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91_SB1674eng
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1 AN ACT concerning prepaid telephone calling arrangements.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Use Tax Act is amended by changing
5 Section 3 and by adding Section 3-27 as follows:
6 (35 ILCS 105/3) (from Ch. 120, par. 439.3)
7 Sec. 3. Tax imposed. A tax is imposed upon the privilege
8 of using in this State tangible personal property purchased
9 at retail from a retailer, including computer software, and
10 including photographs, negatives, and positives that are the
11 product of photoprocessing, but not including products of
12 photoprocessing produced for use in motion pictures for
13 commercial exhibition. Beginning January 1, 2001, prepaid
14 telephone calling arrangements shall be considered tangible
15 personal property subject to the tax imposed under this Act
16 regardless of the form in which those arrangements may be
17 embodied, transmitted, or fixed by any method now known or
18 hereafter developed.
19 (Source: P.A. 91-51, eff. 6-30-99.)
20 (35 ILCS 105/3-27 new)
21 Sec. 3-27. Prepaid telephone calling arrangements.
22 "Prepaid telephone calling arrangements" mean the right to
23 exclusively purchase telephone or telecommunications services
24 that must be paid for in advance and enable the origination
25 of one or more intrastate, interstate, or international
26 telephone calls or other telecommunications using an access
27 number, an authorization code, or both, whether manually or
28 electronically dialed, for which payment to a retailer must
29 be made in advance, provided that, unless recharged, no
30 further service is provided once that prepaid amount of
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1 service has been consumed. Prepaid telephone calling
2 arrangements include the recharge of a prepaid calling
3 arrangement. For purposes of this Section, "recharge" means
4 the purchase of additional prepaid telephone or
5 telecommunications services whether or not the purchaser
6 acquires a different access number or authorization code.
7 For purposes of this Section, "telecommunications" means that
8 term as defined in Section 2 of the Telecommunications Excise
9 Tax Act. "Prepaid telephone calling arrangement" does not
10 include an arrangement whereby the service provider reflects
11 the amount of a purchase as a credit on an account for a
12 customer under an existing subscription plan.
13 Section 10. The Service Use Tax Act is amended by
14 changing Section 3 and by adding 3-27 as follows:
15 (35 ILCS 110/3) (from Ch. 120, par. 439.33)
16 Sec. 3. Tax imposed. A tax is imposed upon the
17 privilege of using in this State real or tangible personal
18 property acquired as an incident to the purchase of a service
19 from a serviceman, including computer software, and including
20 photographs, negatives, and positives that are the product of
21 photoprocessing, but not including products of
22 photoprocessing produced for use in motion pictures for
23 public commercial exhibition. Beginning January 1, 2001,
24 prepaid telephone calling arrangements shall be considered
25 tangible personal property subject to the tax imposed under
26 this Act regardless of the form in which those arrangements
27 may be embodied, transmitted, or fixed by any method now
28 known or hereafter developed.
29 (Source: P.A. 91-51, eff. 6-30-99.)
30 (35 ILCS 110/3-27 new)
31 Sec. 3-27. Prepaid telephone calling arrangements.
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1 "Prepaid telephone calling arrangements" mean the right to
2 exclusively purchase telephone or telecommunications services
3 that must be paid for in advance and enable the origination
4 of one or more intrastate, interstate, or international
5 telephone calls or other telecommunications using an access
6 number, an authorization code, or both, whether manually or
7 electronically dialed, for which payment to a retailer must
8 be made in advance, provided that, unless recharged, no
9 further service is provided once that prepaid amount of
10 service has been consumed. Prepaid telephone calling
11 arrangements include the recharge of a prepaid calling
12 arrangement. For purposes of this Section, "recharge" means
13 the purchase of additional prepaid telephone or
14 telecommunications services whether or not the purchaser
15 acquires a different access number or authorization code.
16 For purposes of this Section, "telecommunications" means that
17 term as defined in Section 2 of the Telecommunications Excise
18 Tax Act. "Prepaid telephone calling arrangement" does not
19 include an arrangement whereby the service provider reflects
20 the amount of the purchase as a credit on an account for a
21 customer under an existing subscription plan.
22 Section 15. The Service Occupation Tax Act is amended by
23 changing Section 3 and by adding Section 3-27 as follows:
24 (35 ILCS 115/3) (from Ch. 120, par. 439.103)
25 Sec. 3. Tax imposed. A tax is imposed upon all persons
26 engaged in the business of making sales of service ( referred
27 to as "servicemen") on all tangible personal property
28 transferred as an incident of a sale of service, including
29 computer software, and including photographs, negatives, and
30 positives that are the product of photoprocessing, but not
31 including products of photoprocessing produced for use in
32 motion pictures for public commercial exhibition. Beginning
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1 January 1, 2001, prepaid telephone calling arrangements shall
2 be considered tangible personal property subject to the tax
3 imposed under this Act regardless of the form in which those
4 arrangements may be embodied, transmitted, or fixed by any
5 method now known or hereafter developed.
6 (Source: P.A. 91-51, eff. 6-30-99.)
7 (35 ILCS 115/3-27 new)
8 Sec. 3-27. Prepaid telephone calling arrangements.
9 "Prepaid telephone calling arrangements" mean the right to
10 exclusively purchase telephone or telecommunications services
11 that must be paid for in advance and enable the origination
12 of one or more intrastate, interstate, or international
13 telephone calls or other telecommunications using an access
14 number, an authorization code, or both, whether manually or
15 electronically dialed, for which payment to a retailer must
16 be made in advance, provided that, unless recharged, no
17 further service is provided once that prepaid amount of
18 service has been consumed. Prepaid telephone calling
19 arrangements include the recharge of a prepaid calling
20 arrangement. For purposes of this Section, "recharge" means
21 the purchase of additional prepaid telephone or
22 telecommunications services whether or not the purchaser
23 acquires a different access number or authorization code.
24 For purposes of this Section, "telecommunications" means that
25 term as defined in Section 2 of the Telecommunications Excise
26 Tax Act. "Prepaid telephone calling arrangement" does not
27 include an arrangement whereby the service provider reflects
28 the amount of the purchase as a credit on an account for a
29 customer under an existing subscription plan.
30 Section 20. The Retailers' Occupation Tax Act is amended
31 by changing Section 2 and by adding Section 2-27 as follows:
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1 (35 ILCS 120/2) (from Ch. 120, par. 441)
2 Sec. 2. Tax imposed. A tax is imposed upon persons
3 engaged in the business of selling at retail tangible
4 personal property, including computer software, and including
5 photographs, negatives, and positives that are the product of
6 photoprocessing, but not including products of
7 photoprocessing produced for use in motion pictures for
8 public commercial exhibition. Beginning January 1, 2001,
9 prepaid telephone calling arrangements shall be considered
10 tangible personal property subject to the tax imposed under
11 this Act regardless of the form in which those arrangements
12 may be embodied, transmitted, or fixed by any method now
13 known or hereafter developed.
14 (Source: P.A. 91-51, eff. 6-30-99.)
15 (35 ILCS 120/2-27 new)
16 Sec. 2-27. Prepaid telephone calling arrangements.
17 "Prepaid telephone calling arrangements" mean the right to
18 exclusively purchase telephone or telecommunications services
19 that must be paid for in advance and enable the origination
20 of one or more intrastate, interstate, or international
21 telephone calls or other telecommunications using an access
22 number, an authorization code, or both, whether manually or
23 electronically dialed, for which payment to a retailer must
24 be made in advance, provided that, unless recharged, no
25 further service is provided once that prepaid amount of
26 service has been consumed. Prepaid telephone calling
27 arrangements include the recharge of a prepaid calling
28 arrangement. For purposes of this Section, "recharge" means
29 the purchase of additional prepaid telephone or
30 telecommunications services whether or not the purchaser
31 acquires a different access number or authorization code.
32 For purposes of this Section, "telecommunications" means that
33 term as defined in Section 2 of the Telecommunications Excise
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1 Tax Act. "Prepaid telephone calling arrangement" does not
2 include an arrangement whereby the service provider reflects
3 the amount of the purchase as a credit on an account for a
4 customer under an existing subscription plan.
