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91_SB1707ham001
LRB9112999SMdvam04
1 AMENDMENT TO SENATE BILL 1707
2 AMENDMENT NO. . Amend Senate Bill 1707 by replacing
3 the title with the following:
4 "AN ACT concerning taxes."; and
5 by replacing everything after the enacting clause with the
6 following:
7 "Section 5. The Illinois Income Tax Act is amended by
8 changing Sections 201, 203, 405, 803, and 1501 as follows:
9 (35 ILCS 5/201) (from Ch. 120, par. 2-201)
10 Sec. 201. Tax Imposed.
11 (a) In general. A tax measured by net income is hereby
12 imposed on every individual, corporation, trust and estate
13 for each taxable year ending after July 31, 1969 on the
14 privilege of earning or receiving income in or as a resident
15 of this State. Such tax shall be in addition to all other
16 occupation or privilege taxes imposed by this State or by any
17 municipal corporation or political subdivision thereof.
18 (b) Rates. The tax imposed by subsection (a) of this
19 Section shall be determined as follows, except as adjusted by
20 subsection (d-1):
21 (1) In the case of an individual, trust or estate,
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1 for taxable years ending prior to July 1, 1989, an amount
2 equal to 2 1/2% of the taxpayer's net income for the
3 taxable year.
4 (2) In the case of an individual, trust or estate,
5 for taxable years beginning prior to July 1, 1989 and
6 ending after June 30, 1989, an amount equal to the sum of
7 (i) 2 1/2% of the taxpayer's net income for the period
8 prior to July 1, 1989, as calculated under Section 202.3,
9 and (ii) 3% of the taxpayer's net income for the period
10 after June 30, 1989, as calculated under Section 202.3.
11 (3) In the case of an individual, trust or estate,
12 for taxable years beginning after June 30, 1989, an
13 amount equal to 3% of the taxpayer's net income for the
14 taxable year.
15 (4) (Blank).
16 (5) (Blank).
17 (6) In the case of a corporation, for taxable years
18 ending prior to July 1, 1989, an amount equal to 4% of
19 the taxpayer's net income for the taxable year.
20 (7) In the case of a corporation, for taxable years
21 beginning prior to July 1, 1989 and ending after June 30,
22 1989, an amount equal to the sum of (i) 4% of the
23 taxpayer's net income for the period prior to July 1,
24 1989, as calculated under Section 202.3, and (ii) 4.8% of
25 the taxpayer's net income for the period after June 30,
26 1989, as calculated under Section 202.3.
27 (8) In the case of a corporation, for taxable years
28 beginning after June 30, 1989, an amount equal to 4.8% of
29 the taxpayer's net income for the taxable year.
30 (c) Beginning on July 1, 1979 and thereafter, in
31 addition to such income tax, there is also hereby imposed the
32 Personal Property Tax Replacement Income Tax measured by net
33 income on every corporation (including Subchapter S
34 corporations), partnership and trust, for each taxable year
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1 ending after June 30, 1979. Such taxes are imposed on the
2 privilege of earning or receiving income in or as a resident
3 of this State. The Personal Property Tax Replacement Income
4 Tax shall be in addition to the income tax imposed by
5 subsections (a) and (b) of this Section and in addition to
6 all other occupation or privilege taxes imposed by this State
7 or by any municipal corporation or political subdivision
8 thereof.
9 (d) Additional Personal Property Tax Replacement Income
10 Tax Rates. The personal property tax replacement income tax
11 imposed by this subsection and subsection (c) of this Section
12 in the case of a corporation, other than a Subchapter S
13 corporation and except as adjusted by subsection (d-1), shall
14 be an additional amount equal to 2.85% of such taxpayer's net
15 income for the taxable year, except that beginning on January
16 1, 1981, and thereafter, the rate of 2.85% specified in this
17 subsection shall be reduced to 2.5%, and in the case of a
18 partnership, trust or a Subchapter S corporation shall be an
19 additional amount equal to 1.5% of such taxpayer's net income
20 for the taxable year.
21 (d-1) Rate reduction for certain foreign insurers. In
22 the case of a foreign insurer, as defined by Section 35A-5 of
23 the Illinois Insurance Code, whose state or country of
24 domicile imposes on insurers domiciled in Illinois a
25 retaliatory tax (excluding any insurer whose reinsurance
26 premiums assumed are 50% or more of its total insurance
27 premiums as determined under paragraph (2) of subsection (b)
28 of Section 304, except that for purposes of this
29 determination reinsurance premiums do not include assumed
30 premiums from inter-affiliate pooling arrangements),
31 beginning with taxable years ending on or after December 31,
32 1999 and ending with taxable years ending on or before
33 December 31, 2000, the sum of the rates of tax imposed by
34 subsections (b) and (d) shall be reduced (but not increased)
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1 to the rate at which the total amount of tax imposed under
2 this Act, net of all credits allowed under this Act, shall
3 equal (i) the total amount of tax that would be imposed on
4 the foreign insurer's net income allocable to Illinois for
5 the taxable year by such foreign insurer's state or country
6 of domicile if that net income were subject to all income
7 taxes and taxes measured by net income imposed by such
8 foreign insurer's state or country of domicile, net of all
9 credits allowed or (ii) a rate of zero if no such tax is
10 imposed on such income by the foreign insurer's state of
11 domicile.
12 (1) For the purposes of subsection (d-1), in no
13 event shall the sum of the rates of tax imposed by
14 subsections (b) and (d) be reduced below the rate at
15 which the sum of:
16 (A) the total amount of tax imposed on such
17 foreign insurer under this Act for a taxable year,
18 net of all credits allowed under this Act, plus
19 (B) the privilege tax imposed by Section 409
20 of the Illinois Insurance Code, the fire insurance
21 company tax imposed by Section 12 of the Fire
22 Investigation Act, and the fire department taxes
23 imposed under Section 11-10-1 of the Illinois
24 Municipal Code,
25 equals 1.25% of the net taxable premiums written for the
26 taxable year, as described by subsection (1) of Section
27 409 of the Illinois Insurance Code. This paragraph will
28 in no event increase the rates imposed under subsections
29 (b) and (d).
30 (2) Any reduction in the rates of tax imposed by
31 this subsection shall be applied first against the rates
32 imposed by subsection (b) and only after the tax imposed
33 by subsection (a) net of all credits allowed under this
34 Section other than the credit allowed under subsection
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1 (i) has been reduced to zero, against the rates imposed
2 by subsection (d).
3 (3) The provisions of this subsection (d-1) are
4 effective only through December 31, 2000 and cease to be
5 effective on January 1, 2001; but this does not affect
6 any claim or obligation based upon the use or application
7 of this subsection for tax years ending on December 31,
8 2000 or earlier.
9 (e) Investment credit. A taxpayer shall be allowed a
10 credit against the Personal Property Tax Replacement Income
11 Tax for investment in qualified property.
12 (1) A taxpayer shall be allowed a credit equal to
13 .5% of the basis of qualified property placed in service
14 during the taxable year, provided such property is placed
15 in service on or after July 1, 1984. There shall be
16 allowed an additional credit equal to .5% of the basis of
17 qualified property placed in service during the taxable
18 year, provided such property is placed in service on or
19 after July 1, 1986, and the taxpayer's base employment
20 within Illinois has increased by 1% or more over the
21 preceding year as determined by the taxpayer's employment
22 records filed with the Illinois Department of Employment
23 Security. Taxpayers who are new to Illinois shall be
24 deemed to have met the 1% growth in base employment for
25 the first year in which they file employment records with
26 the Illinois Department of Employment Security. The
27 provisions added to this Section by Public Act 85-1200
28 (and restored by Public Act 87-895) shall be construed as
29 declaratory of existing law and not as a new enactment.
30 If, in any year, the increase in base employment within
31 Illinois over the preceding year is less than 1%, the
32 additional credit shall be limited to that percentage
33 times a fraction, the numerator of which is .5% and the
34 denominator of which is 1%, but shall not exceed .5%.
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1 The investment credit shall not be allowed to the extent
2 that it would reduce a taxpayer's liability in any tax
3 year below zero, nor may any credit for qualified
4 property be allowed for any year other than the year in
5 which the property was placed in service in Illinois. For
6 tax years ending on or after December 31, 1987, and on or
7 before December 31, 1988, the credit shall be allowed for
8 the tax year in which the property is placed in service,
9 or, if the amount of the credit exceeds the tax liability
10 for that year, whether it exceeds the original liability
11 or the liability as later amended, such excess may be
12 carried forward and applied to the tax liability of the 5
13 taxable years following the excess credit years if the
14 taxpayer (i) makes investments which cause the creation
15 of a minimum of 2,000 full-time equivalent jobs in
16 Illinois, (ii) is located in an enterprise zone
17 established pursuant to the Illinois Enterprise Zone Act
18 and (iii) is certified by the Department of Commerce and
19 Community Affairs as complying with the requirements
20 specified in clause (i) and (ii) by July 1, 1986. The
21 Department of Commerce and Community Affairs shall notify
22 the Department of Revenue of all such certifications
23 immediately. For tax years ending after December 31,
24 1988, the credit shall be allowed for the tax year in
25 which the property is placed in service, or, if the
26 amount of the credit exceeds the tax liability for that
27 year, whether it exceeds the original liability or the
28 liability as later amended, such excess may be carried
29 forward and applied to the tax liability of the 5 taxable
30 years following the excess credit years. The credit shall
31 be applied to the earliest year for which there is a
32 liability. If there is credit from more than one tax year
33 that is available to offset a liability, earlier credit
34 shall be applied first.
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1 (2) The term "qualified property" means property
2 which:
3 (A) is tangible, whether new or used,
4 including buildings and structural components of
5 buildings and signs that are real property, but not
6 including land or improvements to real property that
7 are not a structural component of a building such as
8 landscaping, sewer lines, local access roads,
9 fencing, parking lots, and other appurtenances;
10 (B) is depreciable pursuant to Section 167 of
11 the Internal Revenue Code, except that "3-year
12 property" as defined in Section 168(c)(2)(A) of that
13 Code is not eligible for the credit provided by this
14 subsection (e);
15 (C) is acquired by purchase as defined in
16 Section 179(d) of the Internal Revenue Code;
17 (D) is used in Illinois by a taxpayer who is
18 primarily engaged in manufacturing, or in mining
19 coal or fluorite, or in retailing; and
20 (E) has not previously been used in Illinois
21 in such a manner and by such a person as would
22 qualify for the credit provided by this subsection
23 (e) or subsection (f).
24 (3) For purposes of this subsection (e),
25 "manufacturing" means the material staging and production
26 of tangible personal property by procedures commonly
27 regarded as manufacturing, processing, fabrication, or
28 assembling which changes some existing material into new
29 shapes, new qualities, or new combinations. For purposes
30 of this subsection (e) the term "mining" shall have the
31 same meaning as the term "mining" in Section 613(c) of
32 the Internal Revenue Code. For purposes of this
33 subsection (e), the term "retailing" means the sale of
34 tangible personal property or services rendered in
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1 conjunction with the sale of tangible consumer goods or
2 commodities.
3 (4) The basis of qualified property shall be the
4 basis used to compute the depreciation deduction for
5 federal income tax purposes.
6 (5) If the basis of the property for federal income
7 tax depreciation purposes is increased after it has been
8 placed in service in Illinois by the taxpayer, the amount
9 of such increase shall be deemed property placed in
10 service on the date of such increase in basis.
11 (6) The term "placed in service" shall have the
12 same meaning as under Section 46 of the Internal Revenue
13 Code.
14 (7) If during any taxable year, any property ceases
15 to be qualified property in the hands of the taxpayer
16 within 48 months after being placed in service, or the
17 situs of any qualified property is moved outside Illinois
18 within 48 months after being placed in service, the
19 Personal Property Tax Replacement Income Tax for such
20 taxable year shall be increased. Such increase shall be
21 determined by (i) recomputing the investment credit which
22 would have been allowed for the year in which credit for
23 such property was originally allowed by eliminating such
24 property from such computation and, (ii) subtracting such
25 recomputed credit from the amount of credit previously
26 allowed. For the purposes of this paragraph (7), a
27 reduction of the basis of qualified property resulting
28 from a redetermination of the purchase price shall be
29 deemed a disposition of qualified property to the extent
30 of such reduction.
31 (8) Unless the investment credit is extended by
32 law, the basis of qualified property shall not include
33 costs incurred after December 31, 2003, except for costs
34 incurred pursuant to a binding contract entered into on
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1 or before December 31, 2003.
2 (9) Each taxable year ending before December 31,
3 2000, a partnership may elect to pass through to its
4 partners the credits to which the partnership is entitled
5 under this subsection (e) for the taxable year. A
6 partner may use the credit allocated to him or her under
7 this paragraph only against the tax imposed in
8 subsections (c) and (d) of this Section. If the
9 partnership makes that election, those credits shall be
10 allocated among the partners in the partnership in
11 accordance with the rules set forth in Section 704(b) of
12 the Internal Revenue Code, and the rules promulgated
13 under that Section, and the allocated amount of the
14 credits shall be allowed to the partners for that taxable
15 year. The partnership shall make this election on its
16 Personal Property Tax Replacement Income Tax return for
17 that taxable year. The election to pass through the
18 credits shall be irrevocable.
19 For taxable years ending on or after December 31,
20 2000, a partner that qualifies its partnership for a
21 subtraction under subparagraph (I) of paragraph (2) of
22 subsection (d) of Section 203 or a shareholder that
23 qualifies a Subchapter S corporation for a subtraction
24 under subparagraph (S) of paragraph (2) of subsection (b)
25 of Section 203 shall be allowed a credit under this
26 subsection (e) equal to its share of the credit earned
27 under this subsection (e) during the taxable year by the
28 partnership or Subchapter S corporation, determined in
29 accordance with the determination of income and
30 distributive share of income under Sections 702 and 704
31 and Subchapter S of the Internal Revenue Code. This
32 paragraph is exempt from the provisions of Section 250.
33 (f) Investment credit; Enterprise Zone.
34 (1) A taxpayer shall be allowed a credit against
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1 the tax imposed by subsections (a) and (b) of this
2 Section for investment in qualified property which is
3 placed in service in an Enterprise Zone created pursuant
4 to the Illinois Enterprise Zone Act. For partners,
5 shareholders of Subchapter S corporations, and owners of
6 limited liability companies, if the liability company is
7 treated as a partnership for purposes of federal and
8 State income taxation, there shall be allowed a credit
9 under this subsection (f) to be determined in accordance
10 with the determination of income and distributive share
11 of income under Sections 702 and 704 and Subchapter S of
12 the Internal Revenue Code. The credit shall be .5% of the
13 basis for such property. The credit shall be available
14 only in the taxable year in which the property is placed
15 in service in the Enterprise Zone and shall not be
16 allowed to the extent that it would reduce a taxpayer's
17 liability for the tax imposed by subsections (a) and (b)
18 of this Section to below zero. For tax years ending on or
19 after December 31, 1985, the credit shall be allowed for
20 the tax year in which the property is placed in service,
21 or, if the amount of the credit exceeds the tax liability
22 for that year, whether it exceeds the original liability
23 or the liability as later amended, such excess may be
24 carried forward and applied to the tax liability of the 5
25 taxable years following the excess credit year. The
26 credit shall be applied to the earliest year for which
27 there is a liability. If there is credit from more than
28 one tax year that is available to offset a liability, the
29 credit accruing first in time shall be applied first.
30 (2) The term qualified property means property
31 which:
32 (A) is tangible, whether new or used,
33 including buildings and structural components of
34 buildings;
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1 (B) is depreciable pursuant to Section 167 of
2 the Internal Revenue Code, except that "3-year
3 property" as defined in Section 168(c)(2)(A) of that
4 Code is not eligible for the credit provided by this
5 subsection (f);
6 (C) is acquired by purchase as defined in
7 Section 179(d) of the Internal Revenue Code;
8 (D) is used in the Enterprise Zone by the
9 taxpayer; and
10 (E) has not been previously used in Illinois
11 in such a manner and by such a person as would
12 qualify for the credit provided by this subsection
13 (f) or subsection (e).
