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91_SB0546eng SB546 Engrossed LRB9104844PTpk 1 AN ACT in relation to taxes collected on behalf of the 2 State and held in trust for the benefit of the State. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Section 5. The Use Tax Act is amended by changing 6 Section 8 as follows: 7 (35 ILCS 105/8) (from Ch. 120, par. 439.8) 8 Sec. 8. Any retailer required to collect the tax imposed 9 by this Act shall be liable to the Department for such tax, 10 whether or not the tax has been collected by the retailer, 11 except when the retailer is relieved of the duty of remitting 12 the tax to the Department by virtue of having paid a tax 13 imposed by the Retailers' Occupation Tax Act upon his or her 14 gross receipts from the same transactions. To the extent 15 that a retailer required to collect the tax imposed by this 16 Act has actually collected that tax, such tax is held in 17 trust for the benefit of the Department.The tax herein18required to be collected by any retailer pursuant to this19Act, and any such tax collected by any retailer shall20constitute a debt owed by the retailer to this State, except21when such retailer is relieved of the duty of remitting such22tax to the Department by virtue of his being required to pay,23and his in fact paying, the tax imposed by the "Retailers'24Occupation Tax Act" upon his gross receipts from the same25transaction.26 (Source: P.A. 76-222.) 27 Section 10. The Service Use Tax Act is amended by 28 changing Section 8 as follows: 29 (35 ILCS 110/8) (from Ch. 120, par. 439.38) SB546 Engrossed -2- LRB9104844PTpk 1 Sec. 8. Any serviceman required to collect the tax 2 imposed by this Act shall be liable to the Department for the 3 tax, whether or not the tax has been collected by the 4 serviceman, except when the serviceman is relieved of the 5 duty of remitting the tax to the Department by virtue of 6 having paid a tax imposed by the Service Occupation Tax Act 7 upon his or her sale of service involving the incidental 8 transfer by him or her of the same property. To the extent 9 that a serviceman required to collect the tax imposed by this 10 Act has actually collected that tax, the tax is held in trust 11 for the benefit of the Department.The tax herein required to12be collected by any serviceman pursuant to this Act, and any13such tax collected by any serviceman shall constitute a debt14owed by the serviceman to this State, except when such15serviceman is relieved of the duty of remitting such tax to16the Department by virtue of his being required to pay, and17his in fact paying, the tax imposed by the "Service18Occupation Tax Act" upon his sale of service involving the19incidental transfer by him of the same property.20 (Source: P.A. 76-223.) 21 Section 15. The Telecommunications Excise Tax Act is 22 amended by changing Section 5 as follows: 23 (35 ILCS 630/5) (from Ch. 120, par. 2005) 24 Sec. 5. Any retailer maintaining a place of business in 25 this State shall collect and remit to the Department the tax 26 imposed by this Act. Any such retailer shall be liable for 27 the tax whether or not the tax has been collected by the 28 retailer. To the extent that a retailer required to collect 29 the tax imposed by this Act has actually collected that tax, 30 such tax is held in trust for the benefit of the Department. 31The tax imposed hereunder shall be collected from the32taxpayer by a retailer maintaining a place of business inSB546 Engrossed -3- LRB9104844PTpk 1this State and remitted to the Department pursuant to Section25 hereof. The tax required to be collected by this Article3and any such tax collected by such retailer shall constitute4a debt owed by the retailer to this State.Retailers shall 5 collect the tax from the taxpayer by adding the tax to the 6 gross charge for the act or privilege of originating or 7 receiving telecommunications in this State, when sold for 8 use, in the manner prescribed by the Department. Whenever 9 possible, the tax imposed by this Article shall, when 10 collected, be stated as a distinct item separate and apart 11 from the gross charge for telecommunications. The tax 12 imposed by this Article shall constitute a debt of the 13 purchaser to the retailer who provides such taxable services 14 until paid, and, if unpaid, is recoverable at law in the same 15 manner as the original charge for such taxable services. 16 (Source: P.A. 86-905.) 17 Section 20. The Uniform Penalty and Interest Act is 18 amended by changing Section 3-7 as follows: 19 (35 ILCS 735/3-7) (from Ch. 120, par. 2603-7) 20 Sec. 3-7. Personal Liability Penalty. 