5 Section 25. The Telecommunications Excise Tax Act is
6 amended by changing Sections 2, 3, 4, and 6 as follows:
7 (35 ILCS 630/2) (from Ch. 120, par. 2002)
8 Sec. 2. As used in this Article, unless the context
9 clearly requires otherwise:
10 (a) "Gross charge" means the amount paid for the act or
11 privilege of originating or receiving telecommunications in
12 this State and for all services and equipment provided in
13 connection therewith by a retailer, valued in money whether
14 paid in money or otherwise, including cash, credits, services
15 and property of every kind or nature, and shall be determined
16 without any deduction on account of the cost of such
17 telecommunications, the cost of materials used, labor or
18 service costs or any other expense whatsoever. In case
19 credit is extended, the amount thereof shall be included only
20 as and when paid. "Gross charges" for private line service
21 shall include charges imposed at each channel point within
22 this State, charges for the channel mileage between each
23 channel point within this State, and charges for that portion
24 of the interstate inter-office channel provided within
25 Illinois. However, "gross charges" shall not include:
26 (1) any amounts added to a purchaser's bill because
27 of a charge made pursuant to (i) the tax imposed by this
28 Article; (ii) charges added to customers' bills pursuant
29 to the provisions of Sections 9-221 or 9-222 of the
30 Public Utilities Act, as amended, or any similar charges
31 added to customers' bills by retailers who are not
32 subject to rate regulation by the Illinois Commerce
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1 Commission for the purpose of recovering any of the tax
2 liabilities or other amounts specified in such provisions
3 of such Act; or (iii) the tax imposed by Section 4251 of
4 the Internal Revenue Code;
5 (2) charges for a sent collect telecommunication
6 received outside of the State;
7 (3) charges for leased time on equipment or charges
8 for the storage of data or information for subsequent
9 retrieval or the processing of data or information
10 intended to change its form or content. Such equipment
11 includes, but is not limited to, the use of calculators,
12 computers, data processing equipment, tabulating
13 equipment or accounting equipment and also includes the
14 usage of computers under a time-sharing agreement;
15 (4) charges for customer equipment, including such
16 equipment that is leased or rented by the customer from
17 any source, wherein such charges are disaggregated and
18 separately identified from other charges;
19 (5) charges to business enterprises certified under
20 Section 9-222.1 of the Public Utilities Act, as amended,
21 to the extent of such exemption and during the period of
22 time specified by the Department of Commerce and
23 Community Affairs;
24 (6) charges for telecommunications and all services
25 and equipment provided in connection therewith between a
26 parent corporation and its wholly owned subsidiaries or
27 between wholly owned subsidiaries when the tax imposed
28 under this Article has already been paid to a retailer
29 and only to the extent that the charges between the
30 parent corporation and wholly owned subsidiaries or
31 between wholly owned subsidiaries represent expense
32 allocation between the corporations and not the
33 generation of profit for the corporation rendering such
34 service;
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1 (7) bad debts. Bad debt means any portion of a debt
2 that is related to a sale at retail for which gross
3 charges are not otherwise deductible or excludable that
4 has become worthless or uncollectable, as determined
5 under applicable federal income tax standards. If the
6 portion of the debt deemed to be bad is subsequently
7 paid, the retailer shall report and pay the tax on that
8 portion during the reporting period in which the payment
9 is made;
10 (8) charges paid by inserting coins in
11 coin-operated telecommunication devices;
12 (9) amounts paid by telecommunications retailers
13 under the Telecommunications Municipal Infrastructure
14 Maintenance Fee Act.
15 (b) "Amount paid" means the amount charged to the
16 taxpayer's service address in this State regardless of where
17 such amount is billed or paid.
18 (c) "Telecommunications", in addition to the meaning
19 ordinarily and popularly ascribed to it, includes, without
20 limitation, messages or information transmitted through use
21 of local, toll and wide area telephone service; private line
22 services; channel services; telegraph services;
23 teletypewriter; computer exchange services; cellular mobile
24 telecommunications service; specialized mobile radio;
25 stationary two way radio; paging service; or any other form
26 of mobile and portable one-way or two-way communications; or
27 any other transmission of messages or information by
28 electronic or similar means, between or among points by wire,
29 cable, fiber-optics, laser, microwave, radio, satellite or
30 similar facilities. As used in this Act, "private line" means
31 a dedicated non-traffic sensitive service for a single
32 customer, that entitles the customer to exclusive or priority
33 use of a communications channel or group of channels, from
34 one or more specified locations to one or more other
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1 specified locations. The definition of "telecommunications"
2 shall not include value added services in which computer
3 processing applications are used to act on the form, content,
4 code and protocol of the information for purposes other than
5 transmission. "Telecommunications" shall not include
6 purchases of telecommunications by a telecommunications
7 service provider for use as a component part of the service
8 provided by him to the ultimate retail consumer who
9 originates or terminates the taxable end-to-end
10 communications. Carrier access charges, right of access
11 charges, charges for use of inter-company facilities, and all
12 telecommunications resold in the subsequent provision of,
13 used as a component of, or integrated into end-to-end
14 telecommunications service shall be non-taxable as sales for
15 resale.
16 (d) "Interstate telecommunications" means all
17 telecommunications that either originate or terminate outside
18 this State.
19 (e) "Intrastate telecommunications" means all
20 telecommunications that originate and terminate within this
21 State.
22 (f) "Department" means the Department of Revenue of the
23 State of Illinois.
24 (g) "Director" means the Director of Revenue for the
25 Department of Revenue of the State of Illinois.
26 (h) "Taxpayer" means a person who individually or
27 through his agents, employees or permittees engages in the
28 act or privilege of originating or receiving
29 telecommunications in this State and who incurs a tax
30 liability under this Article.
31 (i) "Person" means any natural individual, firm, trust,
32 estate, partnership, association, joint stock company, joint
33 venture, corporation, limited liability company, or a
34 receiver, trustee, guardian or other representative appointed
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1 by order of any court, the Federal and State governments,
2 including State universities created by statute or any city,
3 town, county or other political subdivision of this State.
4 (j) "Purchase at retail" means the acquisition,
5 consumption or use of telecommunication through a sale at
6 retail.
7 (k) "Sale at retail" means the transmitting, supplying
8 or furnishing of telecommunications and all services and
9 equipment provided in connection therewith for a
10 consideration to persons other than the Federal and State
11 governments, and State universities created by statute and
12 other than between a parent corporation and its wholly owned
13 subsidiaries or between wholly owned subsidiaries for their
14 use or consumption and not for resale.
15 (l) "Retailer" means and includes every person engaged
16 in the business of making sales at retail as defined in this
17 Article. The Department may, in its discretion, upon
18 application, authorize the collection of the tax hereby
19 imposed by any retailer not maintaining a place of business
20 within this State, who, to the satisfaction of the
21 Department, furnishes adequate security to insure collection
22 and payment of the tax. Such retailer shall be issued,
23 without charge, a permit to collect such tax. When so
24 authorized, it shall be the duty of such retailer to collect
25 the tax upon all of the gross charges for telecommunications
26 in this State in the same manner and subject to the same
27 requirements as a retailer maintaining a place of business
28 within this State. The permit may be revoked by the
29 Department at its discretion.
30 (m) "Retailer maintaining a place of business in this
31 State", or any like term, means and includes any retailer
32 having or maintaining within this State, directly or by a
33 subsidiary, an office, distribution facilities, transmission
34 facilities, sales office, warehouse or other place of
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1 business, or any agent or other representative operating
2 within this State under the authority of the retailer or its
3 subsidiary, irrespective of whether such place of business or
4 agent or other representative is located here permanently or
5 temporarily, or whether such retailer or subsidiary is
6 licensed to do business in this State.
7 (n) "Service address" means the location of
8 telecommunications equipment from which the
9 telecommunications services are originated or at which
10 telecommunications services are received by a taxpayer. In
11 the event this may not be a defined location, as in the case
12 of mobile phones, paging systems, maritime systems,
13 air-to-ground systems and the like, service address shall
14 mean the location of a taxpayer's primary use of the
15 telecommunications equipment as defined by telephone number,
16 authorization code, or location in Illinois where bills are
17 sent.
18 (o) "Prepaid telephone calling arrangements" mean the
19 right to exclusively purchase telephone or telecommunications
20 services that must be paid for in advance and enable the
21 origination of one or more intrastate, interstate, or
22 international telephone calls or other telecommunications
23 using an access number, an authorization code, or both,
24 whether manually or electronically dialed, for which payment
25 to a retailer must be made in advance, provided that, unless
26 recharged, no further service is provided once that prepaid
27 amount of service has been consumed. Prepaid telephone
28 calling arrangements include the recharge of a prepaid
29 calling arrangement. For purposes of this subsection,
30 "recharge" means the purchase of additional prepaid telephone
31 or telecommunications services whether or not the purchaser
32 acquires a different access number or authorization code.
33 "Prepaid telephone calling arrangement" does not include an
34 arrangement whereby a customer purchases a payment card and
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1 pursuant to which the service provider reflects the amount of
2 such purchase as a credit on an invoice issued to that
3 customer under an existing subscription plan.
4 (Source: P.A. 90-562, eff. 12-16-97.)