14 (3) The basis of qualified property shall be the
15 basis used to compute the depreciation deduction for
16 federal income tax purposes.
17 (4) If the basis of the property for federal income
18 tax depreciation purposes is increased after it has been
19 placed in service in the Enterprise Zone by the taxpayer,
20 the amount of such increase shall be deemed property
21 placed in service on the date of such increase in basis.
22 (5) The term "placed in service" shall have the
23 same meaning as under Section 46 of the Internal Revenue
24 Code.
25 (6) If during any taxable year, any property ceases
26 to be qualified property in the hands of the taxpayer
27 within 48 months after being placed in service, or the
28 situs of any qualified property is moved outside the
29 Enterprise Zone within 48 months after being placed in
30 service, the tax imposed under subsections (a) and (b) of
31 this Section for such taxable year shall be increased.
32 Such increase shall be determined by (i) recomputing the
33 investment credit which would have been allowed for the
34 year in which credit for such property was originally
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1 allowed by eliminating such property from such
2 computation, and (ii) subtracting such recomputed credit
3 from the amount of credit previously allowed. For the
4 purposes of this paragraph (6), a reduction of the basis
5 of qualified property resulting from a redetermination of
6 the purchase price shall be deemed a disposition of
7 qualified property to the extent of such reduction.
8 (g) Jobs Tax Credit; Enterprise Zone and Foreign Trade
9 Zone or Sub-Zone.
10 (1) A taxpayer conducting a trade or business in an
11 enterprise zone or a High Impact Business designated by
12 the Department of Commerce and Community Affairs
13 conducting a trade or business in a federally designated
14 Foreign Trade Zone or Sub-Zone shall be allowed a credit
15 against the tax imposed by subsections (a) and (b) of
16 this Section in the amount of $500 per eligible employee
17 hired to work in the zone during the taxable year.
18 (2) To qualify for the credit:
19 (A) the taxpayer must hire 5 or more eligible
20 employees to work in an enterprise zone or federally
21 designated Foreign Trade Zone or Sub-Zone during the
22 taxable year;
23 (B) the taxpayer's total employment within the
24 enterprise zone or federally designated Foreign
25 Trade Zone or Sub-Zone must increase by 5 or more
26 full-time employees beyond the total employed in
27 that zone at the end of the previous tax year for
28 which a jobs tax credit under this Section was
29 taken, or beyond the total employed by the taxpayer
30 as of December 31, 1985, whichever is later; and
31 (C) the eligible employees must be employed
32 180 consecutive days in order to be deemed hired for
33 purposes of this subsection.
34 (3) An "eligible employee" means an employee who
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1 is:
2 (A) Certified by the Department of Commerce
3 and Community Affairs as "eligible for services"
4 pursuant to regulations promulgated in accordance
5 with Title II of the Job Training Partnership Act,
6 Training Services for the Disadvantaged or Title III
7 of the Job Training Partnership Act, Employment and
8 Training Assistance for Dislocated Workers Program.
9 (B) Hired after the enterprise zone or
10 federally designated Foreign Trade Zone or Sub-Zone
11 was designated or the trade or business was located
12 in that zone, whichever is later.
13 (C) Employed in the enterprise zone or Foreign
14 Trade Zone or Sub-Zone. An employee is employed in
15 an enterprise zone or federally designated Foreign
16 Trade Zone or Sub-Zone if his services are rendered
17 there or it is the base of operations for the
18 services performed.
19 (D) A full-time employee working 30 or more
20 hours per week.
21 (4) For tax years ending on or after December 31,
22 1985 and prior to December 31, 1988, the credit shall be
23 allowed for the tax year in which the eligible employees
24 are hired. For tax years ending on or after December 31,
25 1988, the credit shall be allowed for the tax year
26 immediately following the tax year in which the eligible
27 employees are hired. If the amount of the credit exceeds
28 the tax liability for that year, whether it exceeds the
29 original liability or the liability as later amended,
30 such excess may be carried forward and applied to the tax
31 liability of the 5 taxable years following the excess
32 credit year. The credit shall be applied to the earliest
33 year for which there is a liability. If there is credit
34 from more than one tax year that is available to offset a
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1 liability, earlier credit shall be applied first.
2 (5) The Department of Revenue shall promulgate such
3 rules and regulations as may be deemed necessary to carry
4 out the purposes of this subsection (g).
5 (6) The credit shall be available for eligible
6 employees hired on or after January 1, 1986.
7 (h) Investment credit; High Impact Business.
8 (1) Subject to subsection (b) of Section 5.5 of the
9 Illinois Enterprise Zone Act, a taxpayer shall be allowed
10 a credit against the tax imposed by subsections (a) and
11 (b) of this Section for investment in qualified property
12 which is placed in service by a Department of Commerce
13 and Community Affairs designated High Impact Business.
14 The credit shall be .5% of the basis for such property.
15 The credit shall not be available until the minimum
16 investments in qualified property set forth in Section
17 5.5 of the Illinois Enterprise Zone Act have been
18 satisfied and shall not be allowed to the extent that it
19 would reduce a taxpayer's liability for the tax imposed
20 by subsections (a) and (b) of this Section to below zero.
21 The credit applicable to such minimum investments shall
22 be taken in the taxable year in which such minimum
23 investments have been completed. The credit for
24 additional investments beyond the minimum investment by a
25 designated high impact business shall be available only
26 in the taxable year in which the property is placed in
27 service and shall not be allowed to the extent that it
28 would reduce a taxpayer's liability for the tax imposed
29 by subsections (a) and (b) of this Section to below zero.
30 For tax years ending on or after December 31, 1987, the
31 credit shall be allowed for the tax year in which the
32 property is placed in service, or, if the amount of the
33 credit exceeds the tax liability for that year, whether
34 it exceeds the original liability or the liability as
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1 later amended, such excess may be carried forward and
2 applied to the tax liability of the 5 taxable years
3 following the excess credit year. The credit shall be
4 applied to the earliest year for which there is a
5 liability. If there is credit from more than one tax
6 year that is available to offset a liability, the credit
7 accruing first in time shall be applied first.
8 Changes made in this subdivision (h)(1) by Public
9 Act 88-670 restore changes made by Public Act 85-1182 and
10 reflect existing law.
11 (2) The term qualified property means property
12 which:
13 (A) is tangible, whether new or used,
14 including buildings and structural components of
15 buildings;
16 (B) is depreciable pursuant to Section 167 of
17 the Internal Revenue Code, except that "3-year
18 property" as defined in Section 168(c)(2)(A) of that
19 Code is not eligible for the credit provided by this
20 subsection (h);
21 (C) is acquired by purchase as defined in
22 Section 179(d) of the Internal Revenue Code; and
23 (D) is not eligible for the Enterprise Zone
24 Investment Credit provided by subsection (f) of this
25 Section.
26 (3) The basis of qualified property shall be the
27 basis used to compute the depreciation deduction for
28 federal income tax purposes.
29 (4) If the basis of the property for federal income
30 tax depreciation purposes is increased after it has been
31 placed in service in a federally designated Foreign Trade
32 Zone or Sub-Zone located in Illinois by the taxpayer, the
33 amount of such increase shall be deemed property placed
34 in service on the date of such increase in basis.
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1 (5) The term "placed in service" shall have the
2 same meaning as under Section 46 of the Internal Revenue
3 Code.
4 (6) If during any taxable year ending on or before
5 December 31, 1996, any property ceases to be qualified
6 property in the hands of the taxpayer within 48 months
7 after being placed in service, or the situs of any
8 qualified property is moved outside Illinois within 48
9 months after being placed in service, the tax imposed
10 under subsections (a) and (b) of this Section for such
11 taxable year shall be increased. Such increase shall be
12 determined by (i) recomputing the investment credit which
13 would have been allowed for the year in which credit for
14 such property was originally allowed by eliminating such
15 property from such computation, and (ii) subtracting such
16 recomputed credit from the amount of credit previously
17 allowed. For the purposes of this paragraph (6), a
18 reduction of the basis of qualified property resulting
19 from a redetermination of the purchase price shall be
20 deemed a disposition of qualified property to the extent
21 of such reduction.
22 (7) Beginning with tax years ending after December
23 31, 1996, if a taxpayer qualifies for the credit under
24 this subsection (h) and thereby is granted a tax
25 abatement and the taxpayer relocates its entire facility
26 in violation of the explicit terms and length of the
27 contract under Section 18-183 of the Property Tax Code,
28 the tax imposed under subsections (a) and (b) of this
29 Section shall be increased for the taxable year in which
30 the taxpayer relocated its facility by an amount equal to
31 the amount of credit received by the taxpayer under this
32 subsection (h).
33 (i) A credit shall be allowed against the tax imposed by
34 subsections (a) and (b) of this Section for the tax imposed
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1 by subsections (c) and (d) of this Section. This credit
2 shall be computed by multiplying the tax imposed by
3 subsections (c) and (d) of this Section by a fraction, the
4 numerator of which is base income allocable to Illinois and
5 the denominator of which is Illinois base income, and further
6 multiplying the product by the tax rate imposed by
7 subsections (a) and (b) of this Section.
8 Any credit earned on or after December 31, 1986 under
9 this subsection which is unused in the year the credit is
10 computed because it exceeds the tax liability imposed by
11 subsections (a) and (b) for that year (whether it exceeds the
12 original liability or the liability as later amended) may be
13 carried forward and applied to the tax liability imposed by
14 subsections (a) and (b) of the 5 taxable years following the
15 excess credit year. This credit shall be applied first to
16 the earliest year for which there is a liability. If there
17 is a credit under this subsection from more than one tax year
18 that is available to offset a liability the earliest credit
19 arising under this subsection shall be applied first.
20 If, during any taxable year ending on or after December
21 31, 1986, the tax imposed by subsections (c) and (d) of this
22 Section for which a taxpayer has claimed a credit under this
23 subsection (i) is reduced, the amount of credit for such tax
24 shall also be reduced. Such reduction shall be determined by
25 recomputing the credit to take into account the reduced tax
26 imposed by subsection (c) and (d). If any portion of the
27 reduced amount of credit has been carried to a different
28 taxable year, an amended return shall be filed for such
29 taxable year to reduce the amount of credit claimed.
30 (j) Training expense credit. Beginning with tax years
31 ending on or after December 31, 1986, a taxpayer shall be
32 allowed a credit against the tax imposed by subsection (a)
33 and (b) under this Section for all amounts paid or accrued,
34 on behalf of all persons employed by the taxpayer in Illinois
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1 or Illinois residents employed outside of Illinois by a
2 taxpayer, for educational or vocational training in
3 semi-technical or technical fields or semi-skilled or skilled
4 fields, which were deducted from gross income in the
5 computation of taxable income. The credit against the tax
6 imposed by subsections (a) and (b) shall be 1.6% of such
7 training expenses. For partners, shareholders of subchapter
8 S corporations, and owners of limited liability companies, if
9 the liability company is treated as a partnership for
10 purposes of federal and State income taxation, there shall be
11 allowed a credit under this subsection (j) to be determined
12 in accordance with the determination of income and
13 distributive share of income under Sections 702 and 704 and
14 subchapter S of the Internal Revenue Code.
15 Any credit allowed under this subsection which is unused
16 in the year the credit is earned may be carried forward to
17 each of the 5 taxable years following the year for which the
18 credit is first computed until it is used. This credit shall
19 be applied first to the earliest year for which there is a
20 liability. If there is a credit under this subsection from
21 more than one tax year that is available to offset a
22 liability the earliest credit arising under this subsection
23 shall be applied first.
24 (k) Research and development credit.
25 Beginning with tax years ending after July 1, 1990, a
26 taxpayer shall be allowed a credit against the tax imposed by
27 subsections (a) and (b) of this Section for increasing
28 research activities in this State. The credit allowed
29 against the tax imposed by subsections (a) and (b) shall be
30 equal to 6 1/2% of the qualifying expenditures for increasing
31 research activities in this State. For partners, shareholders
32 of subchapter S corporations, and owners of limited liability
33 companies, if the liability company is treated as a
34 partnership for purposes of federal and State income
-19- LRB9112999SMdvam04
1 taxation, there shall be allowed a credit under this
2 subsection to be determined in accordance with the
3 determination of income and distributive share of income
4 under Sections 702 and 704 and subchapter S of the Internal
5 Revenue Code.
6 For purposes of this subsection, "qualifying
7 expenditures" means the qualifying expenditures as defined
8 for the federal credit for increasing research activities
9 which would be allowable under Section 41 of the Internal
10 Revenue Code and which are conducted in this State,
11 "qualifying expenditures for increasing research activities
12 in this State" means the excess of qualifying expenditures
13 for the taxable year in which incurred over qualifying
14 expenditures for the base period, "qualifying expenditures
15 for the base period" means the average of the qualifying
16 expenditures for each year in the base period, and "base
17 period" means the 3 taxable years immediately preceding the
18 taxable year for which the determination is being made.
19 Any credit in excess of the tax liability for the taxable
20 year may be carried forward. A taxpayer may elect to have the
21 unused credit shown on its final completed return carried
22 over as a credit against the tax liability for the following
23 5 taxable years or until it has been fully used, whichever
24 occurs first.
25 If an unused credit is carried forward to a given year
26 from 2 or more earlier years, that credit arising in the
27 earliest year will be applied first against the tax liability
28 for the given year. If a tax liability for the given year
29 still remains, the credit from the next earliest year will
30 then be applied, and so on, until all credits have been used
31 or no tax liability for the given year remains. Any
32 remaining unused credit or credits then will be carried
33 forward to the next following year in which a tax liability
34 is incurred, except that no credit can be carried forward to
-20- LRB9112999SMdvam04
1 a year which is more than 5 years after the year in which the
2 expense for which the credit is given was incurred.
3 Unless extended by law, the credit shall not include
4 costs incurred after December 31, 2004, except for costs
5 incurred pursuant to a binding contract entered into on or
6 before December 31, 2004.
7 No inference shall be drawn from this amendatory Act of
8 the 91st General Assembly in construing this Section for
9 taxable years beginning before January 1, 1999.
10 (l) Environmental Remediation Tax Credit.
11 (i) For tax years ending after December 31, 1997
12 and on or before December 31, 2001, a taxpayer shall be
13 allowed a credit against the tax imposed by subsections
14 (a) and (b) of this Section for certain amounts paid for
15 unreimbursed eligible remediation costs, as specified in
16 this subsection. For purposes of this Section,
17 "unreimbursed eligible remediation costs" means costs
18 approved by the Illinois Environmental Protection Agency
19 ("Agency") under Section 58.14 of the Environmental
20 Protection Act that were paid in performing environmental
21 remediation at a site for which a No Further Remediation
22 Letter was issued by the Agency and recorded under
23 Section 58.10 of the Environmental Protection Act. The
24 credit must be claimed for the taxable year in which
25 Agency approval of the eligible remediation costs is
26 granted. The credit is not available to any taxpayer if
27 the taxpayer or any related party caused or contributed
28 to, in any material respect, a release of regulated
29 substances on, in, or under the site that was identified
30 and addressed by the remedial action pursuant to the Site
31 Remediation Program of the Environmental Protection Act.
32 After the Pollution Control Board rules are adopted
33 pursuant to the Illinois Administrative Procedure Act for
34 the administration and enforcement of Section 58.9 of the
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1 Environmental Protection Act, determinations as to credit
2 availability for purposes of this Section shall be made
3 consistent with those rules. For purposes of this
4 Section, "taxpayer" includes a person whose tax
5 attributes the taxpayer has succeeded to under Section
6 381 of the Internal Revenue Code and "related party"
7 includes the persons disallowed a deduction for losses by
8 paragraphs (b), (c), and (f)(1) of Section 267 of the
9 Internal Revenue Code by virtue of being a related
10 taxpayer, as well as any of its partners. The credit
11 allowed against the tax imposed by subsections (a) and
12 (b) shall be equal to 25% of the unreimbursed eligible
13 remediation costs in excess of $100,000 per site, except
14 that the $100,000 threshold shall not apply to any site
15 contained in an enterprise zone as determined by the
16 Department of Commerce and Community Affairs. The total
17 credit allowed shall not exceed $40,000 per year with a
18 maximum total of $150,000 per site. For partners and
19 shareholders of subchapter S corporations, there shall be
20 allowed a credit under this subsection to be determined
21 in accordance with the determination of income and
22 distributive share of income under Sections 702 and 704
23 of subchapter S of the Internal Revenue Code.
