
28 (1) either (i) make investments that cause the
29 creation of a minimum of 200 full-time equivalent jobs in
30 Illinois, (ii) make investments of at least $175,000,000
31 that cause the creation of a minimum of 150 full-time
32 equivalent jobs in Illinois, or (iii) make investments
33 that cause the retention of a minimum of 1,000 full-time
34 jobs in Illinois; and
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1 (2) are either (i) located in an Enterprise Zone
2 established pursuant to the Illinois Enterprise Zone Act
3 or (ii) Department of Commerce and Community Affairs
4 designated High Impact Businesses located in a federally
5 designated Foreign Trade Zone or Sub-Zone; and
6 (3) are certified by the Department of Commerce and
7 Community Affairs as complying with the requirements
8 specified in clauses (1) and (2) of this paragraph (e).
9 Upon adoption of the ordinance authorizing the exemption,
10 the municipal clerk shall transmit a copy of that ordinance
11 to the Department of Commerce and Community Affairs. The
12 Department of Commerce and Community Affairs shall determine
13 whether the business enterprises located in the municipality
14 meet the criteria prescribed in this paragraph. If the
15 Department of Commerce and Community Affairs determines that
16 the business enterprises meet the criteria, it shall grant
17 certification. The Department of Commerce and Community
18 Affairs shall act upon certification requests within 30 days
19 after receipt of the ordinance.
20 Upon certification of the business enterprise by the
21 Department of Commerce and Community Affairs, the Department
22 of Commerce and Community Affairs shall notify the Department
23 of Revenue of the certification. The Department of Revenue
24 shall notify the public utilities of the exemption status of
25 the gross receipts received from, and the electricity used or
26 consumed by, the certified business enterprises. Such
27 exemption status shall be effective within 3 months after
28 certification.
29 (f) A municipality that imposes taxes upon public
30 utilities or upon the privilege of using or consuming
31 electricity under this Section and whose territory includes
32 part of another unit of local government or a school district
33 may by ordinance exempt the other unit of local government or
34 school district from those taxes.
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1 (g) The amendment of this Section by Public Act 84-127
2 shall take precedence over any other amendment of this
3 Section by any other amendatory Act passed by the 84th
4 General Assembly before the effective date of Public Act
5 84-127 (August 1, 1985).
6 (h) In any case in which, before July 1, 1992, a person
7 engaged in the business of transmitting messages through the
8 use of mobile equipment, such as cellular phones and paging
9 systems, has determined the municipality within which the
10 gross receipts from the business originated by reference to
11 the location of its transmitting or switching equipment, then
12 (i) neither the municipality to which tax was paid on that
13 basis nor the taxpayer that paid tax on that basis shall be
14 required to rebate, refund, or issue credits for any such tax
15 or charge collected from customers to reimburse the taxpayer
16 for the tax and (ii) no municipality to which tax would have
17 been paid with respect to those gross receipts if the
18 provisions of Public Act 87-773 this amendatory Act of 1991
19 had been in effect before July 1, 1992, shall have any claim
20 against the taxpayer for any amount of the tax.
21 (Source: P.A. 89-325, eff. 1-1-96; 90-16, eff. 6-16-97;
22 90-561, eff. 8-1-98; 90-562, eff. 12-16-97; 90-655, eff.
23 7-30-98.)
24 Section 99. Effective date. This Act takes effect upon
25 becoming law.