5 (35 ILCS 630/3) (from Ch. 120, par. 2003)
6 Sec. 3. Until December 31, 1997, a tax is imposed upon
7 the act or privilege of originating or receiving intrastate
8 telecommunications by a person in this State at the rate of
9 5% of the gross charge for such telecommunications purchased
10 at retail from a retailer by such person. Beginning January
11 1, 1998, a tax is imposed upon the act or privilege of
12 originating in this State or receiving in this State
13 intrastate telecommunications by a person in this State at
14 the rate of 7% of the gross charge for such
15 telecommunications purchased at retail from a retailer by
16 such person. However, such tax is not imposed on the act or
17 privilege to the extent such act or privilege may not, under
18 the Constitution and statutes of the United States, be made
19 the subject of taxation by the State. Beginning January 1,
20 2001, prepaid telephone calling arrangements shall not be
21 considered telecommunications subject to the tax imposed
22 under this Act.
23 (Source: P.A. 90-548, eff. 12-4-97.)
24 (35 ILCS 630/4) (from Ch. 120, par. 2004)
25 Sec. 4. Until December 31, 1997, a tax is imposed upon
26 the act or privilege of originating in this State or
27 receiving in this State interstate telecommunications by a
28 person in this State at the rate of 5% of the gross charge
29 for such telecommunications purchased at retail from a
30 retailer by such person. Beginning January 1, 1998, a tax is
31 imposed upon the act or privilege of originating in this
32 State or receiving in this State interstate
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1 telecommunications by a person in this State at the rate of
2 7% of the gross charge for such telecommunications purchased
3 at retail from a retailer by such person. To prevent actual
4 multi-state taxation of the act or privilege that is subject
5 to taxation under this paragraph, any taxpayer, upon proof
6 that that taxpayer has paid a tax in another state on such
7 event, shall be allowed a credit against the tax imposed in
8 this Section 4 to the extent of the amount of such tax
9 properly due and paid in such other state. However, such tax
10 is not imposed on the act or privilege to the extent such act
11 or privilege may not, under the Constitution and statutes of
12 the United States, be made the subject of taxation by the
13 State. Beginning on January 1, 2001, prepaid telephone
14 calling arrangements shall not be considered
15 telecommunications subject to the tax imposed under this Act.
16 (Source: P.A. 90-548, eff. 12-4-97.)
17 (35 ILCS 630/6) (from Ch. 120, par. 2006)
18 Sec. 6. Except as provided hereinafter in this Section,
19 on or before the 15th day of each month each retailer
20 maintaining a place of business in this State shall make a
21 return to the Department for the preceding calendar month,
22 stating:
23 1. His name;
24 2. The address of his principal place of business,
25 and the address of the principal place of business (if
26 that is a different address) from which he engages in the
27 business of transmitting telecommunications;
28 3. Total amount of gross charges billed by him
29 during the preceding calendar month for providing
30 telecommunications during such calendar month;
31 4. Total amount received by him during the
32 preceding calendar month on credit extended;
33 5. Deductions allowed by law;
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1 6. Gross charges which were billed by him during
2 the preceding calendar month and upon the basis of which
3 the tax is imposed;
4 7. Amount of tax (computed upon Item 6);
5 8. Such other reasonable information as the
6 Department may require.
7 Any taxpayer required to make payments under this Section
8 may make the payments by electronic funds transfer. The
9 Department shall adopt rules necessary to effectuate a
10 program of electronic funds transfer.
11 If the retailer's average monthly tax billings due to the
12 Department do not exceed $200, the Department may authorize
13 his returns to be filed on a quarter annual basis, with the
14 return for January, February and March of a given year being
15 due by April 15 of such year; with the return for April, May
16 and June of a given year being due by July 15 of such year;
17 with the return for July, August and September of a given
18 year being due by October 15 of such year; and with the
19 return of October, November and December of a given year
20 being due by January 15 of the following year.
21 If the retailer is otherwise required to file a monthly
22 or quarterly return and if the retailer's average monthly tax
23 billings due to the Department do not exceed $50, the
24 Department may authorize his or her return to be filed on an
25 annual basis, with the return for a given year being due by
26 January 15th of the following year.
27 Notwithstanding any other provision of this Article
28 containing the time within which a retailer may file his
29 return, in the case of any retailer who ceases to engage in a
30 kind of business which makes him responsible for filing
31 returns under this Article, such retailer shall file a final
32 return under this Article with the Department not more than
33 one month after discontinuing such business.
34 In making such return, the retailer shall determine the
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1 value of any consideration other than money received by him
2 and he shall include such value in his return. Such
3 determination shall be subject to review and revision by the
4 Department in the manner hereinafter provided for the
5 correction of returns.
6 Each retailer whose average monthly liability to the
7 Department under this Article was $10,000 or more during the
8 preceding calendar year, excluding the month of highest
9 liability and the month of lowest liability in such calendar
10 year, and who is not operated by a unit of local government,
11 shall make estimated payments to the Department on or before
12 the 7th, 15th, 22nd and last day of the month during which
13 tax collection liability to the Department is incurred in an
14 amount not less than the lower of either 22.5% of the
15 retailer's actual tax collections for the month or 25% of the
16 retailer's actual tax collections for the same calendar month
17 of the preceding year. The amount of such quarter monthly
18 payments shall be credited against the final liability of the
19 retailer's return for that month. Any outstanding credit,
20 approved by the Department, arising from the retailer's
21 overpayment of its final liability for any month may be
22 applied to reduce the amount of any subsequent quarter
23 monthly payment or credited against the final liability of
24 the retailer's return for any subsequent month. If any
25 quarter monthly payment is not paid at the time or in the
26 amount required by this Section, the retailer shall be liable
27 for penalty and interest on the difference between the
28 minimum amount due as a payment and the amount of such
29 payment actually and timely paid, except insofar as the
30 retailer has previously made payments for that month to the
31 Department in excess of the minimum payments previously due.
32 If the Director finds that the information required for
33 the making of an accurate return cannot reasonably be
34 compiled by a retailer within 15 days after the close of the
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1 calendar month for which a return is to be made, he may grant
2 an extension of time for the filing of such return for a
3 period of not to exceed 31 calendar days. The granting of
4 such an extension may be conditioned upon the deposit by the
5 retailer with the Department of an amount of money not
6 exceeding the amount estimated by the Director to be due with
7 the return so extended. All such deposits, including any
8 heretofore made with the Department, shall be credited
9 against the retailer's liabilities under this Article. If
10 any such deposit exceeds the retailer's present and probable
11 future liabilities under this Article, the Department shall
12 issue to the retailer a credit memorandum, which may be
13 assigned by the retailer to a similar retailer under this
14 Article, in accordance with reasonable rules and regulations
15 to be prescribed by the Department.
16 The retailer making the return herein provided for shall,
17 at the time of making such return, pay to the Department the
18 amount of tax herein imposed. On and after the effective date
19 of this Article of 1985, $1,000,000 of the moneys received by
20 the Department of Revenue pursuant to this Article shall be
21 paid each month into the Common School Fund and the remainder
22 into the General Revenue Fund. On and after February 1, 1998,
23 however, of the moneys received by the Department of Revenue
24 pursuant to the additional taxes imposed by this amendatory
25 Act of 1997 one-half shall be deposited into the School
26 Infrastructure Fund and one-half shall be deposited into the
27 Common School Fund. On and after the effective date of this
28 amendatory Act of the 91st General Assembly, if in any fiscal
29 year the total of the moneys deposited into the School
30 Infrastructure Fund under this Act is less than the total of
31 the moneys deposited into that Fund from the additional taxes
32 imposed by Public Act 90-548 during fiscal year 1999, then,
33 as soon as possible after the close of the fiscal year, the
34 Comptroller shall order transferred and the Treasurer shall
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1 transfer from the General Revenue Fund to the School
2 Infrastructure Fund an amount equal to the difference between
3 the fiscal year total deposits and the total amount deposited
4 into the Fund in fiscal year 1999.
5 (Source: P.A. 90-16, eff. 6-16-97; 90-548, eff. 12-4-97;
6 91-541, eff. 8-13-99.)
7 Section 30. The Telecommunications Municipal
8 Infrastructure Maintenance Fee Act is amended by changing
9 Sections 10 and 20 as follows:
10 (35 ILCS 635/10)
11 Sec. 10. Definitions.
12 (a) "Gross charges" means the amount paid to a
13 telecommunications retailer for the act or privilege of
14 originating or receiving telecommunications in this State or
15 the municipality imposing the fee under this Act, as the
16 context requires, and for all services rendered in connection
17 therewith, valued in money whether paid in money or
18 otherwise, including cash, credits, services, and property of
19 every kind or nature, and shall be determined without any
20 deduction on account of the cost of such telecommunications,
21 the cost of the materials used, labor or service costs, or
22 any other expense whatsoever. In case credit is extended,
23 the amount thereof shall be included only as and when paid.