24 (ii) A credit allowed under this subsection that is
25 unused in the year the credit is earned may be carried
26 forward to each of the 5 taxable years following the year
27 for which the credit is first earned until it is used.
28 The term "unused credit" does not include any amounts of
29 unreimbursed eligible remediation costs in excess of the
30 maximum credit per site authorized under paragraph (i).
31 This credit shall be applied first to the earliest year
32 for which there is a liability. If there is a credit
33 under this subsection from more than one tax year that is
34 available to offset a liability, the earliest credit
-22- LRB9112999SMdvam04
1 arising under this subsection shall be applied first. A
2 credit allowed under this subsection may be sold to a
3 buyer as part of a sale of all or part of the remediation
4 site for which the credit was granted. The purchaser of
5 a remediation site and the tax credit shall succeed to
6 the unused credit and remaining carry-forward period of
7 the seller. To perfect the transfer, the assignor shall
8 record the transfer in the chain of title for the site
9 and provide written notice to the Director of the
10 Illinois Department of Revenue of the assignor's intent
11 to sell the remediation site and the amount of the tax
12 credit to be transferred as a portion of the sale. In no
13 event may a credit be transferred to any taxpayer if the
14 taxpayer or a related party would not be eligible under
15 the provisions of subsection (i).
16 (iii) For purposes of this Section, the term "site"
17 shall have the same meaning as under Section 58.2 of the
18 Environmental Protection Act.
19 (m) Education expense credit.
20 Beginning with tax years ending after December 31, 1999,
21 a taxpayer who is the custodian of one or more qualifying
22 pupils shall be allowed a credit against the tax imposed by
23 subsections (a) and (b) of this Section for qualified
24 education expenses incurred on behalf of the qualifying
25 pupils. The credit shall be equal to 25% of qualified
26 education expenses, but in no event may the total credit
27 under this Section claimed by a family that is the custodian
28 of qualifying pupils exceed $500. In no event shall a credit
29 under this subsection reduce the taxpayer's liability under
30 this Act to less than zero. This subsection is exempt from
31 the provisions of Section 250 of this Act.
32 For purposes of this subsection;
33 "Qualifying pupils" means individuals who (i) are
34 residents of the State of Illinois, (ii) are under the age of
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1 21 at the close of the school year for which a credit is
2 sought, and (iii) during the school year for which a credit
3 is sought were full-time pupils enrolled in a kindergarten
4 through twelfth grade education program at any school, as
5 defined in this subsection.
6 "Qualified education expense" means the amount incurred
7 on behalf of a qualifying pupil in excess of $250 for
8 tuition, book fees, and lab fees at the school in which the
9 pupil is enrolled during the regular school year.
10 "School" means any public or nonpublic elementary or
11 secondary school in Illinois that is in compliance with Title
12 VI of the Civil Rights Act of 1964 and attendance at which
13 satisfies the requirements of Section 26-1 of the School
14 Code, except that nothing shall be construed to require a
15 child to attend any particular public or nonpublic school to
16 qualify for the credit under this Section.
17 "Custodian" means, with respect to qualifying pupils, an
18 Illinois resident who is a parent, the parents, a legal
19 guardian, or the legal guardians of the qualifying pupils.
20 (Source: P.A. 90-123, eff. 7-21-97; 90-458, eff. 8-17-97;
21 90-605, eff. 6-30-98; 90-655, eff. 7-30-98; 90-717, eff.
22 8-7-98; 90-792, eff. 1-1-99; 91-9, eff. 1-1-00; 91-357, eff.
23 7-29-99; 91-643, eff. 8-20-99; 91-644, eff. 8-20-99; revised
24 8-27-99.)
25 (35 ILCS 5/203) (from Ch. 120, par. 2-203)
26 Sec. 203. Base income defined.
27 (a) Individuals.
28 (1) In general. In the case of an individual, base
29 income means an amount equal to the taxpayer's adjusted
30 gross income for the taxable year as modified by
31 paragraph (2).
32 (2) Modifications. The adjusted gross income
33 referred to in paragraph (1) shall be modified by adding
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1 thereto the sum of the following amounts:
2 (A) An amount equal to all amounts paid or
3 accrued to the taxpayer as interest or dividends
4 during the taxable year to the extent excluded from
5 gross income in the computation of adjusted gross
6 income, except stock dividends of qualified public
7 utilities described in Section 305(e) of the
8 Internal Revenue Code;
9 (B) An amount equal to the amount of tax
10 imposed by this Act to the extent deducted from
11 gross income in the computation of adjusted gross
12 income for the taxable year;
13 (C) An amount equal to the amount received
14 during the taxable year as a recovery or refund of
15 real property taxes paid with respect to the
16 taxpayer's principal residence under the Revenue Act
17 of 1939 and for which a deduction was previously
18 taken under subparagraph (L) of this paragraph (2)
19 prior to July 1, 1991, the retrospective application
20 date of Article 4 of Public Act 87-17. In the case
21 of multi-unit or multi-use structures and farm
22 dwellings, the taxes on the taxpayer's principal
23 residence shall be that portion of the total taxes
24 for the entire property which is attributable to
25 such principal residence;
26 (D) An amount equal to the amount of the
27 capital gain deduction allowable under the Internal
28 Revenue Code, to the extent deducted from gross
29 income in the computation of adjusted gross income;
30 (D-5) An amount, to the extent not included in
31 adjusted gross income, equal to the amount of money
32 withdrawn by the taxpayer in the taxable year from a
33 medical care savings account and the interest earned
34 on the account in the taxable year of a withdrawal
-25- LRB9112999SMdvam04
1 pursuant to subsection (b) of Section 20 of the
2 Medical Care Savings Account Act; and
3 (D-10) For taxable years ending after December
4 31, 1997, an amount equal to any eligible
5 remediation costs that the individual deducted in
6 computing adjusted gross income and for which the
7 individual claims a credit under subsection (l) of
8 Section 201;
9 and by deducting from the total so obtained the sum of
10 the following amounts:
11 (E) Any amount included in such total in
12 respect of any compensation (including but not
13 limited to any compensation paid or accrued to a
14 serviceman while a prisoner of war or missing in
15 action) paid to a resident by reason of being on
16 active duty in the Armed Forces of the United States
17 and in respect of any compensation paid or accrued
18 to a resident who as a governmental employee was a
19 prisoner of war or missing in action, and in respect
20 of any compensation paid to a resident in 1971 or
21 thereafter for annual training performed pursuant to
22 Sections 502 and 503, Title 32, United States Code
23 as a member of the Illinois National Guard;
24 (F) An amount equal to all amounts included in
25 such total pursuant to the provisions of Sections
26 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
27 408 of the Internal Revenue Code, or included in
28 such total as distributions under the provisions of
29 any retirement or disability plan for employees of
30 any governmental agency or unit, or retirement
31 payments to retired partners, which payments are
32 excluded in computing net earnings from self
33 employment by Section 1402 of the Internal Revenue
34 Code and regulations adopted pursuant thereto;
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1 (G) The valuation limitation amount;
2 (H) An amount equal to the amount of any tax
3 imposed by this Act which was refunded to the
4 taxpayer and included in such total for the taxable
5 year;
6 (I) An amount equal to all amounts included in
7 such total pursuant to the provisions of Section 111
8 of the Internal Revenue Code as a recovery of items
9 previously deducted from adjusted gross income in
10 the computation of taxable income;
11 (J) An amount equal to those dividends
12 included in such total which were paid by a
13 corporation which conducts business operations in an
14 Enterprise Zone or zones created under the Illinois
15 Enterprise Zone Act, and conducts substantially all
16 of its operations in an Enterprise Zone or zones;
17 (K) An amount equal to those dividends
18 included in such total that were paid by a
19 corporation that conducts business operations in a
20 federally designated Foreign Trade Zone or Sub-Zone
21 and that is designated a High Impact Business
22 located in Illinois; provided that dividends
23 eligible for the deduction provided in subparagraph
24 (J) of paragraph (2) of this subsection shall not be
25 eligible for the deduction provided under this
26 subparagraph (K);
27 (L) For taxable years ending after December
28 31, 1983, an amount equal to all social security
29 benefits and railroad retirement benefits included
30 in such total pursuant to Sections 72(r) and 86 of
31 the Internal Revenue Code;
32 (M) With the exception of any amounts
33 subtracted under subparagraph (N), an amount equal
34 to the sum of all amounts disallowed as deductions
-27- LRB9112999SMdvam04
1 by (i) Sections 171(a) (2), and 265(2) of the
2 Internal Revenue Code of 1954, as now or hereafter
3 amended, and all amounts of expenses allocable to
4 interest and disallowed as deductions by Section
5 265(1) of the Internal Revenue Code of 1954, as now
6 or hereafter amended; and (ii) for taxable years
7 ending on or after August 13, 1999 the effective
8 date of this amendatory Act of the 91st General
9 Assembly, Sections 171(a)(2), 265, 280C, and
10 832(b)(5)(B)(i) of the Internal Revenue Code; the
11 provisions of this subparagraph are exempt from the
12 provisions of Section 250;
13 (N) An amount equal to all amounts included in
14 such total which are exempt from taxation by this
15 State either by reason of its statutes or
16 Constitution or by reason of the Constitution,
17 treaties or statutes of the United States; provided
18 that, in the case of any statute of this State that
19 exempts income derived from bonds or other
20 obligations from the tax imposed under this Act, the
21 amount exempted shall be the interest net of bond
22 premium amortization;
23 (O) An amount equal to any contribution made
24 to a job training project established pursuant to
25 the Tax Increment Allocation Redevelopment Act;
26 (P) An amount equal to the amount of the
27 deduction used to compute the federal income tax
28 credit for restoration of substantial amounts held
29 under claim of right for the taxable year pursuant
30 to Section 1341 of the Internal Revenue Code of
31 1986;
32 (Q) An amount equal to any amounts included in
33 such total, received by the taxpayer as an
34 acceleration in the payment of life, endowment or
-28- LRB9112999SMdvam04
1 annuity benefits in advance of the time they would
2 otherwise be payable as an indemnity for a terminal
3 illness;
4 (R) An amount equal to the amount of any
5 federal or State bonus paid to veterans of the
6 Persian Gulf War;
7 (S) An amount, to the extent included in
8 adjusted gross income, equal to the amount of a
9 contribution made in the taxable year on behalf of
10 the taxpayer to a medical care savings account
11 established under the Medical Care Savings Account
12 Act to the extent the contribution is accepted by
13 the account administrator as provided in that Act;
14 (T) An amount, to the extent included in
15 adjusted gross income, equal to the amount of
16 interest earned in the taxable year on a medical
17 care savings account established under the Medical
18 Care Savings Account Act on behalf of the taxpayer,
19 other than interest added pursuant to item (D-5) of
20 this paragraph (2);
21 (U) For one taxable year beginning on or after
22 January 1, 1994, an amount equal to the total amount
23 of tax imposed and paid under subsections (a) and
24 (b) of Section 201 of this Act on grant amounts
25 received by the taxpayer under the Nursing Home
26 Grant Assistance Act during the taxpayer's taxable
27 years 1992 and 1993;
28 (V) Beginning with tax years ending on or
29 after December 31, 1995 and ending with tax years
30 ending on or before December 31, 2004, an amount
31 equal to the amount paid by a taxpayer who is a
32 self-employed taxpayer, a partner of a partnership,
33 or a shareholder in a Subchapter S corporation for
34 health insurance or long-term care insurance for
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1 that taxpayer or that taxpayer's spouse or
2 dependents, to the extent that the amount paid for
3 that health insurance or long-term care insurance
4 may be deducted under Section 213 of the Internal
5 Revenue Code of 1986, has not been deducted on the
6 federal income tax return of the taxpayer, and does
7 not exceed the taxable income attributable to that
8 taxpayer's income, self-employment income, or
9 Subchapter S corporation income; except that no
10 deduction shall be allowed under this item (V) if
11 the taxpayer is eligible to participate in any
12 health insurance or long-term care insurance plan of
13 an employer of the taxpayer or the taxpayer's
14 spouse. The amount of the health insurance and
15 long-term care insurance subtracted under this item
16 (V) shall be determined by multiplying total health
17 insurance and long-term care insurance premiums paid
18 by the taxpayer times a number that represents the
19 fractional percentage of eligible medical expenses
20 under Section 213 of the Internal Revenue Code of
21 1986 not actually deducted on the taxpayer's federal
22 income tax return;
23 (W) For taxable years beginning on or after
24 January 1, 1998, all amounts included in the
25 taxpayer's federal gross income in the taxable year
26 from amounts converted from a regular IRA to a Roth
27 IRA. This paragraph is exempt from the provisions of
28 Section 250; and
29 (X) For taxable year 1999 and thereafter, an
30 amount equal to the amount of any (i) distributions,
31 to the extent includible in gross income for federal
32 income tax purposes, made to the taxpayer because of
33 his or her status as a victim of persecution for
34 racial or religious reasons by Nazi Germany or any
-30- LRB9112999SMdvam04
1 other Axis regime or as an heir of the victim and
2 (ii) items of income, to the extent includible in
3 gross income for federal income tax purposes,
4 attributable to, derived from or in any way related
5 to assets stolen from, hidden from, or otherwise
6 lost to a victim of persecution for racial or
7 religious reasons by Nazi Germany or any other Axis
8 regime immediately prior to, during, and immediately
9 after World War II, including, but not limited to,
10 interest on the proceeds receivable as insurance
11 under policies issued to a victim of persecution for
12 racial or religious reasons by Nazi Germany or any
13 other Axis regime by European insurance companies
14 immediately prior to and during World War II;
15 provided, however, this subtraction from federal
16 adjusted gross income does not apply to assets
17 acquired with such assets or with the proceeds from
18 the sale of such assets; provided, further, this
19 paragraph shall only apply to a taxpayer who was the
20 first recipient of such assets after their recovery
21 and who is a victim of persecution for racial or
22 religious reasons by Nazi Germany or any other Axis
23 regime or as an heir of the victim. The amount of
24 and the eligibility for any public assistance,
25 benefit, or similar entitlement is not affected by
26 the inclusion of items (i) and (ii) of this
27 paragraph in gross income for federal income tax
28 purposes. This paragraph is exempt from the
29 provisions of Section 250.
30 (b) Corporations.
31 (1) In general. In the case of a corporation, base
32 income means an amount equal to the taxpayer's taxable
33 income for the taxable year as modified by paragraph (2).