21 (a) Any officer or employee of any taxpayer subject to 22 the provisions of a tax Act administered by the Department 23 who has the control, supervision or responsibility of filing 24 returns and making payment of the amount of any trust tax 25 imposed in accordance with that Act and who wilfully fails to 26 file the return or make the payment to the Department or 27 wilfully attempts in any other manner to evade or defeat the 28 tax shall be personally liable for a penalty equal to the 29 total amount of tax unpaid by the taxpayer including interest 30 and penalties thereon. The Department shall determine a 31 penalty due under this Section according to its best judgment 32 and information, and that determination shall be prima facie SB546 Engrossed -4- LRB9104844PTpk 1 correct and shall be prima facie evidence of a penalty due 2 under this Section. Proof of that determination by the 3 Department shall be made at any hearing before it or in any 4 legal proceeding by reproduced copy or computer printout of 5 the Department's record relating thereto in the name of the 6 Department under the certificate of the Director of Revenue. 7 If reproduced copies of the Department's records are offered 8 as proof of that determination, the Director must certify 9 that those copies are true and exact copies of records on 10 file with the Department. If computer print-outs of the 11 Department's records are offered as proof of such 12 determination, the Director must certify that those computer 13 print-outs are true and exact representations of records 14 properly entered into standard electronic computing 15 equipment, in the regular course of the Department's 16 business, at or reasonably near the time of the occurrence of 17 the facts recorded, from trustworthy and reliable 18 information. That certified reproduced copy or certified 19 computer print-out shall without further proof, be admitted 20 into evidence before the Department or in any legal 21 proceeding and shall be prima facie proof of the correctness 22 of the amount of tax or penalty due. 23 (b) The Department shall issue a notice of penalty 24 liability for the amount claimed by the Department pursuant 25 to this Section. Procedures for protest and review of a 26 notice of penalty liability issued pursuant to this Section 27 and assessment of the penalty due hereunder shall be the same 28 as those prescribed for protest and review of a notice of tax 29 liability or a notice of deficiency, as the case may be, and 30 the assessment of tax liability under the Act imposing that 31 liability. 32 (b-5) Any person filing an action under the 33 Administrative Review Law to review a final assessment or 34 revised final assessment (except a final assessment or SB546 Engrossed -5- LRB9104844PTpk 1 revised final assessment relating to any trust tax imposed in 2 accordance with the Illinois Income Tax Act) issued by the 3 Department under this Section shall, within 20 days after 4 filing the complaint, file a bond with good and sufficient 5 surety or sureties residing in this State or licensed to do 6 business in this State, or instead of bond, obtain an order 7 from the court imposing a lien upon the plaintiff's property 8 as hereinafter provided. If the person filing the complaint 9 fails to comply with this bonding requirement within 20 days 10 after filing the complaint, the Department shall file a 11 motion to dismiss and the court shall dismiss the action 12 unless the person filing the action complies with the bonding 13 requirements set out with this provision within 30 days after 14 the filing of the Department's motion to dismiss. 15 Upon dismissal of a complaint for failure to comply with 16 this subsection, the court shall enter judgment against the 17 taxpayer and in favor of the Department in the amount of the 18 final assessment or revised final assessment, together with 19 any interest that has accrued since the Department issued the 20 final assessment or revised final assessment, and for costs. 21 The judgment is enforceable as other judgments for the 22 payment of money. 23 The amount of the bond shall be fixed and approved by the 24 court, but shall not be less than the amount of the tax and 25 penalty claimed to be due by the Department in its final 26 assessment or revised final assessment to the person filing 27 the bond, plus the amount of interest due from that person to 28 the Department at the time when the Department issued its 29 final assessment or revised final assessment to that person. 