24 "Gross charges" for private line service shall include
25 charges imposed at each channel point within this State or
26 the municipality imposing the fee under this Act, charges for
27 the channel mileage between each channel point within this
28 State or the municipality imposing the fee under this Act,
29 and charges for that portion of the interstate inter-office
30 channel provided within Illinois or the municipality imposing
31 the fee under this Act. However, "gross charges" shall not
32 include:
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1 (1) any amounts added to a purchaser's bill because
2 of a charge made under: (i) the fee imposed by this
3 Section, (ii) additional charges added to a purchaser's
4 bill under Section 9-221 or 9-222 of the Public Utilities
5 Act, (iii) amounts collected under Section 8-11-17 of the
6 Illinois Municipal Code, (iv) the tax imposed by the
7 Telecommunications Excise Tax Act, (v) 911 surcharges, or
8 (vi) the tax imposed by Section 4251 of the Internal
9 Revenue Code;
10 (2) charges for a sent collect telecommunication
11 received outside of this State or the municipality
12 imposing the fee, as the context requires;
13 (3) charges for leased time on equipment or charges
14 for the storage of data or information or subsequent
15 retrieval or the processing of data or information
16 intended to change its form or content. Such equipment
17 includes, but is not limited to, the use of calculators,
18 computers, data processing equipment, tabulating
19 equipment, or accounting equipment and also includes the
20 usage of computers under a time-sharing agreement.
21 (4) charges for customer equipment, including such
22 equipment that is leased or rented by the customer from
23 any source, wherein such charges are disaggregated and
24 separately identified from other charges;
25 (5) charges to business enterprises certified under
26 Section 9-222.1 of the Public Utilities Act to the extent
27 of such exemption and during the period of time specified
28 by the Department of Commerce and Community Affairs or by
29 the municipality imposing the fee under the Act, as the
30 context requires;
31 (6) charges for telecommunications and all services
32 and equipment provided in connection therewith between a
33 parent corporation and its wholly owned subsidiaries or
34 between wholly owned subsidiaries, and only to the extent
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1 that the charges between the parent corporation and
2 wholly owned subsidiaries or between wholly owned
3 subsidiaries represent expense allocation between the
4 corporations and not the generation of profit other than
5 a regulatory required profit for the corporation
6 rendering such services;
7 (7) bad debts ("bad debt" means any portion of a
8 debt that is related to a sale at retail for which gross
9 charges are not otherwise deductible or excludable that
10 has become worthless or uncollectible, as determined
11 under applicable federal income tax standards; if the
12 portion of the debt deemed to be bad is subsequently
13 paid, the retailer shall report and pay the tax on that
14 portion during the reporting period in which the payment
15 is made);
16 (8) charges paid by inserting coins in
17 coin-operated telecommunication devices; or
18 (9) charges for telecommunications and all services
19 and equipment provided to a municipality imposing the
20 infrastructure maintenance fee.
21 (a-5) "Department" means the Illinois Department of
22 Revenue.
23 (b) "Telecommunications" includes, but is not limited
24 to, messages or information transmitted through use of local,
25 toll, and wide area telephone service, channel services,
26 telegraph services, teletypewriter service, computer exchange
27 services, private line services, specialized mobile radio
28 services, or any other transmission of messages or
29 information by electronic or similar means, between or among
30 points by wire, cable, fiber optics, laser, microwave, radio,
31 satellite, or similar facilities. Unless the context clearly
32 requires otherwise, "telecommunications" shall also include
33 wireless telecommunications as hereinafter defined.
34 "Telecommunications" shall not include value added services
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1 in which computer processing applications are used to act on
2 the form, content, code, and protocol of the information for
3 purposes other than transmission. "Telecommunications" shall
4 not include purchase of telecommunications by a
5 telecommunications service provider for use as a component
6 part of the service provided by him or her to the ultimate
7 retail consumer who originates or terminates the end-to-end
8 communications. Retailer access charges, right of access
9 charges, charges for use of intercompany facilities, and all
10 telecommunications resold in the subsequent provision and
11 used as a component of, or integrated into, end-to-end
12 telecommunications service shall not be included in gross
13 charges as sales for resale. "Telecommunications" shall not
14 include the provision of cable services through a cable
15 system as defined in the Cable Communications Act of 1984 (47
16 U.S.C. Sections 521 and following) as now or hereafter
17 amended or through an open video system as defined in the
18 Rules of the Federal Communications Commission (47 C.D.F.
19 76.1550 and following) as now or hereafter amended. Beginning
20 January 1, 2001, prepaid telephone calling arrangements shall
21 not be considered "telecommunications" subject to the tax
22 imposed under this Act. For purposes of this Section,
23 "prepaid telephone calling arrangements" means that term as
24 defined in Section 2-27 of the Retailers' Occupation Tax Act.
25 (c) "Wireless telecommunications" includes cellular
26 mobile telephone services, personal wireless services as
27 defined in Section 704(C) of the Telecommunications Act of
28 1996 (Public Law No. 104-104) as now or hereafter amended,
29 including all commercial mobile radio services, and paging
30 services.
31 (d) "Telecommunications retailer" or "retailer" or
32 "carrier" means and includes every person engaged in the
33 business of making sales of telecommunications at retail as
34 defined in this Section. The Illinois Department of Revenue
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1 or the municipality imposing the fee, as the case may be,
2 may, in its discretion, upon applications, authorize the
3 collection of the fee hereby imposed by any retailer not
4 maintaining a place of business within this State, who, to
5 the satisfaction of the Department or municipality, furnishes
6 adequate security to insure collection and payment of the
7 fee. When so authorized, it shall be the duty of such
8 retailer to pay the fee upon all of the gross charges for
9 telecommunications in the same manner and subject to the same
10 requirements as a retailer maintaining a place of business
11 within the State or municipality imposing the fee.
12 (e) "Retailer maintaining a place of business in this
13 State", or any like term, means and includes any retailer
14 having or maintaining within this State, directly or by a
15 subsidiary, an office, distribution facilities, transmission
16 facilities, sales office, warehouse, or other place of
17 business, or any agent or other representative operating
18 within this State under the authority of the retailer or its
19 subsidiary, irrespective of whether such place of business or
20 agent or other representative is located here permanently or
21 temporarily, or whether such retailer or subsidiary is
22 licensed to do business in this State.
23 (f) "Sale of telecommunications at retail" means the
24 transmitting, supplying, or furnishing of telecommunications
25 and all services rendered in connection therewith for a
26 consideration, other than between a parent corporation and
27 its wholly owned subsidiaries or between wholly owned
28 subsidiaries, when the gross charge made by one such
29 corporation to another such corporation is not greater than
30 the gross charge paid to the retailer for their use or
31 consumption and not for sale.
32 (g) "Service address" means the location of
33 telecommunications equipment from which telecommunications
34 services are originated or at which telecommunications
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1 services are received. If this is not a defined location, as
2 in the case of wireless telecommunications, paging systems,
3 maritime systems, air-to-ground systems, and the like,
4 "service address" shall mean the location of the customer's
5 primary use of the telecommunications equipment as defined by
6 the location in Illinois where bills are sent.
7 (Source: P.A. 90-154, eff. 1-1-98; 90-562, eff. 12-16-97.)
8 (35 ILCS 635/20)
9 Sec. 20. Municipal telecommunications infrastructure
10 maintenance fee.
11 (a) A municipality may impose a municipal infrastructure
12 maintenance fee upon telecommunications retailers in an
13 amount specified in subsection (b). On and after the
14 effective date of this amendatory Act of 1997, a certified
15 copy of an ordinance or resolution imposing a fee under this
16 Section shall be filed with the Department within 30 days
17 after the effective date of this amendatory Act or the
18 effective date of the ordinance or resolution imposing such
19 fee, whichever is later. Failure to file a certified copy of
20 the ordinance or resolution imposing a fee under this Section
21 shall have no effect on the validity of the ordinance or
22 resolution. The Department shall create and maintain a list
23 of all ordinances and resolutions filed pursuant to this
24 Section and make that list, as well as copies of the
25 ordinances and resolutions, available to the public for a
26 reasonable fee.
27 (b) The amount of the municipal infrastructure
28 maintenance fee imposed upon a telecommunications retailer
29 under this Section shall not exceed: (i) in a municipality
30 with a population of more than 500,000, 2.0% of all gross
31 charges charged by the telecommunications retailer to service
32 addresses in the municipality for telecommunications
33 originating or received in the municipality; and (ii) in a
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1 municipality with a population of 500,000 or less, 1.0% of
2 all gross charges charged by the telecommunications retailer
3 to service addresses in the municipality for
4 telecommunications originating or received in the
5 municipality. If imposed, the municipal telecommunications
6 infrastructure fee must be in 1/4% increments. However, the
7 fee shall not be imposed in any case in which the imposition
8 of the fee would violate the Constitution or statutes of the
9 United States.
10 (c) The municipal telecommunications infrastructure fee
11 authorized by this Section shall be collected, enforced, and
12 administered as set forth in subsection (c) of Section 25 of
13 this Act.