34 (2) Modifications. The taxable income referred to
-31- LRB9112999SMdvam04
1 in paragraph (1) shall be modified by adding thereto the
2 sum of the following amounts:
3 (A) An amount equal to all amounts paid or
4 accrued to the taxpayer as interest and all
5 distributions received from regulated investment
6 companies during the taxable year to the extent
7 excluded from gross income in the computation of
8 taxable income;
9 (B) An amount equal to the amount of tax
10 imposed by this Act to the extent deducted from
11 gross income in the computation of taxable income
12 for the taxable year;
13 (C) In the case of a regulated investment
14 company, an amount equal to the excess of (i) the
15 net long-term capital gain for the taxable year,
16 over (ii) the amount of the capital gain dividends
17 designated as such in accordance with Section
18 852(b)(3)(C) of the Internal Revenue Code and any
19 amount designated under Section 852(b)(3)(D) of the
20 Internal Revenue Code, attributable to the taxable
21 year (this amendatory Act of 1995 (Public Act 89-89)
22 is declarative of existing law and is not a new
23 enactment);
24 (D) The amount of any net operating loss
25 deduction taken in arriving at taxable income, other
26 than a net operating loss carried forward from a
27 taxable year ending prior to December 31, 1986;
28 (E) For taxable years in which a net operating
29 loss carryback or carryforward from a taxable year
30 ending prior to December 31, 1986 is an element of
31 taxable income under paragraph (1) of subsection (e)
32 or subparagraph (E) of paragraph (2) of subsection
33 (e), the amount by which addition modifications
34 other than those provided by this subparagraph (E)
-32- LRB9112999SMdvam04
1 exceeded subtraction modifications in such earlier
2 taxable year, with the following limitations applied
3 in the order that they are listed:
4 (i) the addition modification relating to
5 the net operating loss carried back or forward
6 to the taxable year from any taxable year
7 ending prior to December 31, 1986 shall be
8 reduced by the amount of addition modification
9 under this subparagraph (E) which related to
10 that net operating loss and which was taken
11 into account in calculating the base income of
12 an earlier taxable year, and
13 (ii) the addition modification relating
14 to the net operating loss carried back or
15 forward to the taxable year from any taxable
16 year ending prior to December 31, 1986 shall
17 not exceed the amount of such carryback or
18 carryforward;
19 For taxable years in which there is a net
20 operating loss carryback or carryforward from more
21 than one other taxable year ending prior to December
22 31, 1986, the addition modification provided in this
23 subparagraph (E) shall be the sum of the amounts
24 computed independently under the preceding
25 provisions of this subparagraph (E) for each such
26 taxable year; and
27 (E-5) For taxable years ending after December
28 31, 1997, an amount equal to any eligible
29 remediation costs that the corporation deducted in
30 computing adjusted gross income and for which the
31 corporation claims a credit under subsection (l) of
32 Section 201;
33 and by deducting from the total so obtained the sum of
34 the following amounts:
-33- LRB9112999SMdvam04
1 (F) An amount equal to the amount of any tax
2 imposed by this Act which was refunded to the
3 taxpayer and included in such total for the taxable
4 year;
5 (G) An amount equal to any amount included in
6 such total under Section 78 of the Internal Revenue
7 Code;
8 (H) In the case of a regulated investment
9 company, an amount equal to the amount of exempt
10 interest dividends as defined in subsection (b) (5)
11 of Section 852 of the Internal Revenue Code, paid to
12 shareholders for the taxable year;
13 (I) With the exception of any amounts
14 subtracted under subparagraph (J), an amount equal
15 to the sum of all amounts disallowed as deductions
16 by (i) Sections 171(a) (2), and 265(a)(2) and
17 amounts disallowed as interest expense by Section
18 291(a)(3) of the Internal Revenue Code, as now or
19 hereafter amended, and all amounts of expenses
20 allocable to interest and disallowed as deductions
21 by Section 265(a)(1) of the Internal Revenue Code,
22 as now or hereafter amended; and (ii) for taxable
23 years ending on or after August 13, 1999 the
24 effective date of this amendatory Act of the 91st
25 General Assembly, Sections 171(a)(2), 265, 280C,
26 291(a)(3), and 832(b)(5)(B)(i) of the Internal
27 Revenue Code; the provisions of this subparagraph
28 are exempt from the provisions of Section 250;
29 (J) An amount equal to all amounts included in
30 such total which are exempt from taxation by this
31 State either by reason of its statutes or
32 Constitution or by reason of the Constitution,
33 treaties or statutes of the United States; provided
34 that, in the case of any statute of this State that
-34- LRB9112999SMdvam04
1 exempts income derived from bonds or other
2 obligations from the tax imposed under this Act, the
3 amount exempted shall be the interest net of bond
4 premium amortization;
5 (K) An amount equal to those dividends
6 included in such total which were paid by a
7 corporation which conducts business operations in an
8 Enterprise Zone or zones created under the Illinois
9 Enterprise Zone Act and conducts substantially all
10 of its operations in an Enterprise Zone or zones;
11 (L) An amount equal to those dividends
12 included in such total that were paid by a
13 corporation that conducts business operations in a
14 federally designated Foreign Trade Zone or Sub-Zone
15 and that is designated a High Impact Business
16 located in Illinois; provided that dividends
17 eligible for the deduction provided in subparagraph
18 (K) of paragraph 2 of this subsection shall not be
19 eligible for the deduction provided under this
20 subparagraph (L);
21 (M) For any taxpayer that is a financial
22 organization within the meaning of Section 304(c) of
23 this Act, an amount included in such total as
24 interest income from a loan or loans made by such
25 taxpayer to a borrower, to the extent that such a
26 loan is secured by property which is eligible for
27 the Enterprise Zone Investment Credit. To determine
28 the portion of a loan or loans that is secured by
29 property eligible for a Section 201(h) investment
30 credit to the borrower, the entire principal amount
31 of the loan or loans between the taxpayer and the
32 borrower should be divided into the basis of the
33 Section 201(h) investment credit property which
34 secures the loan or loans, using for this purpose
-35- LRB9112999SMdvam04
1 the original basis of such property on the date that
2 it was placed in service in the Enterprise Zone.
3 The subtraction modification available to taxpayer
4 in any year under this subsection shall be that
5 portion of the total interest paid by the borrower
6 with respect to such loan attributable to the
7 eligible property as calculated under the previous
8 sentence;
9 (M-1) For any taxpayer that is a financial
10 organization within the meaning of Section 304(c) of
11 this Act, an amount included in such total as
12 interest income from a loan or loans made by such
13 taxpayer to a borrower, to the extent that such a
14 loan is secured by property which is eligible for
15 the High Impact Business Investment Credit. To
16 determine the portion of a loan or loans that is
17 secured by property eligible for a Section 201(i)
18 investment credit to the borrower, the entire
19 principal amount of the loan or loans between the
20 taxpayer and the borrower should be divided into the
21 basis of the Section 201(i) investment credit
22 property which secures the loan or loans, using for
23 this purpose the original basis of such property on
24 the date that it was placed in service in a
25 federally designated Foreign Trade Zone or Sub-Zone
26 located in Illinois. No taxpayer that is eligible
27 for the deduction provided in subparagraph (M) of
28 paragraph (2) of this subsection shall be eligible
29 for the deduction provided under this subparagraph
30 (M-1). The subtraction modification available to
31 taxpayers in any year under this subsection shall be
32 that portion of the total interest paid by the
33 borrower with respect to such loan attributable to
34 the eligible property as calculated under the
-36- LRB9112999SMdvam04
1 previous sentence;
2 (N) Two times any contribution made during the
3 taxable year to a designated zone organization to
4 the extent that the contribution (i) qualifies as a
5 charitable contribution under subsection (c) of
6 Section 170 of the Internal Revenue Code and (ii)
7 must, by its terms, be used for a project approved
8 by the Department of Commerce and Community Affairs
9 under Section 11 of the Illinois Enterprise Zone
10 Act;
11 (O) An amount equal to: (i) 85% for taxable
12 years ending on or before December 31, 1992, or, a
13 percentage equal to the percentage allowable under
14 Section 243(a)(1) of the Internal Revenue Code of
15 1986 for taxable years ending after December 31,
16 1992, of the amount by which dividends included in
17 taxable income and received from a corporation that
18 is not created or organized under the laws of the
19 United States or any state or political subdivision
20 thereof, including, for taxable years ending on or
21 after December 31, 1988, dividends received or
22 deemed received or paid or deemed paid under
23 Sections 951 through 964 of the Internal Revenue
24 Code, exceed the amount of the modification provided
25 under subparagraph (G) of paragraph (2) of this
26 subsection (b) which is related to such dividends;
27 plus (ii) 100% of the amount by which dividends,
28 included in taxable income and received, including,
29 for taxable years ending on or after December 31,
30 1988, dividends received or deemed received or paid
31 or deemed paid under Sections 951 through 964 of the
32 Internal Revenue Code, from any such corporation
33 specified in clause (i) that would but for the
34 provisions of Section 1504 (b) (3) of the Internal
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1 Revenue Code be treated as a member of the
2 affiliated group which includes the dividend
3 recipient, exceed the amount of the modification
4 provided under subparagraph (G) of paragraph (2) of
5 this subsection (b) which is related to such
6 dividends;
7 (P) An amount equal to any contribution made
8 to a job training project established pursuant to
9 the Tax Increment Allocation Redevelopment Act;
10 (Q) An amount equal to the amount of the
11 deduction used to compute the federal income tax
12 credit for restoration of substantial amounts held
13 under claim of right for the taxable year pursuant
14 to Section 1341 of the Internal Revenue Code of
15 1986; and
16 (R) In the case of an attorney-in-fact with
17 respect to whom an interinsurer or a reciprocal
18 insurer has made the election under Section 835 of
19 the Internal Revenue Code, 26 U.S.C. 835, an amount
20 equal to the excess, if any, of the amounts paid or
21 incurred by that interinsurer or reciprocal insurer
22 in the taxable year to the attorney-in-fact over the
23 deduction allowed to that interinsurer or reciprocal
24 insurer with respect to the attorney-in-fact under
25 Section 835(b) of the Internal Revenue Code for the
26 taxable year; and
27 (S) For taxable years ending on or after
28 December 31, 1997, in the case of a Subchapter S
29 corporation, an amount equal to all amounts of
30 income allocable to a shareholder subject to the
31 Personal Property Tax Replacement Income Tax imposed
32 by subsections (c) and (d) of Section 201 of this
33 Act, including amounts allocable to organizations
34 exempt from federal income tax by reason of Section
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1 501(a) of the Internal Revenue Code. This
2 subparagraph (S) is exempt from the provisions of
3 Section 250.
4 (3) Special rule. For purposes of paragraph (2)
5 (A), "gross income" in the case of a life insurance
6 company, for tax years ending on and after December 31,
7 1994, shall mean the gross investment income for the
8 taxable year.
9 (c) Trusts and estates.
10 (1) In general. In the case of a trust or estate,
11 base income means an amount equal to the taxpayer's
12 taxable income for the taxable year as modified by
13 paragraph (2).
14 (2) Modifications. Subject to the provisions of
15 paragraph (3), the taxable income referred to in
16 paragraph (1) shall be modified by adding thereto the sum
17 of the following amounts:
18 (A) An amount equal to all amounts paid or
19 accrued to the taxpayer as interest or dividends
20 during the taxable year to the extent excluded from
21 gross income in the computation of taxable income;
22 (B) In the case of (i) an estate, $600; (ii) a
23 trust which, under its governing instrument, is
24 required to distribute all of its income currently,
25 $300; and (iii) any other trust, $100, but in each
26 such case, only to the extent such amount was
27 deducted in the computation of taxable income;
28 (C) An amount equal to the amount of tax
29 imposed by this Act to the extent deducted from
30 gross income in the computation of taxable income
31 for the taxable year;
32 (D) The amount of any net operating loss
33 deduction taken in arriving at taxable income, other
34 than a net operating loss carried forward from a
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1 taxable year ending prior to December 31, 1986;
2 (E) For taxable years in which a net operating
3 loss carryback or carryforward from a taxable year
4 ending prior to December 31, 1986 is an element of
5 taxable income under paragraph (1) of subsection (e)
6 or subparagraph (E) of paragraph (2) of subsection
7 (e), the amount by which addition modifications
8 other than those provided by this subparagraph (E)
9 exceeded subtraction modifications in such taxable
10 year, with the following limitations applied in the
11 order that they are listed:
12 (i) the addition modification relating to
13 the net operating loss carried back or forward
14 to the taxable year from any taxable year
15 ending prior to December 31, 1986 shall be
16 reduced by the amount of addition modification
17 under this subparagraph (E) which related to
18 that net operating loss and which was taken
19 into account in calculating the base income of
20 an earlier taxable year, and
21 (ii) the addition modification relating
22 to the net operating loss carried back or
23 forward to the taxable year from any taxable
24 year ending prior to December 31, 1986 shall
25 not exceed the amount of such carryback or
26 carryforward;
27 For taxable years in which there is a net
28 operating loss carryback or carryforward from more
29 than one other taxable year ending prior to December
30 31, 1986, the addition modification provided in this
31 subparagraph (E) shall be the sum of the amounts
32 computed independently under the preceding
33 provisions of this subparagraph (E) for each such
34 taxable year;
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1 (F) For taxable years ending on or after
2 January 1, 1989, an amount equal to the tax deducted
3 pursuant to Section 164 of the Internal Revenue Code
4 if the trust or estate is claiming the same tax for
5 purposes of the Illinois foreign tax credit under
6 Section 601 of this Act;
7 (G) An amount equal to the amount of the
8 capital gain deduction allowable under the Internal
9 Revenue Code, to the extent deducted from gross
10 income in the computation of taxable income; and
11 (G-5) For taxable years ending after December
12 31, 1997, an amount equal to any eligible
13 remediation costs that the trust or estate deducted
14 in computing adjusted gross income and for which the
15 trust or estate claims a credit under subsection (l)
16 of Section 201;
17 and by deducting from the total so obtained the sum of
18 the following amounts:
19 (H) An amount equal to all amounts included in
20 such total pursuant to the provisions of Sections
21 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and
22 408 of the Internal Revenue Code or included in such
23 total as distributions under the provisions of any
24 retirement or disability plan for employees of any
25 governmental agency or unit, or retirement payments
26 to retired partners, which payments are excluded in
27 computing net earnings from self employment by
28 Section 1402 of the Internal Revenue Code and
29 regulations adopted pursuant thereto;
30 (I) The valuation limitation amount;
31 (J) An amount equal to the amount of any tax
32 imposed by this Act which was refunded to the
33 taxpayer and included in such total for the taxable
34 year;
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1 (K) An amount equal to all amounts included in
2 taxable income as modified by subparagraphs (A),
3 (B), (C), (D), (E), (F) and (G) which are exempt
4 from taxation by this State either by reason of its
5 statutes or Constitution or by reason of the
6 Constitution, treaties or statutes of the United
7 States; provided that, in the case of any statute of
8 this State that exempts income derived from bonds or
9 other obligations from the tax imposed under this
10 Act, the amount exempted shall be the interest net
11 of bond premium amortization;
12 (L) With the exception of any amounts
13 subtracted under subparagraph (K), an amount equal
14 to the sum of all amounts disallowed as deductions
15 by (i) Sections 171(a) (2) and 265(a)(2) of the
16 Internal Revenue Code, as now or hereafter amended,
17 and all amounts of expenses allocable to interest
18 and disallowed as deductions by Section 265(1) of
19 the Internal Revenue Code of 1954, as now or
20 hereafter amended; and (ii) for taxable years ending
21 on or after August 13, 1999 the effective date of
22 this amendatory Act of the 91st General Assembly,
23 Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i)
24 of the Internal Revenue Code; the provisions of this
25 subparagraph are exempt from the provisions of
26 Section 250;
27 (M) An amount equal to those dividends
28 included in such total which were paid by a
29 corporation which conducts business operations in an
30 Enterprise Zone or zones created under the Illinois
31 Enterprise Zone Act and conducts substantially all
32 of its operations in an Enterprise Zone or Zones;
33 (N) An amount equal to any contribution made
34 to a job training project established pursuant to
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1 the Tax Increment Allocation Redevelopment Act;
2 (O) An amount equal to those dividends
3 included in such total that were paid by a
4 corporation that conducts business operations in a
5 federally designated Foreign Trade Zone or Sub-Zone
6 and that is designated a High Impact Business
7 located in Illinois; provided that dividends
8 eligible for the deduction provided in subparagraph
9 (M) of paragraph (2) of this subsection shall not be
10 eligible for the deduction provided under this
11 subparagraph (O);
12 (P) An amount equal to the amount of the
13 deduction used to compute the federal income tax
14 credit for restoration of substantial amounts held
15 under claim of right for the taxable year pursuant
16 to Section 1341 of the Internal Revenue Code of
17 1986; and
18 (Q) For taxable year 1999 and thereafter, an
19 amount equal to the amount of any (i) distributions,
20 to the extent includible in gross income for federal
21 income tax purposes, made to the taxpayer because of
22 his or her status as a victim of persecution for
23 racial or religious reasons by Nazi Germany or any
24 other Axis regime or as an heir of the victim and
25 (ii) items of income, to the extent includible in
26 gross income for federal income tax purposes,
27 attributable to, derived from or in any way related
28 to assets stolen from, hidden from, or otherwise
29 lost to a victim of persecution for racial or
30 religious reasons by Nazi Germany or any other Axis
31 regime immediately prior to, during, and immediately
32 after World War II, including, but not limited to,
33 interest on the proceeds receivable as insurance
34 under policies issued to a victim of persecution for
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1 racial or religious reasons by Nazi Germany or any
2 other Axis regime by European insurance companies
3 immediately prior to and during World War II;
4 provided, however, this subtraction from federal
5 adjusted gross income does not apply to assets
6 acquired with such assets or with the proceeds from
7 the sale of such assets; provided, further, this
8 paragraph shall only apply to a taxpayer who was the
9 first recipient of such assets after their recovery
10 and who is a victim of persecution for racial or
11 religious reasons by Nazi Germany or any other Axis
12 regime or as an heir of the victim. The amount of
13 and the eligibility for any public assistance,
14 benefit, or similar entitlement is not affected by
15 the inclusion of items (i) and (ii) of this
16 paragraph in gross income for federal income tax
17 purposes. This paragraph is exempt from the
18 provisions of Section 250.