30 The bond must be executed in favor of the Department and 31 conditioned on the taxpayer's payment within 30 days after 32 termination of the proceedings for judicial review of the 33 amount of tax, penalty, and interest found by the court to be 34 due in those proceedings. The bond, when filed and approved, SB546 Engrossed -6- LRB9104844PTpk 1 is, from that time until 2 years after termination of the 2 proceedings for judicial review in which the bond is filed, a 3 lien against the real estate situated in the county in which 4 the bond is filed of the person filing the bond and of the 5 surety or sureties on the bond, until the condition of the 6 bond is complied with or until the bond is canceled as 7 provided in this subsection. The lien does not apply, 8 however, to the real property of a corporate surety duly 9 licensed to do business in this State. If the person filing 10 the bond fails to keep its condition, the bond is forfeited, 11 and the Department may institute an action upon the bond in 12 its own name for the entire amount of the bond and costs. An 13 action upon the bond is in addition to any other remedy 14 provided by law. If the person filing the bond complies with 15 its condition or if, in the proceedings for judicial review 16 in which the bond is filed, the court determines that no tax, 17 penalty, or interest is due, the bond shall be canceled by 18 the issuer of the bond. 19 If the court finds in a particular case that the 20 plaintiff cannot furnish a satisfactory surety or sureties 21 for the kind of bond required in this subsection, the court 22 may relieve the plaintiff of the obligation of filing a bond 23 if, upon the timely application of the plaintiff for a lien 24 in place of a bond and accompanying proof, the court is 25 satisfied that a lien would secure the assessment as well as 26 would a bond. Upon that finding, the court shall enter an 27 order subjecting the plaintiff's real and personal property 28 (including subsequently acquired property) situated in the 29 county in which the order is entered to a lien in favor of 30 the Department. The lien shall be for the amount of the tax 31 and penalty claimed to be due by the Department in its final 32 assessment or revised final assessment, plus the amount of 33 interest due from that person to the Department at the time 34 when the Department issued its final assessment or revised SB546 Engrossed -7- LRB9104844PTpk 1 final assessment to that person. The lien shall continue 2 until the court determines in the proceedings for judicial 3 review that no tax, penalty, or interest is due, or until the 4 plaintiff pays to the Department the tax, penalty, and 5 interest secured by the lien. In its discretion, the court 6 may impose a lien regardless of the ratio of the taxpayer's 7 assets to the final assessment or revised final assessment 8 plus the amount of the interest and penalty. This subsection 9 does not give the Department a preference over the rights of 10 a bona fide purchaser, mortgagee, judgment creditor, or other 11 lien holder arising before the entry of the order creating 12 the lien in favor of the Department. "Bona fide", as used in 13 this subsection, does not include a mortgage of real or 14 personal property or other credit transaction that results in 15 the mortgagee or the holder of the security acting as trustee 16 for unsecured creditors of the taxpayer who executed the 17 chattel or real property mortgage or the document evidencing 18 the credit transaction. The lien is inferior to the lien of 19 general taxes, special assessments, and special taxes levied 20 by a political subdivision of this State. The lien is not 21 effective against a purchaser with respect to an item in a 22 retailer's stock in trade purchased from the retailer in the 23 usual course of the retailer's business. The lien may not be 24 enforced against the household effects, wearing apparel, 25 books, or tools or implements of a trade or profession kept 26 for use by any person. The lien is not effective against real 27 property unless and until a certified copy or memorandum of 28 such order is recorded in the Office of the Recorder of Deeds 29 for the county or counties in which the property is located. 30 The lien is not effective against real property whose title 31 is registered under the provisions of the Registered Titles 32 (Torrens) Act until the provisions of Section 85 of that Act 33 are complied with. 34 Service upon the Director of Revenue or the Assistant SB546 Engrossed -8- LRB9104844PTpk 1 Director of Revenue of summons issued in an action to review 2 a final administrative decision of the Department is service 3 upon the Department. The Department shall certify the record 4 of its proceedings if the taxpayer pays to it 75¢ per page of 5 testimony taken before the Department and 25¢ per page of all 6 other matters contained in the record, except that these 7 charges may be waived when the Department is satisfied that 8 the aggrieved party is a poor person who cannot afford to pay 9 the charges. If payment for the record is not made by the 10 taxpayer within 30 days after notice from the Department or 11 the Attorney General of the cost, the court in which the 12 proceeding is pending, on motion of the Department, shall 13 dismiss the complaint and (when the administrative decision 14 as to which the action for judicial review was filed is a 15 final assessment or revised final assessment) shall enter 16 judgment against the taxpayer and in favor of the Department 17 for the amount of tax and penalty shown by the Department's 18 final assessment or revised final assessment to be due, plus 19 interest as provided for in this Act from the date when the 20 liability upon which the interest accrued became delinquent 21 until the entry of the judgment in the action for judicial 22 review under the Administrative Review Law, and also for 23 costs. 