14 (d) A municipality with a population of more than
15 500,000 that imposes a municipal infrastructure maintenance
16 fee under this Section may, by ordinance, exempt from the fee
17 all charges for the inbound toll-free telecommunications
18 service commonly known as "800", "877", or "888" or for a
19 similar service.
20 (Source: P.A. 90-154, eff. 1-1-98; 90-562, eff. 12-16-97.)
21 Section 35. The Illinois Municipal Code is amended by
22 changing Sections 8-11-2 and 8-11-17 as follows:
23 (65 ILCS 5/8-11-2) (from Ch. 24, par. 8-11-2)
24 Sec. 8-11-2. The corporate authorities of any
25 municipality may tax any or all of the following occupations
26 or privileges:
27 1. Persons engaged in the business of transmitting
28 messages by means of electricity or radio magnetic waves,
29 or fiber optics, at a rate not to exceed 5% of the gross
30 receipts from that business originating within the
31 corporate limits of the municipality. Beginning January
32 1, 2001, prepaid telephone calling arrangements shall not
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1 be subject to the tax imposed under this Section. For
2 purposes of this Section, "prepaid telephone calling
3 arrangements" means that term as defined in Section 2-27
4 of the Retailers' Occupation Tax Act.
5 2. Persons engaged in the business of distributing,
6 supplying, furnishing, or selling gas for use or
7 consumption within the corporate limits of a municipality
8 of 500,000 or fewer population, and not for resale, at a
9 rate not to exceed 5% of the gross receipts therefrom.
10 2a. Persons engaged in the business of
11 distributing, supplying, furnishing, or selling gas for
12 use or consumption within the corporate limits of a
13 municipality of over 500,000 population, and not for
14 resale, at a rate not to exceed 8% of the gross receipts
15 therefrom. If imposed, this tax shall be paid in monthly
16 payments.
17 3. The privilege of using or consuming electricity
18 acquired in a purchase at retail and used or consumed
19 within the corporate limits of the municipality at rates
20 not to exceed the following maximum rates, calculated on
21 a monthly basis for each purchaser:
22 (i) For the first 2,000 kilowatt-hours used or
23 consumed in a month; 0.61 cents per kilowatt-hour;
24 (ii) For the next 48,000 kilowatt-hours used or
25 consumed in a month; 0.40 cents per kilowatt-hour;
26 (iii) For the next 50,000 kilowatt-hours used or
27 consumed in a month; 0.36 cents per kilowatt-hour;
28 (iv) For the next 400,000 kilowatt-hours used or
29 consumed in a month; 0.35 cents per kilowatt-hour;
30 (v) For the next 500,000 kilowatt-hours used or
31 consumed in a month; 0.34 cents per kilowatt-hour;
32 (vi) For the next 2,000,000 kilowatt-hours used or
33 consumed in a month; 0.32 cents per kilowatt-hour;
34 (vii) For the next 2,000,000 kilowatt-hours used or
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1 consumed in a month; 0.315 cents per kilowatt-hour;
2 (viii) For the next 5,000,000 kilowatt-hours used
3 or consumed in a month; 0.31 cents per kilowatt-hour;
4 (ix) For the next 10,000,000 kilowatt-hours used or
5 consumed in a month; 0.305 cents per kilowatt-hour; and
6 (x) For all electricity used or consumed in excess
7 of 20,000,000 kilowatt-hours in a month, 0.30 cents per
8 kilowatt-hour.
9 If a municipality imposes a tax at rates lower than
10 either the maximum rates specified in this Section or the
11 alternative maximum rates promulgated by the Illinois
12 Commerce Commission, as provided below, the tax rates
13 shall be imposed upon the kilowatt hour categories set
14 forth above with the same proportional relationship as
15 that which exists among such maximum rates.
16 Notwithstanding the foregoing, until December 31, 2008,
17 no municipality shall establish rates that are in excess
18 of rates reasonably calculated to produce revenues that
19 equal the maximum total revenues such municipality could
20 have received under the tax authorized by this
21 subparagraph in the last full calendar year prior to the
22 effective date of Section 65 of this amendatory Act of
23 1997; provided that this shall not be a limitation on the
24 amount of tax revenues actually collected by such
25 municipality.
26 Upon the request of the corporate authorities of a
27 municipality, the Illinois Commerce Commission shall,
28 within 90 days after receipt of such request, promulgate
29 alternative rates for each of these kilowatt-hour
30 categories that will reflect, as closely as reasonably
31 practical for that municipality, the distribution of the
32 tax among classes of purchasers as if the tax were based
33 on a uniform percentage of the purchase price of
34 electricity. A municipality that has adopted an
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1 ordinance imposing a tax pursuant to subparagraph 3 as it
2 existed prior to the effective date of Section 65 of this
3 amendatory Act of 1997 may, rather than imposing the tax
4 permitted by this amendatory Act of 1997, continue to
5 impose the tax pursuant to that ordinance with respect to
6 gross receipts received from residential customers
7 through July 31, 1999, and with respect to gross receipts
8 from any non-residential customer until the first bill
9 issued to such customer for delivery services in
10 accordance with Section 16-104 of the Public Utilities
11 Act but in no case later than the last bill issued to
12 such customer before December 31, 2000. No ordinance
13 imposing the tax permitted by this amendatory Act of 1997
14 shall be applicable to any non-residential customer until
15 the first bill issued to such customer for delivery
16 services in accordance with Section 16-104 of the Public
17 Utilities Act but in no case later than the last bill
18 issued to such non-residential customer before December
19 31, 2000.
20 4. Persons engaged in the business of distributing,
21 supplying, furnishing, or selling water for use or
22 consumption within the corporate limits of the
23 municipality, and not for resale, at a rate not to exceed
24 5% of the gross receipts therefrom.
25 None of the taxes authorized by this Section may be
26 imposed with respect to any transaction in interstate
27 commerce or otherwise to the extent to which the business or
28 privilege may not, under the constitution and statutes of the
29 United States, be made the subject of taxation by this State
30 or any political sub-division thereof; nor shall any persons
31 engaged in the business of distributing, supplying,
32 furnishing, selling or transmitting gas, water, or
33 electricity, or engaged in the business of transmitting
34 messages, or using or consuming electricity acquired in a
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1 purchase at retail, be subject to taxation under the
2 provisions of this Section for those transactions that are or
3 may become subject to taxation under the provisions of the
4 "Municipal Retailers' Occupation Tax Act" authorized by
5 Section 8-11-1; nor shall any tax authorized by this Section
6 be imposed upon any person engaged in a business or on any
7 privilege unless the tax is imposed in like manner and at the
8 same rate upon all persons engaged in businesses of the same
9 class in the municipality, whether privately or municipally
10 owned or operated, or exercising the same privilege within
11 the municipality.
12 Any of the taxes enumerated in this Section may be in
13 addition to the payment of money, or value of products or
14 services furnished to the municipality by the taxpayer as
15 compensation for the use of its streets, alleys, or other
16 public places, or installation and maintenance therein,
17 thereon or thereunder of poles, wires, pipes or other
18 equipment used in the operation of the taxpayer's business.
19 (a) If the corporate authorities of any home rule
20 municipality have adopted an ordinance that imposed a tax on
21 public utility customers, between July 1, 1971, and October
22 1, 1981, on the good faith belief that they were exercising
23 authority pursuant to Section 6 of Article VII of the 1970
24 Illinois Constitution, that action of the corporate
25 authorities shall be declared legal and valid,
26 notwithstanding a later decision of a judicial tribunal
27 declaring the ordinance invalid. No municipality shall be
28 required to rebate, refund, or issue credits for any taxes
29 described in this paragraph, and those taxes shall be deemed
30 to have been levied and collected in accordance with the
31 Constitution and laws of this State.
32 (b) In any case in which (i) prior to October 19, 1979,
33 the corporate authorities of any municipality have adopted an
34 ordinance imposing a tax authorized by this Section (or by
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1 the predecessor provision of the "Revised Cities and Villages
2 Act") and have explicitly or in practice interpreted gross
3 receipts to include either charges added to customers' bills
4 pursuant to the provision of paragraph (a) of Section 36 of
5 the Public Utilities Act or charges added to customers' bills
6 by taxpayers who are not subject to rate regulation by the
7 Illinois Commerce Commission for the purpose of recovering
8 any of the tax liabilities or other amounts specified in such
9 paragraph (a) of Section 36 of that Act, and (ii) on or after
10 October 19, 1979, a judicial tribunal has construed gross
11 receipts to exclude all or part of those charges, then
12 neither those municipality nor any taxpayer who paid the tax
13 shall be required to rebate, refund, or issue credits for any
14 tax imposed or charge collected from customers pursuant to
15 the municipality's interpretation prior to October 19, 1979.