19 (3) Limitation. The amount of any modification
20 otherwise required under this subsection shall, under
21 regulations prescribed by the Department, be adjusted by
22 any amounts included therein which were properly paid,
23 credited, or required to be distributed, or permanently
24 set aside for charitable purposes pursuant to Internal
25 Revenue Code Section 642(c) during the taxable year.
26 (d) Partnerships.
27 (1) In general. In the case of a partnership, base
28 income means an amount equal to the taxpayer's taxable
29 income for the taxable year as modified by paragraph (2).
30 (2) Modifications. The taxable income referred to
31 in paragraph (1) shall be modified by adding thereto the
32 sum of the following amounts:
33 (A) An amount equal to all amounts paid or
34 accrued to the taxpayer as interest or dividends
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1 during the taxable year to the extent excluded from
2 gross income in the computation of taxable income;
3 (B) An amount equal to the amount of tax
4 imposed by this Act to the extent deducted from
5 gross income for the taxable year;
6 (C) The amount of deductions allowed to the
7 partnership pursuant to Section 707 (c) of the
8 Internal Revenue Code in calculating its taxable
9 income; and
10 (D) An amount equal to the amount of the
11 capital gain deduction allowable under the Internal
12 Revenue Code, to the extent deducted from gross
13 income in the computation of taxable income;
14 and by deducting from the total so obtained the following
15 amounts:
16 (E) The valuation limitation amount;
17 (F) An amount equal to the amount of any tax
18 imposed by this Act which was refunded to the
19 taxpayer and included in such total for the taxable
20 year;
21 (G) An amount equal to all amounts included in
22 taxable income as modified by subparagraphs (A),
23 (B), (C) and (D) which are exempt from taxation by
24 this State either by reason of its statutes or
25 Constitution or by reason of the Constitution,
26 treaties or statutes of the United States; provided
27 that, in the case of any statute of this State that
28 exempts income derived from bonds or other
29 obligations from the tax imposed under this Act, the
30 amount exempted shall be the interest net of bond
31 premium amortization;
32 (H) Any income of the partnership which
33 constitutes personal service income as defined in
34 Section 1348 (b) (1) of the Internal Revenue Code
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1 (as in effect December 31, 1981) or a reasonable
2 allowance for compensation paid or accrued for
3 services rendered by partners to the partnership,
4 whichever is greater;
5 (I) An amount equal to all amounts of income
6 distributable to an entity subject to the Personal
7 Property Tax Replacement Income Tax imposed by
8 subsections (c) and (d) of Section 201 of this Act
9 including amounts distributable to organizations
10 exempt from federal income tax by reason of Section
11 501(a) of the Internal Revenue Code;
12 (J) With the exception of any amounts
13 subtracted under subparagraph (G), an amount equal
14 to the sum of all amounts disallowed as deductions
15 by (i) Sections 171(a) (2), and 265(2) of the
16 Internal Revenue Code of 1954, as now or hereafter
17 amended, and all amounts of expenses allocable to
18 interest and disallowed as deductions by Section
19 265(1) of the Internal Revenue Code, as now or
20 hereafter amended; and (ii) for taxable years ending
21 on or after August 13, 1999 the effective date of
22 this amendatory Act of the 91st General Assembly,
23 Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i)
24 of the Internal Revenue Code; the provisions of this
25 subparagraph are exempt from the provisions of
26 Section 250;
27 (K) An amount equal to those dividends
28 included in such total which were paid by a
29 corporation which conducts business operations in an
30 Enterprise Zone or zones created under the Illinois
31 Enterprise Zone Act, enacted by the 82nd General
32 Assembly, and which does not conduct such operations
33 other than in an Enterprise Zone or Zones;
34 (L) An amount equal to any contribution made
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1 to a job training project established pursuant to
2 the Real Property Tax Increment Allocation
3 Redevelopment Act;
4 (M) An amount equal to those dividends
5 included in such total that were paid by a
6 corporation that conducts business operations in a
7 federally designated Foreign Trade Zone or Sub-Zone
8 and that is designated a High Impact Business
9 located in Illinois; provided that dividends
10 eligible for the deduction provided in subparagraph
11 (K) of paragraph (2) of this subsection shall not be
12 eligible for the deduction provided under this
13 subparagraph (M); and
14 (N) An amount equal to the amount of the
15 deduction used to compute the federal income tax
16 credit for restoration of substantial amounts held
17 under claim of right for the taxable year pursuant
18 to Section 1341 of the Internal Revenue Code of
19 1986.
20 (e) Gross income; adjusted gross income; taxable income.
21 (1) In general. Subject to the provisions of
22 paragraph (2) and subsection (b) (3), for purposes of
23 this Section and Section 803(e), a taxpayer's gross
24 income, adjusted gross income, or taxable income for the
25 taxable year shall mean the amount of gross income,
26 adjusted gross income or taxable income properly
27 reportable for federal income tax purposes for the
28 taxable year under the provisions of the Internal Revenue
29 Code. Taxable income may be less than zero. However, for
30 taxable years ending on or after December 31, 1986, net
31 operating loss carryforwards from taxable years ending
32 prior to December 31, 1986, may not exceed the sum of
33 federal taxable income for the taxable year before net
34 operating loss deduction, plus the excess of addition
-47- LRB9112999SMdvam04
1 modifications over subtraction modifications for the
2 taxable year. For taxable years ending prior to December
3 31, 1986, taxable income may never be an amount in excess
4 of the net operating loss for the taxable year as defined
5 in subsections (c) and (d) of Section 172 of the Internal
6 Revenue Code, provided that when taxable income of a
7 corporation (other than a Subchapter S corporation),
8 trust, or estate is less than zero and addition
9 modifications, other than those provided by subparagraph
10 (E) of paragraph (2) of subsection (b) for corporations
11 or subparagraph (E) of paragraph (2) of subsection (c)
12 for trusts and estates, exceed subtraction modifications,
13 an addition modification must be made under those
14 subparagraphs for any other taxable year to which the
15 taxable income less than zero (net operating loss) is
16 applied under Section 172 of the Internal Revenue Code or
17 under subparagraph (E) of paragraph (2) of this
18 subsection (e) applied in conjunction with Section 172 of
19 the Internal Revenue Code.
20 (2) Special rule. For purposes of paragraph (1) of
21 this subsection, the taxable income properly reportable
22 for federal income tax purposes shall mean:
23 (A) Certain life insurance companies. In the
24 case of a life insurance company subject to the tax
25 imposed by Section 801 of the Internal Revenue Code,
26 life insurance company taxable income, plus the
27 amount of distribution from pre-1984 policyholder
28 surplus accounts as calculated under Section 815a of
29 the Internal Revenue Code;
30 (B) Certain other insurance companies. In the
31 case of mutual insurance companies subject to the
32 tax imposed by Section 831 of the Internal Revenue
33 Code, insurance company taxable income;
34 (C) Regulated investment companies. In the
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1 case of a regulated investment company subject to
2 the tax imposed by Section 852 of the Internal
3 Revenue Code, investment company taxable income;
4 (D) Real estate investment trusts. In the
5 case of a real estate investment trust subject to
6 the tax imposed by Section 857 of the Internal
7 Revenue Code, real estate investment trust taxable
8 income;
9 (E) Consolidated corporations. In the case of
10 a corporation which is a member of an affiliated
11 group of corporations filing a consolidated income
12 tax return for the taxable year for federal income
13 tax purposes, taxable income determined as if such
14 corporation had filed a separate return for federal
15 income tax purposes for the taxable year and each
16 preceding taxable year for which it was a member of
17 an affiliated group. For purposes of this
18 subparagraph, the taxpayer's separate taxable income
19 shall be determined as if the election provided by
20 Section 243(b) (2) of the Internal Revenue Code had
21 been in effect for all such years;
22 (F) Cooperatives. In the case of a
23 cooperative corporation or association, the taxable
24 income of such organization determined in accordance
25 with the provisions of Section 1381 through 1388 of
26 the Internal Revenue Code;
27 (G) Subchapter S corporations. In the case
28 of: (i) a Subchapter S corporation for which there
29 is in effect an election for the taxable year under
30 Section 1362 of the Internal Revenue Code, the
31 taxable income of such corporation determined in
32 accordance with Section 1363(b) of the Internal
33 Revenue Code, except that taxable income shall take
34 into account those items which are required by
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1 Section 1363(b)(1) of the Internal Revenue Code to
2 be separately stated; and (ii) a Subchapter S
3 corporation for which there is in effect a federal
4 election to opt out of the provisions of the
5 Subchapter S Revision Act of 1982 and have applied
6 instead the prior federal Subchapter S rules as in
7 effect on July 1, 1982, the taxable income of such
8 corporation determined in accordance with the
9 federal Subchapter S rules as in effect on July 1,
10 1982; and
11 (H) Partnerships. In the case of a
12 partnership, taxable income determined in accordance
13 with Section 703 of the Internal Revenue Code,
14 except that taxable income shall take into account
15 those items which are required by Section 703(a)(1)
16 to be separately stated but which would be taken
17 into account by an individual in calculating his
18 taxable income.
19 (f) Valuation limitation amount.
20 (1) In general. The valuation limitation amount
21 referred to in subsections (a) (2) (G), (c) (2) (I) and
22 (d)(2) (E) is an amount equal to:
23 (A) The sum of the pre-August 1, 1969
24 appreciation amounts (to the extent consisting of
25 gain reportable under the provisions of Section 1245
26 or 1250 of the Internal Revenue Code) for all
27 property in respect of which such gain was reported
28 for the taxable year; plus
29 (B) The lesser of (i) the sum of the
30 pre-August 1, 1969 appreciation amounts (to the
31 extent consisting of capital gain) for all property
32 in respect of which such gain was reported for
33 federal income tax purposes for the taxable year, or
34 (ii) the net capital gain for the taxable year,
-50- LRB9112999SMdvam04
1 reduced in either case by any amount of such gain
2 included in the amount determined under subsection
3 (a) (2) (F) or (c) (2) (H).
4 (2) Pre-August 1, 1969 appreciation amount.
5 (A) If the fair market value of property
6 referred to in paragraph (1) was readily
7 ascertainable on August 1, 1969, the pre-August 1,
8 1969 appreciation amount for such property is the
9 lesser of (i) the excess of such fair market value
10 over the taxpayer's basis (for determining gain) for
11 such property on that date (determined under the
12 Internal Revenue Code as in effect on that date), or
13 (ii) the total gain realized and reportable for
14 federal income tax purposes in respect of the sale,
15 exchange or other disposition of such property.
16 (B) If the fair market value of property
17 referred to in paragraph (1) was not readily
18 ascertainable on August 1, 1969, the pre-August 1,
19 1969 appreciation amount for such property is that
20 amount which bears the same ratio to the total gain
21 reported in respect of the property for federal
22 income tax purposes for the taxable year, as the
23 number of full calendar months in that part of the
24 taxpayer's holding period for the property ending
25 July 31, 1969 bears to the number of full calendar
26 months in the taxpayer's entire holding period for
27 the property.
28 (C) The Department shall prescribe such
29 regulations as may be necessary to carry out the
30 purposes of this paragraph.
31 (g) Double deductions. Unless specifically provided
32 otherwise, nothing in this Section shall permit the same item
33 to be deducted more than once.
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1 (h) Legislative intention. Except as expressly provided
2 by this Section there shall be no modifications or
3 limitations on the amounts of income, gain, loss or deduction
4 taken into account in determining gross income, adjusted
5 gross income or taxable income for federal income tax
6 purposes for the taxable year, or in the amount of such items
7 entering into the computation of base income and net income
8 under this Act for such taxable year, whether in respect of
9 property values as of August 1, 1969 or otherwise.
10 (Source: P.A. 90-491, eff. 1-1-98; 90-717, eff. 8-7-98;
11 90-770, eff. 8-14-98; 91-192, eff. 7-20-99; 91-205, eff.
12 7-20-99; 91-357, eff. 7-29-99; 91-541, eff. 8-13-99; 91-676,
13 eff. 12-23-99; revised 1-5-00.)
14 (35 ILCS 5/405)
15 Sec. 405. Carryovers in certain acquisitions.
16 (a) In the case of the acquisition of assets of a
17 corporation by another corporation described in Section
18 381(a) of the Internal Revenue Code, the acquiring
19 corporation shall succeed to and take into account, as of the
20 close of the day of distribution or transfer, all Article 2
21 credits and net losses under Section 207 of the corporation
22 from which the assets were where acquired, without limitation
23 under Section 382 of the Internal Revenue Code or the
24 separate return limitation year regulations promulgated under
25 Section 1502 of the Internal Revenue Code.
26 (b) In the case of the acquisition of assets of a
27 partnership by another partnership in a transaction in which
28 the acquiring partnership is considered to be a continuation
29 of the partnership from which the assets were acquired under
30 the provisions of Section 708 of the Internal Revenue Code
31 and any regulations promulgated under that Section, the
32 acquiring partnership shall succeed to and take into account,
33 as of the close of the day of distribution or transfer, all
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1 Article 2 credits and net losses under Section 207 of the
2 partnership from which the assets were acquired.
3 (b-5) No limitation under Section 382 of the Internal
4 Revenue Code or the separate return limitation year
5 regulations promulgated under Section 1502 of the Internal
6 Revenue Code shall apply to the carryover of any Article 2
7 credit or net loss allowable under Section 207.
8 (c) The provisions of this amendatory Act of the 91st
9 General Assembly shall apply to all acquisitions occurring in
10 taxable years ending on or after December 31, 1986; provided
11 that if a taxpayer's Illinois income tax liability for any
12 taxable year, as assessed under Section 903 prior to January
13 1, 1999, was computed without taking into account all of the
14 Article 2 credits and net losses under Section 207 as allowed
15 by this Section:
16 (1) no refund shall be payable to the taxpayer for
17 that taxable year as the result of allowing any portion
18 of the Article 2 credits or net losses under Section 207
19 that were not taken into account in computing the tax
20 assessed prior to January 1, 1999;
21 (2) any deficiency which has not been paid may be
22 reduced (but not below zero) by the allowance of some or
23 all of the Article 2 credits or net losses under Section
24 207 that were not taken into account in computing the tax
25 assessed prior to January 1, 1999; and
26 (3) in the case of any Article 2 credit or net loss
27 under Section 207 that, pursuant to this subsection (c),
28 could not be taken into account either in computing the
29 tax assessed prior to January 1, 1999 for a taxable year
30 or in reducing a deficiency for that taxable year under
31 paragraph (2) of subsection (c), the allowance of such
32 credit or loss in any other taxable year shall not be
33 denied on the grounds that such credit or loss should
34 properly have been claimed in that taxable year under
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1 subsection (a) or (b).
2 (Source: P.A. 91-541, eff. 8-13-99.)