24 (c) The personal liability imposed by this Section shall 25 survive the dissolution of a partnership, limited liability 26 company, or corporation. No notice of penalty liability 27 shall be issued after the expiration of 3 years after the 28 date all proceedings in court for the review of any final or 29 revised final assessments issued against a taxpayer which 30 constitute the basis of such penalty liability have 31 terminated or the time for the taking thereof has expired 32 without such proceedings being instituted or after the 33 expiration of 3 years after the date a return is filed with 34 the Department by a taxpayer in cases where the return SB546 Engrossed -9- LRB9104844PTpk 1 constitutes the basis of such liability. Interest shall 2 continue to accrue on that portion of the penalty imposed by 3 this Section which represents the tax unpaid by the taxpayer 4 at the same rate and in the same amount as interest accrues 5 on the tax unpaid by the taxpayer. 6 (d) In addition to any other remedy provided for by the 7 laws of this State, and provided that no hearing or 8 proceeding for review is pending, any Section of a tax Act 9 which provides a means for collection of taxes shall in the 10 same manner and to the same extent provide a means for the 11 collection of the penalty imposed by this Section. The 12 procedures for the filing of an action for collection of the 13 penalty imposed by this Section shall be the same as those 14 prescribed by a tax Act for the filing of an action for 15 collection of the tax assessed under that Act. The time 16 limitation period on the Department's right to bring suit to 17 recover the amount of such tax, or portion thereof, or 18 penalty or interest from such person, or if deceased or 19 incompetent to file a claim thereof against his estate, shall 20 not run during: (1) any period of time in which the order of 21 any Court has the effect of enjoining or restraining the 22 Department from bringing such suit or claim against such 23 person, or (2) any period of time in which the order of the 24 Court has the effect of enjoining or restraining the 25 Department from bringing suit or initiating other proper 26 proceedings for the collection of such amounts from the 27 taxpayer, or (3) any period of time the person departs from 28 and remains out of the State; but the foregoing provisions 29 concerning absence from the State shall not apply to any case 30 in which, at the time when a tax or penalty becomes due under 31 this Act, the person allegedly liable therefor is not a 32 resident of this State. 33 (e) For the purposes of this Section, "officer or 34 employee of any taxpayer" includes a partner of a SB546 Engrossed -10- LRB9104844PTpk 1 partnership, a manager or member of a limited liability 2 corporation, and a member of a registered limited liability 3 partnership. 4 (f) A trust tax is any tax for which an amount is 5 collected or withheld by a taxpayer from another person, and 6 any tax for which an amount is required to be collected or 7 withheld by a taxpayer from another person, regardless of 8 whether it is in fact collected or withheld. 9 (g) The personal liability imposed by this Section is in 10 addition to liability incurred by a partner of a partnership 11 or limited liability partnership resulting from the issuance 12 of a notice of tax liability issued to the partnership or 13 limited liability partnership. 14 (h) In addition to any other basis for imposition of 15 liability under this Act including under subsection (a) of 16 this Section, any person who collects, withholds, or receives 17 a tax, or any amount represented to be a tax, from another 18 person holds the amount so collected or withheld in special 19 trust for the benefit of the Department and is liable to the 20 Department for the amount so withheld or collected plus 21 accrued interest and penalty on that amount. For purposes of 22 this subsection, "person" shall have the same definition as 23 provided in Section 1 of the Retailers' Occupation Tax Act. 24 (Source: P.A. 89-399, eff. 8-20-95; 89-626, eff. 8-9-96; 25 90-458, eff. 8-17-97.) 26 Section 99. Effective date. This Act takes effect upon 27 becoming law.