16 This paragraph reflects a legislative finding that it would
17 be contrary to the public interest to require a municipality
18 or its taxpayers to refund taxes or charges attributable to
19 the municipality's more inclusive interpretation of gross
20 receipts prior to October 19, 1979, and is not intended to
21 prescribe or limit judicial construction of this Section. The
22 legislative finding set forth in this subsection does not
23 apply to taxes imposed after the effective date of this
24 amendatory Act of 1995.
25 (c) The tax authorized by subparagraph 3 shall be
26 collected from the purchaser by the person maintaining a
27 place of business in this State who delivers the electricity
28 to the purchaser. This tax shall constitute a debt of the
29 purchaser to the person who delivers the electricity to the
30 purchaser and if unpaid, is recoverable in the same manner as
31 the original charge for delivering the electricity. Any tax
32 required to be collected pursuant to an ordinance authorized
33 by subparagraph 3 and any such tax collected by a person
34 delivering electricity shall constitute a debt owed to the
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1 municipality by such person delivering the electricity,
2 provided, that the person delivering electricity shall be
3 allowed credit for such tax related to deliveries of
4 electricity the charges for which are written off as
5 uncollectible, and provided further, that if such charges are
6 thereafter collected, the delivering supplier shall be
7 obligated to remit such tax. For purposes of this subsection
8 (c), any partial payment not specifically identified by the
9 purchaser shall be deemed to be for the delivery of
10 electricity. Persons delivering electricity shall collect the
11 tax from the purchaser by adding such tax to the gross charge
12 for delivering the electricity, in the manner prescribed by
13 the municipality. Persons delivering electricity shall also
14 be authorized to add to such gross charge an amount equal to
15 3% of the tax to reimburse the person delivering electricity
16 for the expenses incurred in keeping records, billing
17 customers, preparing and filing returns, remitting the tax
18 and supplying data to the municipality upon request. If the
19 person delivering electricity fails to collect the tax from
20 the purchaser, then the purchaser shall be required to pay
21 the tax directly to the municipality in the manner prescribed
22 by the municipality. Persons delivering electricity who file
23 returns pursuant to this paragraph (c) shall, at the time of
24 filing such return, pay the municipality the amount of the
25 tax collected pursuant to subparagraph 3.
26 (d) For the purpose of the taxes enumerated in this
27 Section:
28 "Gross receipts" means the consideration received for the
29 transmission of messages, the consideration received for
30 distributing, supplying, furnishing or selling gas for use or
31 consumption and not for resale, and the consideration
32 received for distributing, supplying, furnishing or selling
33 water for use or consumption and not for resale, and for all
34 services rendered in connection therewith valued in money,
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1 whether received in money or otherwise, including cash,
2 credit, services and property of every kind and material and
3 for all services rendered therewith, and shall be determined
4 without any deduction on account of the cost of transmitting
5 such messages, without any deduction on account of the cost
6 of the service, product or commodity supplied, the cost of
7 materials used, labor or service cost, or any other expenses
8 whatsoever. "Gross receipts" shall not include that portion
9 of the consideration received for distributing, supplying,
10 furnishing, or selling gas or water to, or for the
11 transmission of messages for, business enterprises described
12 in paragraph (e) of this Section to the extent and during the
13 period in which the exemption authorized by paragraph (e) is
14 in effect or for school districts or units of local
15 government described in paragraph (f) during the period in
16 which the exemption authorized in paragraph (f) is in effect.
17 "Gross receipts" shall not include amounts paid by
18 telecommunications retailers under the Telecommunications
19 Municipal Infrastructure Maintenance Fee Act.
20 For utility bills issued on or after May 1, 1996, but
21 before May 1, 1997, and for receipts from those utility
22 bills, "gross receipts" does not include one-third of (i)
23 amounts added to customers' bills under Section 9-222 of the
24 Public Utilities Act, or (ii) amounts added to customers'
25 bills by taxpayers who are not subject to rate regulation by
26 the Illinois Commerce Commission for the purpose of
27 recovering any of the tax liabilities described in Section
28 9-222 of the Public Utilities Act. For utility bills issued
29 on or after May 1, 1997, but before May 1, 1998, and for
30 receipts from those utility bills, "gross receipts" does not
31 include two-thirds of (i) amounts added to customers' bills
32 under Section 9-222 of the Public Utilities Act, or (ii)
33 amount added to customers' bills by taxpayers who are not
34 subject to rate regulation by the Illinois Commerce
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1 Commission for the purpose of recovering any of the tax
2 liabilities described in Section 9-222 of the Public
3 Utilities Act. For utility bills issued on or after May 1,
4 1998, and for receipts from those utility bills, "gross
5 receipts" does not include (i) amounts added to customers'
6 bills under Section 9-222 of the Public Utilities Act, or
7 (ii) amounts added to customers' bills by taxpayers who are
8 not subject to rate regulation by the Illinois Commerce
9 Commission for the purpose of recovering any of the tax
10 liabilities described in Section 9-222 of the Public
11 Utilities Act.
12 For purposes of this Section "gross receipts" shall not
13 include (i) amounts added to customers' bills under Section
14 9-221 of the Public Utilities Act, or (ii) charges added to
15 customers' bills to recover the surcharge imposed under the
16 Emergency Telephone System Act. This paragraph is not
17 intended to nor does it make any change in the meaning of
18 "gross receipts" for the purposes of this Section, but is
19 intended to remove possible ambiguities, thereby confirming
20 the existing meaning of "gross receipts" prior to the
21 effective date of this amendatory Act of 1995.
22 The words "transmitting messages", in addition to the
23 usual and popular meaning of person to person communication,
24 shall include the furnishing, for a consideration, of
25 services or facilities (whether owned or leased), or both, to
26 persons in connection with the transmission of messages where
27 those persons do not, in turn, receive any consideration in
28 connection therewith, but shall not include such furnishing
29 of services or facilities to persons for the transmission of
30 messages to the extent that any such services or facilities
31 for the transmission of messages are furnished for a
32 consideration, by those persons to other persons, for the
33 transmission of messages.
34 "Person" as used in this Section means any natural
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1 individual, firm, trust, estate, partnership, association,
2 joint stock company, joint adventure, corporation, limited
3 liability company, municipal corporation, the State or any of
4 its political subdivisions, any State university created by
5 statute, or a receiver, trustee, guardian or other
6 representative appointed by order of any court.
7 "Person maintaining a place of business in this State"
8 shall mean any person having or maintaining within this
9 State, directly or by a subsidiary or other affiliate, an
10 office, generation facility, distribution facility,
11 transmission facility, sales office or other place of
12 business, or any employee, agent, or other representative
13 operating within this State under the authority of the person
14 or its subsidiary or other affiliate, irrespective of whether
15 such place of business or agent or other representative is
16 located in this State permanently or temporarily, or whether
17 such person, subsidiary or other affiliate is licensed or
18 qualified to do business in this State.
19 "Public utility" shall have the meaning ascribed to it in
20 Section 3-105 of the Public Utilities Act and shall include
21 telecommunications carriers as defined in Section 13-202 of
22 that Act and alternative retail electric suppliers as defined
23 in Section 16-102 of that Act.
24 "Purchase at retail" shall mean any acquisition of
25 electricity by a purchaser for purposes of use or
26 consumption, and not for resale, but shall not include the
27 use of electricity by a public utility directly in the
28 generation, production, transmission, delivery or sale of
29 electricity.
30 "Purchaser" shall mean any person who uses or consumes,
31 within the corporate limits of the municipality, electricity
32 acquired in a purchase at retail.
33 In the case of persons engaged in the business of
34 transmitting messages through the use of mobile equipment,
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1 such as cellular phones and paging systems, the gross
2 receipts from the business shall be deemed to originate
3 within the corporate limits of a municipality only if the
4 address to which the bills for the service are sent is within
5 those corporate limits. If, however, that address is not
6 located within a municipality that imposes a tax under this
7 Section, then (i) if the party responsible for the bill is
8 not an individual, the gross receipts from the business shall
9 be deemed to originate within the corporate limits of the
10 municipality where that party's principal place of business
11 in Illinois is located, and (ii) if the party responsible for
12 the bill is an individual, the gross receipts from the
13 business shall be deemed to originate within the corporate
14 limits of the municipality where that party's principal
15 residence in Illinois is located.
16 (e) Any municipality that imposes taxes upon public
17 utilities or upon the privilege of using or consuming
18 electricity pursuant to this Section whose territory includes
19 any part of an enterprise zone or federally designated
20 Foreign Trade Zone or Sub-Zone may, by a majority vote of its
21 corporate authorities, exempt from those taxes for a period
22 not exceeding 20 years any specified percentage of gross
23 receipts of public utilities received from, or electricity
24 used or consumed by, business enterprises that:
25 (1) either (i) make investments that cause the
26 creation of a minimum of 200 full-time equivalent jobs in
27 Illinois, (ii) make investments of at least $175,000,000
28 that cause the creation of a minimum of 150 full-time
29 equivalent jobs in Illinois, or (iii) make investments
30 that cause the retention of a minimum of 1,000 full-time
31 jobs in Illinois; and
32 (2) are either (i) located in an Enterprise Zone
33 established pursuant to the Illinois Enterprise Zone Act
34 or (ii) Department of Commerce and Community Affairs
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1 designated High Impact Businesses located in a federally
2 designated Foreign Trade Zone or Sub-Zone; and
3 (3) are certified by the Department of Commerce and
4 Community Affairs as complying with the requirements
5 specified in clauses (1) and (2) of this paragraph (e).