3 (35 ILCS 5/803) (from Ch. 120, par. 8-803)
4 Sec. 803. Payment of Estimated Tax.
5 (a) Every taxpayer other than an estate, trust,
6 partnership, Subchapter S corporation or farmer is required
7 to pay estimated tax for the taxable year, in such amount and
8 with such forms as the Department shall prescribe, if the
9 amount payable as estimated tax can reasonably be expected to
10 be more than (i) $250 for taxable years ending before
11 December 31, 2001 and $500 for taxable years ending on or
12 after December 31, 2001 or (ii) $400 for corporations.
13 (b) Estimated tax defined. The term "estimated tax"
14 means the excess of:
15 (1) The amount which the taxpayer estimates to be his
16 tax under this Act for the taxable year, over
17 (2) The amount which he estimates to be the sum of any
18 amounts to be withheld on account of or credited against such
19 tax.
20 (c) Joint payment. If they are eligible to do so for
21 federal tax purposes, a husband and wife may pay estimated
22 tax as if they were one taxpayer, in which case the liability
23 with respect to the estimated tax shall be joint and several.
24 If a joint payment is made but the husband and wife elect to
25 determine their taxes under this Act separately, the
26 estimated tax for such year may be treated as the estimated
27 tax of either husband or wife, or may be divided between
28 them, as they may elect.
29 (d) There shall be paid 4 equal installments of
30 estimated tax for each taxable year, payable as follows:
31 Required Installment: Due Date:
32 1st April 15
33 2nd June 15
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1 3rd September 15
2 4th Individuals: January 15 of the
3 following taxable year
4 Corporations: December 15
5 (e) Farmers. An individual, having gross income from
6 farming for the taxable year which is at least 2/3 of his
7 total estimated gross income for such year.
8 (f) Application to short taxable years. The application
9 of this section to taxable years of less than 12 months shall
10 be in accordance with regulations prescribed by the
11 Department.
12 (g) Fiscal years. In the application of this section to
13 the case of a taxable year beginning on any date other than
14 January 1, there shall be substituted, for the months
15 specified in subsections (d) and (e), the months which
16 correspond thereto.
17 (h) Installments paid in advance. Any installment of
18 estimated tax may be paid before the date prescribed for its
19 payment.
20 The changes in this Section made by this amendatory Act
21 of 1985 shall apply to taxable years ending on or after
22 January 1, 1986.
23 (Source: P.A. 86-678.)
24 (35 ILCS 5/1501) (from Ch. 120, par. 15-1501)
25 Sec. 1501. Definitions.
26 (a) In general. When used in this Act, where not
27 otherwise distinctly expressed or manifestly incompatible
28 with the intent thereof:
29 (1) Business income. The term "business income"
30 means income arising from transactions and activity in
31 the regular course of the taxpayer's trade or business,
32 net of the deductions allocable thereto, and includes
33 income from tangible and intangible property if the
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1 acquisition, management, and disposition of the property
2 constitute integral parts of the taxpayer's regular trade
3 or business operations. Such term does not include
4 compensation or the deductions allocable thereto.
5 (2) Commercial domicile. The term "commercial
6 domicile" means the principal place from which the trade
7 or business of the taxpayer is directed or managed.
8 (3) Compensation. The term "compensation" means
9 wages, salaries, commissions and any other form of
10 remuneration paid to employees for personal services.
11 (4) Corporation. The term "corporation" includes
12 associations, joint-stock companies, insurance companies
13 and cooperatives. Any entity, including a limited
14 liability company formed under the Illinois Limited
15 Liability Company Act, shall be treated as a corporation
16 if it is so classified for federal income tax purposes.
17 (5) Department. The term "Department" means the
18 Department of Revenue of this State.
19 (6) Director. The term "Director" means the
20 Director of Revenue of this State.
21 (7) Fiduciary. The term "fiduciary" means a
22 guardian, trustee, executor, administrator, receiver, or
23 any person acting in any fiduciary capacity for any
24 person.
25 (8) Financial organization.
26 (A) The term "financial organization" means
27 any bank, bank holding company, trust company,
28 savings bank, industrial bank, land bank, safe
29 deposit company, private banker, savings and loan
30 association, building and loan association, credit
31 union, currency exchange, cooperative bank, small
32 loan company, sales finance company, investment
33 company, or any person which is owned by a bank or
34 bank holding company. For the purpose of this
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1 Section a "person" will include only those persons
2 which a bank holding company may acquire and hold an
3 interest in, directly or indirectly, under the
4 provisions of the Bank Holding Company Act of 1956
5 (12 U.S.C. 1841, et seq.), except where interests in
6 any person must be disposed of within certain
7 required time limits under the Bank Holding Company
8 Act of 1956.
9 (B) For purposes of subparagraph (A) of this
10 paragraph, the term "bank" includes (i) any entity
11 that is regulated by the Comptroller of the Currency
12 under the National Bank Act, or by the Federal
13 Reserve Board, or by the Federal Deposit Insurance
14 Corporation and (ii) any federally or State
15 chartered bank operating as a credit card bank.
16 (C) For purposes of subparagraph (A) of this
17 paragraph, the term "sales finance company" has the
18 meaning provided in the following item (i) or (ii):
19 (i) A person primarily engaged in one or
20 more of the following businesses: the business
21 of purchasing customer receivables, the
22 business of making loans upon the security of
23 customer receivables, the business of making
24 loans for the express purpose of funding
25 purchases of tangible personal property or
26 services by the borrower, or the business of
27 finance leasing. For purposes of this item
28 (i), "customer receivable" means:
29 (a) a retail installment contract or
30 retail charge agreement within the meaning of
31 the Sales Finance Agency Act, the Retail
32 Installment Sales Act, or the Motor Vehicle
33 Retail Installment Sales Act;
34 (b) an installment, charge, credit, or
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1 similar contract or agreement arising from the
2 sale of tangible personal property or services
3 in a transaction involving a deferred payment
4 price payable in one or more installments
5 subsequent to the sale; or
6 (c) the outstanding balance of a contract
7 or agreement described in provisions (a) or (b)
8 of this item (i).
9 A customer receivable need not provide for
10 payment of interest on deferred payments. A sales
11 finance company may purchase a customer receivable
12 from, or make a loan secured by a customer
13 receivable to, the seller in the original
14 transaction or to a person who purchased the
15 customer receivable directly or indirectly from that
16 seller.
17 (ii) A corporation meeting each of the
18 following criteria:
19 (a) the corporation must be a member of
20 an "affiliated group" within the meaning of
21 Section 1504(a) of the Internal Revenue Code,
22 determined without regard to Section 1504(b) of
23 the Internal Revenue Code;
24 (b) more than 50% of the gross income of
25 the corporation for the taxable year must be
26 interest income derived from qualifying loans.
27 A "qualifying loan" is a loan made to a member
28 of the corporation's affiliated group that
29 originates customer receivables (within the
30 meaning of item (i)) or to whom customer
31 receivables originated by a member of the
32 affiliated group have been transferred, to the
33 extent the average outstanding balance of loans
34 from that corporation to members of its
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1 affiliated group during the taxable year do not
2 exceed the limitation amount for that
3 corporation. The "limitation amount" for a
4 corporation is the average outstanding balances
5 during the taxable year of customer receivables
6 (within the meaning of item (i)) originated by
7 all members of the affiliated group. If the
8 average outstanding balances of the loans made
9 by a corporation to members of its affiliated
10 group exceed the limitation amount, the
11 interest income of that corporation from
12 qualifying loans shall be equal to its interest
13 income from loans to members of its affiliated
14 groups times a fraction equal to the limitation
15 amount divided by the average outstanding
16 balances of the loans made by that corporation
17 to members of its affiliated group;
18 (c) the total of all shareholder's equity
19 (including, without limitation, paid-in capital
20 on common and preferred stock and retained
21 earnings) of the corporation plus the total of
22 all of its loans, advances, and other
23 obligations payable or owed to members of its
24 affiliated group may not exceed 20% of the
25 total assets of the corporation at any time
26 during the tax year; and
27 (d) more than 50% of all interest-bearing
28 obligations of the affiliated group payable to
29 persons outside the group determined in
30 accordance with generally accepted accounting
31 principles must be obligations of the
32 corporation.
33 This amendatory Act of the 91st General Assembly is
34 declaratory of existing law.
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1 (D) Subparagraphs (B) and (C) of this
2 paragraph are declaratory of existing law and apply
3 retroactively, for all tax years beginning on or
4 before December 31, 1996, to all original returns,
5 to all amended returns filed no later than 30 days
6 after the effective date of this amendatory Act of
7 1996, and to all notices issued on or before the
8 effective date of this amendatory Act of 1996 under
9 subsection (a) of Section 903, subsection (a) of
10 Section 904, subsection (e) of Section 909, or
11 Section 912. A taxpayer that is a "financial
12 organization" that engages in any transaction with
13 an affiliate shall be a "financial organization" for
14 all purposes of this Act.
15 (E) For all tax years beginning on or before
16 December 31, 1996, a taxpayer that falls within the
17 definition of a "financial organization" under
18 subparagraphs (B) or (C) of this paragraph, but who
19 does not fall within the definition of a "financial
20 organization" under the Proposed Regulations issued
21 by the Department of Revenue on July 19, 1996, may
22 irrevocably elect to apply the Proposed Regulations
23 for all of those years as though the Proposed
24 Regulations had been lawfully promulgated, adopted,
25 and in effect for all of those years. For purposes
26 of applying subparagraphs (B) or (C) of this
27 paragraph to all of those years, the election
28 allowed by this subparagraph applies only to the
29 taxpayer making the election and to those members of
30 the taxpayer's unitary business group who are
31 ordinarily required to apportion business income
32 under the same subsection of Section 304 of this Act
33 as the taxpayer making the election. No election
34 allowed by this subparagraph shall be made under a
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1 claim filed under subsection (d) of Section 909 more
2 than 30 days after the effective date of this
3 amendatory Act of 1996.
4 (F) Finance Leases. For purposes of this
5 subsection, a finance lease shall be treated as a
6 loan or other extension of credit, rather than as a
7 lease, regardless of how the transaction is
8 characterized for any other purpose, including the
9 purposes of any regulatory agency to which the
10 lessor is subject. A finance lease is any
11 transaction in the form of a lease in which the
12 lessee is treated as the owner of the leased asset
13 entitled to any deduction for depreciation allowed
14 under Section 167 of the Internal Revenue Code.
15 (9) Fiscal year. The term "fiscal year" means an
16 accounting period of 12 months ending on the last day of
17 any month other than December.
18 (10) Includes and including. The terms "includes"
19 and "including" when used in a definition contained in
20 this Act shall not be deemed to exclude other things
21 otherwise within the meaning of the term defined.
22 (11) Internal Revenue Code. The term "Internal
23 Revenue Code" means the United States Internal Revenue
24 Code of 1954 or any successor law or laws relating to
25 federal income taxes in effect for the taxable year.
26 (12) Mathematical error. The term "mathematical
27 error" includes the following types of errors, omissions,
28 or defects in a return filed by a taxpayer which prevents
29 acceptance of the return as filed for processing:
30 (A) arithmetic errors or incorrect
31 computations on the return or supporting schedules;
32 (B) entries on the wrong lines;
33 (C) omission of required supporting forms or
34 schedules or the omission of the information in
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1 whole or in part called for thereon; and
2 (D) an attempt to claim, exclude, deduct, or
3 improperly report, in a manner directly contrary to
4 the provisions of the Act and regulations thereunder
5 any item of income, exemption, deduction, or credit.
6 (13) Nonbusiness income. The term "nonbusiness
7 income" means all income other than business income or
8 compensation.
9 (14) Nonresident. The term "nonresident" means a
10 person who is not a resident.
11 (15) Paid, incurred and accrued. The terms "paid",
12 "incurred" and "accrued" shall be construed according to
13 the method of accounting upon the basis of which the
14 person's base income is computed under this Act.
15 (16) Partnership and partner. The term
16 "partnership" includes a syndicate, group, pool, joint
17 venture or other unincorporated organization, through or
18 by means of which any business, financial operation, or
19 venture is carried on, and which is not, within the
20 meaning of this Act, a trust or estate or a corporation;
21 and the term "partner" includes a member in such
22 syndicate, group, pool, joint venture or organization.
23 The term "partnership" includes any entity,
24 including a limited liability company formed under the
25 Illinois Limited Liability Company Act, shall be treated
26 as a partnership if it is so classified as a partnership
27 for federal income tax purposes.
28 For purposes of the tax imposed at subsection (c) of
29 Section 201 of this Act, The term "partnership" does not
30 include a syndicate, group, pool, joint venture, or other
31 unincorporated organization established for the sole
32 purpose of playing the Illinois State Lottery.
33 (17) Part-year resident. The term "part-year
34 resident" means an individual who became a resident
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1 during the taxable year or ceased to be a resident during
2 the taxable year. Under Section 1501 (a) (20) (A) (i)
3 residence commences with presence in this State for other
4 than a temporary or transitory purpose and ceases with
5 absence from this State for other than a temporary or
6 transitory purpose. Under Section 1501 (a) (20) (A) (ii)
7 residence commences with the establishment of domicile in
8 this State and ceases with the establishment of domicile
9 in another State.
10 (18) Person. The term "person" shall be construed
11 to mean and include an individual, a trust, estate,
12 partnership, association, firm, company, corporation,
13 limited liability company, or fiduciary. For purposes of
14 Section 1301 and 1302 of this Act, a "person" means (i)
15 an individual, (ii) a corporation, (iii) an officer,
16 agent, or employee of a corporation, (iv) a member, agent
17 or employee of a partnership, or (v) a member, manager,
18 employee, officer, director, or agent of a limited
19 liability company who in such capacity commits an offense
20 specified in Section 1301 and 1302.
21 (18A) Records. The term "records" includes all
22 data maintained by the taxpayer, whether on paper,
23 microfilm, microfiche, or any type of machine-sensible
24 data compilation.
25 (19) Regulations. The term "regulations" includes
26 rules promulgated and forms prescribed by the Department.
27 (20) Resident. The term "resident" means:
28 (A) an individual (i) who is in this State for
29 other than a temporary or transitory purpose during
30 the taxable year; or (ii) who is domiciled in this
31 State but is absent from the State for a temporary
32 or transitory purpose during the taxable year;
33 (B) The estate of a decedent who at his or her
34 death was domiciled in this State;
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1 (C) A trust created by a will of a decedent
2 who at his death was domiciled in this State; and
3 (D) An irrevocable trust, the grantor of which
4 was domiciled in this State at the time such trust
5 became irrevocable. For purpose of this
6 subparagraph, a trust shall be considered
7 irrevocable to the extent that the grantor is not
8 treated as the owner thereof under Sections 671
9 through 678 of the Internal Revenue Code.
10 (21) Sales. The term "sales" means all gross
11 receipts of the taxpayer not allocated under Sections
12 301, 302 and 303.
13 (22) State. The term "state" when applied to a
14 jurisdiction other than this State means any state of the
15 United States, the District of Columbia, the Commonwealth
16 of Puerto Rico, any Territory or Possession of the United
17 States, and any foreign country, or any political
18 subdivision of any of the foregoing. For purposes of the
19 foreign tax credit under Section 601, the term "state"
20 means any state of the United States, the District of
21 Columbia, the Commonwealth of Puerto Rico, and any
22 territory or possession of the United States, or any
23 political subdivision of any of the foregoing, effective
24 for tax years ending on or after December 31, 1989.
25 (23) Taxable year. The term "taxable year" means
26 the calendar year, or the fiscal year ending during such
27 calendar year, upon the basis of which the base income is
28 computed under this Act. "Taxable year" means, in the
29 case of a return made for a fractional part of a year
30 under the provisions of this Act, the period for which
31 such return is made.
32 (24) Taxpayer. The term "taxpayer" means any person
33 subject to the tax imposed by this Act.
34 (25) International banking facility. The term
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1 international banking facility shall have the same
2 meaning as is set forth in the Illinois Banking Act or as
3 is set forth in the laws of the United States or
4 regulations of the Board of Governors of the Federal
5 Reserve System.
6 (26) Income Tax Return Preparer.
7 (A) The term "income tax return preparer"
8 means any person who prepares for compensation, or
9 who employs one or more persons to prepare for
10 compensation, any return of tax imposed by this Act
11 or any claim for refund of tax imposed by this Act.