6 Upon adoption of the ordinance authorizing the exemption,
7 the municipal clerk shall transmit a copy of that ordinance
8 to the Department of Commerce and Community Affairs. The
9 Department of Commerce and Community Affairs shall determine
10 whether the business enterprises located in the municipality
11 meet the criteria prescribed in this paragraph. If the
12 Department of Commerce and Community Affairs determines that
13 the business enterprises meet the criteria, it shall grant
14 certification. The Department of Commerce and Community
15 Affairs shall act upon certification requests within 30 days
16 after receipt of the ordinance.
17 Upon certification of the business enterprise by the
18 Department of Commerce and Community Affairs, the Department
19 of Commerce and Community Affairs shall notify the Department
20 of Revenue of the certification. The Department of Revenue
21 shall notify the public utilities of the exemption status of
22 the gross receipts received from, and the electricity used or
23 consumed by, the certified business enterprises. Such
24 exemption status shall be effective within 3 months after
25 certification.
26 (f) A municipality that imposes taxes upon public
27 utilities or upon the privilege of using or consuming
28 electricity under this Section and whose territory includes
29 part of another unit of local government or a school district
30 may by ordinance exempt the other unit of local government or
31 school district from those taxes.
32 (g) The amendment of this Section by Public Act 84-127
33 shall take precedence over any other amendment of this
34 Section by any other amendatory Act passed by the 84th
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1 General Assembly before the effective date of Public Act
2 84-127.
3 (h) In any case in which, before July 1, 1992, a person
4 engaged in the business of transmitting messages through the
5 use of mobile equipment, such as cellular phones and paging
6 systems, has determined the municipality within which the
7 gross receipts from the business originated by reference to
8 the location of its transmitting or switching equipment, then
9 (i) neither the municipality to which tax was paid on that
10 basis nor the taxpayer that paid tax on that basis shall be
11 required to rebate, refund, or issue credits for any such tax
12 or charge collected from customers to reimburse the taxpayer
13 for the tax and (ii) no municipality to which tax would have
14 been paid with respect to those gross receipts if the
15 provisions of this amendatory Act of 1991 had been in effect
16 before July 1, 1992, shall have any claim against the
17 taxpayer for any amount of the tax.
18 (Source: P.A. 89-325, eff. 1-1-96; 90-16, eff. 6-16-97;
19 90-561, eff. 8-1-98; 90-562, eff. 12-16-97; 90-655, eff.
20 7-30-98.)
21 (65 ILCS 5/8-11-17) (from Ch. 24, par. 8-11-17)
22 Sec. 8-11-17. Municipal telecommunications tax.
23 (a) Beginning on the effective date of this amendatory
24 Act of 1991, the corporate authorities of any municipality in
25 this State may tax any or all of the following acts or
26 privileges:
27 (1) The act or privilege of originating in such
28 municipality or receiving in such municipality intrastate
29 telecommunications by a person at a rate not to exceed 5%
30 of the gross charge for such telecommunications purchased
31 at retail from a retailer by such person. However, such
32 tax is not imposed on such act or privilege to the extent
33 such act or privilege may not, under the Constitution and
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1 statutes of the United States, be made the subject of
2 taxation by municipalities in this State.
3 (2) The act or privilege of originating in such
4 municipality or receiving in such municipality interstate
5 telecommunications by a person at a rate not to exceed 5%
6 of the gross charge for such telecommunications purchased
7 at retail from a retailer by such person. To prevent
8 actual multi-state taxation of the act or privilege that
9 is subject to taxation under this paragraph, any
10 taxpayer, upon proof that the taxpayer has paid a tax in
11 another state on such event, shall be allowed a credit
12 against any tax enacted pursuant to an ordinance
13 authorized by this paragraph to the extent of the amount
14 of such tax properly due and paid in such other state
15 which was not previously allowed as a credit against any
16 other state or local tax in this State. However, such
17 tax is not imposed on the act or privilege to the extent
18 such act or privilege may not, under the Constitution and
19 statutes of the United States, be made the subject of
20 taxation by municipalities in this State.
21 (3) The taxes authorized by paragraphs (1) and (2)
22 of subsection (a) of this Section may only be levied if
23 such municipality does not then have in effect an
24 occupation tax imposed on persons engaged in the business
25 of transmitting messages by means of electricity as
26 authorized by Section 8-11-2 of the Illinois Municipal
27 Code.
28 (b) The tax authorized by this Section shall be
29 collected from the taxpayer by a retailer maintaining a place
30 of business in this State and making or effectuating the sale
31 at retail and shall be remitted by such retailer to the
32 municipality. Any tax required to be collected pursuant to
33 an ordinance authorized by this Section and any such tax
34 collected by such retailer shall constitute a debt owed by
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1 the retailer to such municipality. Retailers shall collect
2 the tax from the taxpayer by adding the tax to the gross
3 charge for the act or privilege of originating or receiving
4 telecommunications when sold for use, in the manner
5 prescribed by the municipality. The tax authorized by this
6 Section shall constitute a debt of the purchaser to the
7 retailer who provides such taxable services until paid and,
8 if unpaid, is recoverable at law in the same manner as the
9 original charge for such taxable services. If the retailer
10 fails to collect the tax from the taxpayer, then the taxpayer
11 shall be required to pay the tax directly to the municipality
12 in the manner provided by the municipality. The municipality
13 imposing the tax shall provide for its administration and
14 enforcement.
15 Beginning January 1, 1994, retailers filing tax returns
16 pursuant to this Section shall, at the time of filing such
17 return, pay to the municipality the amount of the tax imposed
18 by this Section, less a commission of 1.75% which is allowed
19 to reimburse the retailer for the expenses incurred in
20 keeping records, billing the customer, preparing and filing
21 returns, remitting the tax and supplying data to the
22 municipality upon request. No commission may be claimed by a
23 retailer for tax not timely remitted to the municipality.
24 Whenever possible, the tax authorized by this Section
25 shall, when collected, be stated as a distinct item separate
26 and apart from the gross charge for telecommunications.
27 (c) For the purpose of the taxes authorized by this
28 Section:
29 (1) "Amount paid" means the amount charged to the
30 taxpayer's service address in such municipality
31 regardless of where such amount is billed or paid.
32 (2) "Gross charge" means the amount paid for the
33 act or privilege of originating or receiving
34 telecommunications in such municipality and for all
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1 services rendered in connection therewith, valued in
2 money whether paid in money or otherwise, including cash,
3 credits, services and property of every kind or nature,
4 and shall be determined without any deduction on account
5 of the cost of such telecommunications, the cost of the
6 materials used, labor or service costs or any other
7 expense whatsoever. In case credit is extended, the
8 amount thereof shall be included only as and when paid.
9 However, "gross charge" shall not include:
10 (A) any amounts added to a purchaser's bill
11 because of a charge made pursuant to: (i) the tax
12 imposed by this Section, (ii) additional charges
13 added to a purchaser's bill pursuant to Section
14 9-222 of the Public Utilities Act, (iii) the tax
15 imposed by the Telecommunications Excise Tax Act, or
16 (iv) the tax imposed by Section 4251 of the Internal
17 Revenue Code;
18 (B) charges for a sent collect
19 telecommunication received outside of such
20 municipality;
21 (C) charges for leased time on equipment or
22 charges for the storage of data or information or
23 subsequent retrieval or the processing of data or
24 information intended to change its form or content.
25 Such equipment includes, but is not limited to, the
26 use of calculators, computers, data processing
27 equipment, tabulating equipment or accounting
28 equipment and also includes the usage of computers
29 under a time-sharing agreement;
30 (D) charges for customer equipment, including
31 such equipment that is leased or rented by the
32 customer from any source, wherein such charges are
33 disaggregated and separately identified from other
34 charges;
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1 (E) charges to business enterprises certified
2 under Section 9-222.1 of the Public Utilities Act to
3 the extent of such exemption and during the period
4 of time specified by the Department of Commerce and
5 Community Affairs;
6 (F) charges for telecommunications and all
7 services and equipment provided in connection
8 therewith between a parent corporation and its
9 wholly owned subsidiaries or between wholly owned
10 subsidiaries when the tax imposed under this Section
11 has already been paid to a retailer and only to the
12 extent that the charges between the parent
13 corporation and wholly owned subsidiaries or between
14 wholly owned subsidiaries represent expense
15 allocation between the corporations and not the
16 generation of profit for the corporation rendering
17 such service;
18 (G) bad debts ("bad debt" means any portion of
19 a debt that is related to a sale at retail for which
20 gross charges are not otherwise deductible or
21 excludable that has become worthless or
22 uncollectable, as determined under applicable
23 federal income tax standards; if the portion of the
24 debt deemed to be bad is subsequently paid, the
25 retailer shall report and pay the tax on that
26 portion during the reporting period in which the
27 payment is made);
28 (H) charges paid by inserting coins in
29 coin-operated telecommunication devices; or
30 (I) amounts paid by telecommunications
31 retailers under the Telecommunications Municipal
32 Infrastructure Maintenance Fee Act.
33 (3) "Interstate telecommunications" means all
34 telecommunications that either originate or terminate
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1 outside this State.
2 (4) "Intrastate telecommunications" means all
3 telecommunications that originate and terminate within
4 this State.
5 (5) "Person" means any natural individual, firm,
6 trust, estate, partnership, association, joint stock
7 company, joint venture, corporation, limited liability
8 company, or a receiver, trustee, guardian or other
9 representative appointed by order of any court, the
10 Federal and State governments, including State
11 universities created by statute, or any city, town,
12 county, or other political subdivision of this State.
13 (6) "Purchase at retail" means the acquisition,
14 consumption or use of telecommunications through a sale
15 at retail.
16 (7) "Retailer" means and includes every person
17 engaged in the business of making sales at retail as
18 defined in this Section. A municipality may, in its
19 discretion, upon application, authorize the collection of
20 the tax hereby imposed by any retailer not maintaining a
21 place of business within this State, who to the
22 satisfaction of the municipality, furnishes adequate
23 security to insure collection and payment of the tax.
24 Such retailer shall be issued, without charge, a permit
25 to collect such tax. When so authorized, it shall be the
26 duty of such retailer to collect the tax upon all of the
27 gross charges for telecommunications in such municipality
28 in the same manner and subject to the same requirements
29 as a retailer maintaining a place of business within such
30 municipality.
31 (8) "Retailer maintaining a place of business in
32 this State", or any like term, means and includes any
33 retailer having or maintaining within this State,
34 directly or by a subsidiary, an office, distribution
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1 facilities, transmission facilities, sales office,
2 warehouse or other place of business, or any agent or
3 other representative operating within this State under
4 the authority of the retailer or its subsidiary,
5 irrespective of whether such place of business or agent
6 or other representative is located here permanently or
7 temporarily, or whether such retailer or subsidiary is
8 licensed to do business in this State.
9 (9) "Sale at retail" means the transmitting,
10 supplying or furnishing of telecommunications and all
11 services rendered in connection therewith for a
12 consideration, to persons other than the Federal and
13 State governments, and State universities created by
14 statute and other than between a parent corporation and
15 its wholly owned subsidiaries or between wholly owned
16 subsidiaries, when the tax has already been paid to a
17 retailer and the gross charge made by one such
18 corporation to another such corporation is not greater
19 than the gross charge paid to the retailer for their use
20 or consumption and not for resale.
21 (10) "Service address" means the location of
22 telecommunications equipment from which
23 telecommunications services are originated or at which
24 telecommunications services are received by a taxpayer.
25 If this is not a defined location, as in the case of
26 mobile phones, paging systems, maritime systems,
27 air-to-ground systems and the like, "service address"
28 shall mean the location of a taxpayer's primary use of
29 the telecommunication equipment as defined by telephone
30 number, authorization code, or location in Illinois where
31 bills are sent.
32 (11) "Taxpayer" means a person who individually or
33 through his agents, employees, or permittees engages in
34 the act or privilege of originating in such municipality
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1 or receiving in such municipality telecommunications and
2 who incurs a tax liability under any ordinance authorized
3 by this Section.
4 (12) "Telecommunications", in addition to the usual
5 and popular meaning, includes, but is not limited to,
6 messages or information transmitted through use of local,
7 toll and wide area telephone service, channel services,
8 telegraph services, teletypewriter service, computer
9 exchange services; cellular mobile telecommunications
10 service, specialized mobile radio services, paging
11 service, or any other form of mobile and portable one-way
12 or two-way communications, or any other transmission of
13 messages or information by electronic or similar means,
14 between or among points by wire, cable, fiber optics,
15 laser, microwave, radio, satellite or similar facilities.
16 The definition of "telecommunications" shall not include
17 value added services in which computer processing
18 applications are used to act on the form, content, code
19 and protocol of the information for purposes other than
20 transmission. "Telecommunications" shall not include
21 purchase of telecommunications by a telecommunications
22 service provider for use as a component part of the
23 service provided by him to the ultimate retail consumer
24 who originates or terminates the taxable end-to-end
25 communications. Carrier access charges, right of access
26 charges, charges for use of inter-company facilities, and
27 all telecommunications resold in the subsequent provision
28 used as a component of, or integrated into, end-to-end
29 telecommunications service shall be non-taxable as sales
30 for resale. Beginning January 1, 2001, prepaid telephone
31 calling arrangements shall not be considered
32 "telecommunications" subject to the tax imposed under
33 this Act. For purposes of this Section, "prepaid
34 telephone calling arrangements" means that term as
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1 defined in Section 2-27 of the Retailers' Occupation Tax
2 Act.
3 (d) If a person, who originates or receives
4 telecommunications in such municipality claims to be a
5 reseller of such telecommunications, such person shall apply
6 to the municipality for a resale number. Such applicant
7 shall state facts which will show the municipality why such
8 applicant is not liable for tax under any ordinance
9 authorized by this Section on any of such purchases and shall
10 furnish such additional information as the municipality may
11 reasonably require.
12 Upon approval of the application, the municipality shall
13 assign a resale number to the applicant and shall certify
14 such number to the applicant. The municipality may cancel
15 any number which is obtained through misrepresentation, or
16 which is used to send or receive such telecommunication
17 tax-free when such actions in fact are not for resale, or
18 which no longer applies because of the person's having
19 discontinued the making of resales.
20 Except as provided hereinabove in this Section, the act
21 or privilege of sending or receiving telecommunications in
22 this State shall not be made tax-free on the ground of being
23 a sale for resale unless the person has an active resale
24 number from the municipality and furnishes that number to the
25 retailer in connection with certifying to the retailer that
26 any sale to such person is non-taxable because of being a
27 sale for resale.
28 (e) A municipality that imposes taxes upon
29 telecommunications under this Section and whose territory
30 includes part of another unit of local government or a school
31 district may, by ordinance, exempt the other unit of local
32 government or school district from those taxes.
33 (f) A municipality that imposes taxes upon
34 telecommunications under this Section may, by ordinance, (i)
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1 reduce the rate of the tax for persons 65 years of age or
2 older or (ii) exempt persons 65 years of age or older from
3 those taxes. Taxes related to such rate reductions or
4 exemptions shall be rebated from the municipality directly to
5 persons qualified for the rate reduction or exemption as
6 determined by the municipality's ordinance.
7 (g) A municipality with a population of more than
8 500,000 that imposes a tax under this Section may, by
9 ordinance, exempt from the tax all charges for the inbound
10 toll-free telecommunications service commonly known as "800",
11 "877", or "888" or for a similar service.
12 (Source: P.A. 90-357, eff. 1-1-98; 90-562, eff. 12-16-97.)
13 Section 90. The State Mandates Act is amended by adding
14 Section 8.24 as follows:
15 (30 ILCS 805/8.24 new)
16 Sec. 8.24. Exempt mandate. Notwithstanding Sections 6
17 and 8 of this Act, no reimbursement by the State is required
18 for the implementation of any mandate created by this
19 amendatory Act of the 91st General Assembly.
20 Section 99. Effective date. This Act takes effect upon
21 becoming law.
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1 INDEX
2 Statutes amended in order of appearance
3 35 ILCS 105/3 from Ch. 120, par. 439.3
4 35 ILCS 105/3-27 new
5 35 ILCS 110/3 from Ch. 120, par. 439.33
6 35 ILCS 110/3-27 new
7 35 ILCS 115/3 from Ch. 120, par. 439.103
8 35 ILCS 115/3-27 new
9 35 ILCS 120/2 from Ch. 120, par. 441
10 35 ILCS 120/2-27 new
11 35 ILCS 630/2 from Ch. 120, par. 2002
12 35 ILCS 630/3 from Ch. 120, par. 2003
13 35 ILCS 630/6 from Ch. 120, par. 2006
14 35 ILCS 635/10
15 35 ILCS 635/20
16 65 ILCS 5/8-11-2 from Ch. 24, par. 8-11-2
17 65 ILCS 5/8-11-17 from Ch. 24, par. 8-11-17
18 30 ILCS 805/8.24 new