12 The preparation of a substantial portion of a return
13 or claim for refund shall be treated as the
14 preparation of that return or claim for refund.
15 (B) A person is not an income tax return
16 preparer if all he or she does is
17 (i) furnish typing, reproducing, or other
18 mechanical assistance;
19 (ii) prepare returns or claims for
20 refunds for the employer by whom he or she is
21 regularly and continuously employed;
22 (iii) prepare as a fiduciary returns or
23 claims for refunds for any person; or
24 (iv) prepare claims for refunds for a
25 taxpayer in response to any notice of
26 deficiency issued to that taxpayer or in
27 response to any waiver of restriction after the
28 commencement of an audit of that taxpayer or of
29 another taxpayer if a determination in the
30 audit of the other taxpayer directly or
31 indirectly affects the tax liability of the
32 taxpayer whose claims he or she is preparing.
33 (27) Unitary business group. The term "unitary
34 business group" means a group of persons related through
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1 common ownership whose business activities are integrated
2 with, dependent upon and contribute to each other. The
3 group will not include those members whose business
4 activity outside the United States is 80% or more of any
5 such member's total business activity; for purposes of
6 this paragraph and clause (a) (3) (B) (ii) of Section
7 304, business activity within the United States shall be
8 measured by means of the factors ordinarily applicable
9 under subsections (a), (b), (c), (d), or (h) of Section
10 304 except that, in the case of members ordinarily
11 required to apportion business income by means of the 3
12 factor formula of property, payroll and sales specified
13 in subsection (a) of Section 304, including the formula
14 as weighted in subsection (h) of Section 304, such
15 members shall not use the sales factor in the computation
16 and the results of the property and payroll factor
17 computations of subsection (a) of Section 304 shall be
18 divided by 2 (by one if either the property or payroll
19 factor has a denominator of zero). The computation
20 required by the preceding sentence shall, in each case,
21 involve the division of the member's property, payroll,
22 or revenue miles in the United States, insurance premiums
23 on property or risk in the United States, or financial
24 organization business income from sources within the
25 United States, as the case may be, by the respective
26 worldwide figures for such items. Common ownership in
27 the case of corporations is the direct or indirect
28 control or ownership of more than 50% of the outstanding
29 voting stock of the persons carrying on unitary business
30 activity. Unitary business activity can ordinarily be
31 illustrated where the activities of the members are: (1)
32 in the same general line (such as manufacturing,
33 wholesaling, retailing of tangible personal property,
34 insurance, transportation or finance); or (2) are steps
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1 in a vertically structured enterprise or process (such as
2 the steps involved in the production of natural
3 resources, which might include exploration, mining,
4 refining, and marketing); and, in either instance, the
5 members are functionally integrated through the exercise
6 of strong centralized management (where, for example,
7 authority over such matters as purchasing, financing, tax
8 compliance, product line, personnel, marketing and
9 capital investment is not left to each member). In no
10 event, however, will any unitary business group include
11 members which are ordinarily required to apportion
12 business income under different subsections of Section
13 304 except that for tax years ending on or after December
14 31, 1987 this prohibition shall not apply to a unitary
15 business group composed of one or more taxpayers all of
16 which apportion business income pursuant to subsection
17 (b) of Section 304, or all of which apportion business
18 income pursuant to subsection (d) of Section 304, and a
19 holding company of such single-factor taxpayers (see
20 definition of "financial organization" for rule regarding
21 holding companies of financial organizations). If a
22 unitary business group would, but for the preceding
23 sentence, include members that are ordinarily required to
24 apportion business income under different subsections of
25 Section 304, then for each subsection of Section 304 for
26 which there are two or more members, there shall be a
27 separate unitary business group composed of such members.
28 For purposes of the preceding two sentences, a member is
29 "ordinarily required to apportion business income" under
30 a particular subsection of Section 304 if it would be
31 required to use the apportionment method prescribed by
32 such subsection except for the fact that it derives
33 business income solely from Illinois. If the unitary
34 business group members' accounting periods differ, the
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1 common parent's accounting period or, if there is no
2 common parent, the accounting period of the member that
3 is expected to have, on a recurring basis, the greatest
4 Illinois income tax liability must be used to determine
5 whether to use the apportionment method provided in
6 subsection (a) or subsection (h) of Section 304. The
7 prohibition against membership in a unitary business
8 group for taxpayers ordinarily required to apportion
9 income under different subsections of Section 304 does
10 not apply to taxpayers required to apportion income under
11 subsection (a) and subsection (h) of Section 304. The
12 provisions of this amendatory Act of 1998 apply to tax
13 years ending on or after December 31, 1998.
14 (28) Subchapter S corporation. The term
15 "Subchapter S corporation" means a corporation for which
16 there is in effect an election under Section 1362 of the
17 Internal Revenue Code, or for which there is a federal
18 election to opt out of the provisions of the Subchapter S
19 Revision Act of 1982 and have applied instead the prior
20 federal Subchapter S rules as in effect on July 1, 1982.
21 (b) Other definitions.
22 (1) Words denoting number, gender, and so forth,
23 when used in this Act, where not otherwise distinctly
24 expressed or manifestly incompatible with the intent
25 thereof:
26 (A) Words importing the singular include and
27 apply to several persons, parties or things;
28 (B) Words importing the plural include the
29 singular; and
30 (C) Words importing the masculine gender
31 include the feminine as well.
32 (2) "Company" or "association" as including
33 successors and assigns. The word "company" or
34 "association", when used in reference to a corporation,
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1 shall be deemed to embrace the words "successors and
2 assigns of such company or association", and in like
3 manner as if these last-named words, or words of similar
4 import, were expressed.
5 (3) Other terms. Any term used in any Section of
6 this Act with respect to the application of, or in
7 connection with, the provisions of any other Section of
8 this Act shall have the same meaning as in such other
9 Section.
10 (Source: P.A. 90-613, eff. 7-9-98; 91-535, eff. 1-1-00)
11 Section 10. The Use Tax Act is amended by changing
12 Sections 3-5, 9, 10, and 22 as follows:
13 (35 ILCS 105/3-5) (from Ch. 120, par. 439.3-5)
14 Sec. 3-5. Exemptions. Use of the following tangible
15 personal property is exempt from the tax imposed by this Act:
16 (1) Personal property purchased from a corporation,
17 society, association, foundation, institution, or
18 organization, other than a limited liability company, that is
19 organized and operated as a not-for-profit service enterprise
20 for the benefit of persons 65 years of age or older if the
21 personal property was not purchased by the enterprise for the
22 purpose of resale by the enterprise.
23 (2) Personal property purchased by a not-for-profit
24 Illinois county fair association for use in conducting,
25 operating, or promoting the county fair.
26 (3) Personal property purchased by a not-for-profit arts
27 or cultural organization that establishes, by proof required
28 by the Department by rule, that it has received an exemption
29 under Section 501(c)(3) of the Internal Revenue Code and that
30 is organized and operated for the presentation or support of
31 arts or cultural programming, activities, or services. These
32 organizations include, but are not limited to, music and
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1 dramatic arts organizations such as symphony orchestras and
2 theatrical groups, arts and cultural service organizations,
3 local arts councils, visual arts organizations, and media
4 arts organizations.
5 (4) Personal property purchased by a governmental body,
6 by a corporation, society, association, foundation, or
7 institution organized and operated exclusively for
8 charitable, religious, or educational purposes, or by a
9 not-for-profit corporation, society, association, foundation,
10 institution, or organization that has no compensated officers
11 or employees and that is organized and operated primarily for
12 the recreation of persons 55 years of age or older. A limited
13 liability company may qualify for the exemption under this
14 paragraph only if the limited liability company is organized
15 and operated exclusively for educational purposes. On and
16 after July 1, 1987, however, no entity otherwise eligible for
17 this exemption shall make tax-free purchases unless it has an
18 active exemption identification number issued by the
19 Department.
20 (5) A passenger car that is a replacement vehicle to the
21 extent that the purchase price of the car is subject to the
22 Replacement Vehicle Tax.
23 (6) Graphic arts machinery and equipment, including
24 repair and replacement parts, both new and used, and
25 including that manufactured on special order, certified by
26 the purchaser to be used primarily for graphic arts
27 production, and including machinery and equipment purchased
28 for lease.
29 (7) Farm chemicals.
30 (8) Legal tender, currency, medallions, or gold or
31 silver coinage issued by the State of Illinois, the
32 government of the United States of America, or the government
33 of any foreign country, and bullion.
34 (9) Personal property purchased from a teacher-sponsored
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1 student organization affiliated with an elementary or
2 secondary school located in Illinois.
3 (10) A motor vehicle of the first division, a motor
4 vehicle of the second division that is a self-contained motor
5 vehicle designed or permanently converted to provide living
6 quarters for recreational, camping, or travel use, with
7 direct walk through to the living quarters from the driver's
8 seat, or a motor vehicle of the second division that is of
9 the van configuration designed for the transportation of not
10 less than 7 nor more than 16 passengers, as defined in
11 Section 1-146 of the Illinois Vehicle Code, that is used for
12 automobile renting, as defined in the Automobile Renting
13 Occupation and Use Tax Act.
14 (11) Farm machinery and equipment, both new and used,
15 including that manufactured on special order, certified by
16 the purchaser to be used primarily for production agriculture
17 or State or federal agricultural programs, including
18 individual replacement parts for the machinery and equipment,
19 including machinery and equipment purchased for lease, and
20 including implements of husbandry defined in Section 1-130 of
21 the Illinois Vehicle Code, farm machinery and agricultural
22 chemical and fertilizer spreaders, and nurse wagons required
23 to be registered under Section 3-809 of the Illinois Vehicle
24 Code, but excluding other motor vehicles required to be
25 registered under the Illinois Vehicle Code. Horticultural
26 polyhouses or hoop houses used for propagating, growing, or
27 overwintering plants shall be considered farm machinery and
28 equipment under this item (11). Agricultural chemical tender
29 tanks and dry boxes shall include units sold separately from
30 a motor vehicle required to be licensed and units sold
31 mounted on a motor vehicle required to be licensed if the
32 selling price of the tender is separately stated.
33 Farm machinery and equipment shall include precision
34 farming equipment that is installed or purchased to be
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1 installed on farm machinery and equipment including, but not
2 limited to, tractors, harvesters, sprayers, planters,
3 seeders, or spreaders. Precision farming equipment includes,
4 but is not limited to, soil testing sensors, computers,
5 monitors, software, global positioning and mapping systems,
6 and other such equipment.
7 Farm machinery and equipment also includes computers,
8 sensors, software, and related equipment used primarily in
9 the computer-assisted operation of production agriculture
10 facilities, equipment, and activities such as, but not
11 limited to, the collection, monitoring, and correlation of
12 animal and crop data for the purpose of formulating animal
13 diets and agricultural chemicals. This item (11) is exempt
14 from the provisions of Section 3-90.
15 (12) Fuel and petroleum products sold to or used by an
16 air common carrier, certified by the carrier to be used for
17 consumption, shipment, or storage in the conduct of its
18 business as an air common carrier, for a flight destined for
19 or returning from a location or locations outside the United
20 States without regard to previous or subsequent domestic
21 stopovers.
22 (13) Proceeds of mandatory service charges separately
23 stated on customers' bills for the purchase and consumption
24 of food and beverages purchased at retail from a retailer, to
25 the extent that the proceeds of the service charge are in
26 fact turned over as tips or as a substitute for tips to the
27 employees who participate directly in preparing, serving,
28 hosting or cleaning up the food or beverage function with
29 respect to which the service charge is imposed.
30 (14) Oil field exploration, drilling, and production
31 equipment, including (i) rigs and parts of rigs, rotary rigs,
32 cable tool rigs, and workover rigs, (ii) pipe and tubular
33 goods, including casing and drill strings, (iii) pumps and
34 pump-jack units, (iv) storage tanks and flow lines, (v) any
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1 individual replacement part for oil field exploration,
2 drilling, and production equipment, and (vi) machinery and
3 equipment purchased for lease; but excluding motor vehicles
4 required to be registered under the Illinois Vehicle Code.
5 (15) Photoprocessing machinery and equipment, including
6 repair and replacement parts, both new and used, including
7 that manufactured on special order, certified by the
8 purchaser to be used primarily for photoprocessing, and
9 including photoprocessing machinery and equipment purchased
10 for lease.
11 (16) Coal exploration, mining, offhighway hauling,
12 processing, maintenance, and reclamation equipment, including
13 replacement parts and equipment, and including equipment
14 purchased for lease, but excluding motor vehicles required to
15 be registered under the Illinois Vehicle Code.
16 (17) Distillation machinery and equipment, sold as a
17 unit or kit, assembled or installed by the retailer,
18 certified by the user to be used only for the production of
19 ethyl alcohol that will be used for consumption as motor fuel
20 or as a component of motor fuel for the personal use of the
21 user, and not subject to sale or resale.
22 (18) Manufacturing and assembling machinery and
23 equipment used primarily in the process of manufacturing or
24 assembling tangible personal property for wholesale or retail
25 sale or lease, whether that sale or lease is made directly by
26 the manufacturer or by some other person, whether the
27 materials used in the process are owned by the manufacturer
28 or some other person, or whether that sale or lease is made
29 apart from or as an incident to the seller's engaging in the
30 service occupation of producing machines, tools, dies, jigs,
31 patterns, gauges, or other similar items of no commercial
32 value on special order for a particular purchaser.
33 (19) Personal property delivered to a purchaser or
34 purchaser's donee inside Illinois when the purchase order for
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1 that personal property was received by a florist located
2 outside Illinois who has a florist located inside Illinois
3 deliver the personal property.
4 (20) Semen used for artificial insemination of livestock
5 for direct agricultural production.
6 (21) Horses, or interests in horses, registered with and
7 meeting the requirements of any of the Arabian Horse Club
8 Registry of America, Appaloosa Horse Club, American Quarter
9 Horse Association, United States Trotting Association, or
10 Jockey Club, as appropriate, used for purposes of breeding or
11 racing for prizes.
12 (22) Computers and communications equipment utilized for
13 any hospital purpose and equipment used in the diagnosis,
14 analysis, or treatment of hospital patients purchased by a
15 lessor who leases the equipment, under a lease of one year or
16 longer executed or in effect at the time the lessor would
17 otherwise be subject to the tax imposed by this Act, to a
18 hospital that has been issued an active tax exemption
19 identification number by the Department under Section 1g of
20 the Retailers' Occupation Tax Act. If the equipment is
21 leased in a manner that does not qualify for this exemption
22 or is used in any other non-exempt manner, the lessor shall
23 be liable for the tax imposed under this Act or the Service
24 Use Tax Act, as the case may be, based on the fair market
25 value of the property at the time the non-qualifying use
26 occurs. No lessor shall collect or attempt to collect an
27 amount (however designated) that purports to reimburse that
28 lessor for the tax imposed by this Act or the Service Use Tax
29 Act, as the case may be, if the tax has not been paid by the
30 lessor. If a lessor improperly collects any such amount from
31 the lessee, the lessee shall have a legal right to claim a
32 refund of that amount from the lessor. If, however, that
33 amount is not refunded to the lessee for any reason, the
34 lessor is liable to pay that amount to the Department.
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1 (23) Personal property purchased by a lessor who leases
2 the property, under a lease of one year or longer executed
3 or in effect at the time the lessor would otherwise be
4 subject to the tax imposed by this Act, to a governmental
5 body that has been issued an active sales tax exemption
6 identification number by the Department under Section 1g of
7 the Retailers' Occupation Tax Act. If the property is leased
8 in a manner that does not qualify for this exemption or used
9 in any other non-exempt manner, the lessor shall be liable
10 for the tax imposed under this Act or the Service Use Tax
11 Act, as the case may be, based on the fair market value of
12 the property at the time the non-qualifying use occurs. No
13 lessor shall collect or attempt to collect an amount (however
14 designated) that purports to reimburse that lessor for the
15 tax imposed by this Act or the Service Use Tax Act, as the
16 case may be, if the tax has not been paid by the lessor. If
17 a lessor improperly collects any such amount from the lessee,
18 the lessee shall have a legal right to claim a refund of that
19 amount from the lessor. If, however, that amount is not
20 refunded to the lessee for any reason, the lessor is liable
21 to pay that amount to the Department.
22 (24) Beginning with taxable years ending on or after
23 December 31, 1995 and ending with taxable years ending on or
24 before December 31, 2004, personal property that is donated
25 for disaster relief to be used in a State or federally
26 declared disaster area in Illinois or bordering Illinois by a
27 manufacturer or retailer that is registered in this State to
28 a corporation, society, association, foundation, or
29 institution that has been issued a sales tax exemption
30 identification number by the Department that assists victims
31 of the disaster who reside within the declared disaster area.
32 (25) Beginning with taxable years ending on or after
33 December 31, 1995 and ending with taxable years ending on or
34 before December 31, 2004, personal property that is used in
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1 the performance of infrastructure repairs in this State,
2 including but not limited to municipal roads and streets,
3 access roads, bridges, sidewalks, waste disposal systems,
4 water and sewer line extensions, water distribution and
5 purification facilities, storm water drainage and retention
6 facilities, and sewage treatment facilities, resulting from a
7 State or federally declared disaster in Illinois or bordering
8 Illinois when such repairs are initiated on facilities
9 located in the declared disaster area within 6 months after
10 the disaster.
11 (26) Beginning July 1, 1999, game or game birds
12 purchased at a "game breeding and hunting preserve area" or
13 an "exotic game hunting area" as those terms are used in the
14 Wildlife Code or at a hunting enclosure approved through
15 rules adopted by the Department of Natural Resources. This
16 paragraph is exempt from the provisions of Section 3-90.
17 (27) (26) A motor vehicle, as that term is defined in
18 Section 1-146 of the Illinois Vehicle Code, that is donated
19 to a corporation, limited liability company, society,
20 association, foundation, or institution that is determined by
21 the Department to be organized and operated exclusively for
22 educational purposes. For purposes of this exemption, "a
23 corporation, limited liability company, society, association,
24 foundation, or institution organized and operated exclusively
25 for educational purposes" means all tax-supported public
26 schools, private schools that offer systematic instruction in
27 useful branches of learning by methods common to public
28 schools and that compare favorably in their scope and
29 intensity with the course of study presented in tax-supported
30 schools, and vocational or technical schools or institutes
31 organized and operated exclusively to provide a course of
32 study of not less than 6 weeks duration and designed to
33 prepare individuals to follow a trade or to pursue a manual,
34 technical, mechanical, industrial, business, or commercial
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1 occupation.
2 (28) (27) Beginning January 1, 2000, personal property,
3 including food, purchased through fundraising events for the
4 benefit of a public or private elementary or secondary
5 school, a group of those schools, or one or more school
6 districts if the events are sponsored by an entity recognized
7 by the school district that consists primarily of volunteers
8 and includes parents and teachers of the school children.
9 This paragraph does not apply to fundraising events (i) for
10 the benefit of private home instruction or (ii) for which the
11 fundraising entity purchases the personal property sold at
12 the events from another individual or entity that sold the
13 property for the purpose of resale by the fundraising entity
14 and that profits from the sale to the fundraising entity.
15 This paragraph is exempt from the provisions of Section 3-90.
16 (29) (26) Beginning January 1, 2000, new or used
17 automatic vending machines that prepare and serve hot food
18 and beverages, including coffee, soup, and other items, and
19 replacement parts for these machines. This paragraph is
20 exempt from the provisions of Section 3-90.
21 (30) Food for human consumption that is to be consumed
22 off the premises where it is sold (other than alcoholic
23 beverages, soft drinks, and food that has been prepared for
24 immediate consumption) and prescription and nonprescription
25 medicines, drugs, medical appliances, and insulin, urine
26 testing materials, syringes, and needles used by diabetics,
27 for human use, when purchased for use by a person receiving
28 medical assistance under Article 5 of the Illinois Public Aid
29 Code who resides in a licensed long-term care facility, as
30 defined in the Nursing Home Care Act.
31 (Source: P.A. 90-14, eff. 7-1-97; 90-552, eff. 12-12-97;
32 90-605, eff. 6-30-98; 91-51, eff. 6-30-99; 91-200, eff.
33 7-20-99; 91-439, eff. 8-6-99; 91-637, eff. 8-20-99; 91-644,
34 eff. 8-20-99; revised 9-29-99.)
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1 (35 ILCS 105/9) (from Ch. 120, par. 439.9)
2 Sec. 9. Except as to motor vehicles, watercraft,
3 aircraft, and trailers that are required to be registered
4 with an agency of this State, each retailer required or
5 authorized to collect the tax imposed by this Act shall pay
6 to the Department the amount of such tax (except as otherwise
7 provided) at the time when he is required to file his return
8 for the period during which such tax was collected, less a
9 discount of 2.1% prior to January 1, 1990, and 1.75% on and
10 after January 1, 1990, or $5 per calendar year, whichever is
11 greater, which is allowed to reimburse the retailer for
12 expenses incurred in collecting the tax, keeping records,
13 preparing and filing returns, remitting the tax and supplying
14 data to the Department on request. In the case of retailers
15 who report and pay the tax on a transaction by transaction
16 basis, as provided in this Section, such discount shall be
17 taken with each such tax remittance instead of when such
18 retailer files his periodic return. A retailer need not
19 remit that part of any tax collected by him to the extent
20 that he is required to remit and does remit the tax imposed
21 by the Retailers' Occupation Tax Act, with respect to the
22 sale of the same property.
23 Where such tangible personal property is sold under a
24 conditional sales contract, or under any other form of sale
25 wherein the payment of the principal sum, or a part thereof,
26 is extended beyond the close of the period for which the
27 return is filed, the retailer, in collecting the tax (except
28 as to motor vehicles, watercraft, aircraft, and trailers that
29 are required to be registered with an agency of this State),
30 may collect for each tax return period, only the tax
31 applicable to that part of the selling price actually
32 received during such tax return period.
33 Except as provided in this Section, on or before the
34 twentieth day of each calendar month, such retailer shall
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1 file a return for the preceding calendar month. Such return
2 shall be filed on forms prescribed by the Department and
3 shall furnish such information as the Department may
4 reasonably require.
5 The Department may require returns to be filed on a
6 quarterly basis. If so required, a return for each calendar
7 quarter shall be filed on or before the twentieth day of the
8 calendar month following the end of such calendar quarter.
9 The taxpayer shall also file a return with the Department for
10 each of the first two months of each calendar quarter, on or
11 before the twentieth day of the following calendar month,
12 stating:
13 1. The name of the seller;
14 2. The address of the principal place of business
15 from which he engages in the business of selling tangible
16 personal property at retail in this State;
17 3. The total amount of taxable receipts received by
18 him during the preceding calendar month from sales of
19 tangible personal property by him during such preceding
20 calendar month, including receipts from charge and time
21 sales, but less all deductions allowed by law;
22 4. The amount of credit provided in Section 2d of
23 this Act;
24 5. The amount of tax due;
25 5-5. The signature of the taxpayer; and
26 6. Such other reasonable information as the
27 Department may require.
28 If a taxpayer fails to sign a return within 30 days after
29 the proper notice and demand for signature by the Department,
30 the return shall be considered valid and any amount shown to
31 be due on the return shall be deemed assessed.
32 Beginning October 1, 1993, a taxpayer who has an average
33 monthly tax liability of $150,000 or more shall make all
34 payments required by rules of the Department by electronic
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1 funds transfer. Beginning October 1, 1994, a taxpayer who has
2 an average monthly tax liability of $100,000 or more shall
3 make all payments required by rules of the Department by
4 electronic funds transfer. Beginning October 1, 1995, a
5 taxpayer who has an average monthly tax liability of $50,000
6 or more shall make all payments required by rules of the
7 Department by electronic funds transfer. Beginning October 1,
8 2000, a taxpayer who has an annual tax liability of $200,000
9 or more shall make all payments required by rules of the
10 Department by electronic funds transfer. The term "annual
11 tax liability" shall be the sum of the taxpayer's liabilities
12 under this Act, and under all other State and local
13 occupation and use tax laws administered by the Department,
14 for the immediately preceding calendar year. The term
15 "average monthly tax liability" means the sum of the
16 taxpayer's liabilities under this Act, and under all other
17 State and local occupation and use tax laws administered by
18 the Department, for the immediately preceding calendar year
19 divided by 12.
20 Before August 1 of each year beginning in 1993, the
21 Department shall notify all taxpayers required to make
22 payments by electronic funds transfer. All taxpayers required
23 to make payments by electronic funds transfer shall make
24 those payments for a minimum of one year beginning on October
25 1.
26 Any taxpayer not required to make payments by electronic
27 funds transfer may make payments by electronic funds transfer
28 with the permission of the Department.
29 All taxpayers required to make payment by electronic
30 funds transfer and any taxpayers authorized to voluntarily
31 make payments by electronic funds transfer shall make those
32 payments in the manner authorized by the Department.
33 The Department shall adopt such rules as are necessary to
34 effectuate a program of electronic funds transfer and the
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1 requirements of this Section.
2 Before October 1, 2000, if the taxpayer's average monthly
3 tax liability to the Department under this Act, the
4 Retailers' Occupation Tax Act, the Service Occupation Tax
5 Act, the Service Use Tax Act was $10,000 or more during the
6 preceding 4 complete calendar quarters, he shall file a
7 return with the Department each month by the 20th day of the
8 month next following the month during which such tax
9 liability is incurred and shall make payments to the
10 Department on or before the 7th, 15th, 22nd and last day of
11 the month during which such liability is incurred. On and
12 after October 1, 2000, if the taxpayer's average monthly tax
13 liability to the Department under this Act, the Retailers'
14 Occupation Tax Act, the Service Occupation Tax Act, and the
15 Service Use Tax Act was $20,000 or more during the preceding
16 4 complete calendar quarters, he shall file a return with the
17 Department each month by the 20th day of the month next
18 following the month during which such tax liability is
19 incurred and shall make payment to the Department on or
20 before the 7th, 15th, 22nd and last day of or the month
21 during which such liability is incurred. If the month during
22 which such tax liability is incurred began prior to January
23 1, 1985, each payment shall be in an amount equal to 1/4 of
24 the taxpayer's actual liability for the month or an amount
25 set by the Department not to exceed 1/4 of the average
26 monthly liability of the taxpayer to the Department for the
27 preceding 4 complete calendar quarters (excluding the month
28 of highest liability and the month of lowest liability in
29 such 4 quarter period). If the month during which such tax
30 liability is incurred begins on or after January 1, 1985, and
31 prior to January 1, 1987, each payment shall be in an amount
32 equal to 22.5% of the taxpayer's actual liability for the
33 month or 27.5% of the taxpayer's liability for the same
34 calendar month of the preceding year. If the month during
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1 which such tax liability is incurred begins on or after
2 January 1, 1987, and prior to January 1, 1988, each payment
3 shall be in an amount equal to 22.5% of the taxpayer's actual
4 liability for the month or 26.25% of the taxpayer's liability
5 for the same calendar month of the preceding year. If the
6 month during which such tax liability is incurred begins on
7 or after January 1, 1988, and prior to January 1, 1989, or
8 begins on or after January 1, 1996, each payment shall be in
9 an amount equal to 22.5% of the taxpayer's actual liability
10 for the month or 25% of the taxpayer's liability for the same
11 calendar month of the preceding year. If the month during
12 which such tax liability is incurred begins on or after
13 January 1, 1989, and prior to January 1, 1996, each payment
14 shall be in an amount equal to 22.5% of the taxpayer's actual
15 liability for the month or 25% of the taxpayer's liability
16 for the same calendar month of the preceding year or 100% of
17 the taxpayer's actual liability for the quarter monthly
18 reporting period. The amount of such quarter monthly
19 payments shall be credited against the final tax liability of
20 the taxpayer's return for that month. Before October 1,
21 2000, once applicable, the requirement of the making of
22 quarter monthly payments to the Department shall continue
23 until such taxpayer's average monthly liability to the
24 Department during the preceding 4 complete calendar quarters
25 (excluding the month of highest liability and the month of
26 lowest liability) is less than $9,000, or until such
27 taxpayer's average monthly liability to the Department as
28 computed for each calendar quarter of the 4 preceding
29 complete calendar quarter period is less than $10,000.
30 However, if a taxpayer can show the Department that a
31 substantial change in the taxpayer's business has occurred
32 which causes the taxpayer to anticipate that his average
33 monthly tax liability for the reasonably foreseeable future
34 will fall below the $10,000 threshold stated above, then such
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1 taxpayer may petition the Department for change in such
2 taxpayer's reporting status. On and after October 1, 2000,
3 once applicable, the requirement of the making of quarter
4 monthly payments to the Department shall continue until such
5 taxpayer's average monthly liability to the Department during
6 the preceding 4 complete calendar quarters (excluding the
7 month of highest liability and the month of lowest liability)
8 is less than $19,000 or until such taxpayer's average monthly
9 liability to the Department as computed for each calendar
10 quarter of the 4 preceding complete calendar quarter period
11 is less than $20,000. However, if a taxpayer can show the
12 Department that a substantial change in the taxpayer's
13 business has occurred which causes the taxpayer to anticipate
14 that his average monthly tax liability for the reasonably
15 foreseeable future will fall below the $20,000 threshold
16 stated above, then such taxpayer may petition the Department
17 for a change in such taxpayer's reporting status. The
18 Department shall change such taxpayer's reporting status
19 unless it finds that such change is seasonal in nature and
20 not likely to be long term. If any such quarter monthly
21 payment is not paid at the time or in the amount required by
22 this Section, then the taxpayer shall be liable for penalties
23 and interest on the difference between the minimum amount due
24 and the amount of such quarter monthly payment actually and
25 timely paid, except insofar as the taxpayer has previously
26 made payments for that month to the Department in excess of
27 the minimum payments previously due as provided in this
28 Section. The Department shall make reasonable rules and
29 regulations to govern the quarter monthly payment amount and
30 quarter monthly payment dates for taxpayers who file on other
31 than a calendar monthly basis.
32 If any such payment provided for in this Section exceeds
33 the taxpayer's liabilities under this Act, the Retailers'
34 Occupation Tax Act, the Service Occupation Tax Act and the
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1 Service Use Tax Act, as shown by an original monthly return,
2 the Department shall issue to the taxpayer a credit
3 memorandum no later than 30 days after the date of payment,
4 which memorandum may be submitted by the taxpayer to the
5 Department in payment of tax liability subsequently to be
6 remitted by the taxpayer to the Department or be assigned by
7 the taxpayer to a similar taxpayer under this Act, the
8 Retailers' Occupation Tax Act, the Service Occupation Tax Act
9 or the Service Use Tax Act, in accordance with reasonable
10 rules and regulations to be prescribed by the Department,
11 except that if such excess payment is shown on an original
12 monthly return and is made after December 31, 1986, no credit
13 memorandum shall be issued, unless requested by the taxpayer.
14 If no such request is made, the taxpayer may credit such
15 excess payment against tax liability subsequently to be
16 remitted by the taxpayer to the Department under this Act,
17 the Retailers' Occupation Tax Act, the Service Occupation Tax
18 Act or the Service Use Tax Act, in accordance with reasonable
19 rules and regulations prescribed by the Department. If the
20 Department subsequently determines that all or any part of
21 the credit taken was not actually due to the taxpayer, the
22 taxpayer's 2.1% or 1.75% vendor's discount shall be reduced
23 by 2.1% or 1.75% of the difference between the credit taken
24 and that actually due, and the taxpayer shall be liable for
25 penalties and interest on such difference.
26 If the retailer is otherwise required to file a monthly
27 return and if the retailer's average monthly tax liability to
28 the Department does not exceed $200, the Department may
29 authorize his returns to be filed on a quarter annual basis,
30 with the return for January, February, and March of a given
31 year being due by April 20 of such year; with the return for
32 April, May and June of a given year being due by July 20 of
33 such year; with the return for July, August and September of
34 a given year being due by October 20 of such year, and with
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1 the return for October, November and December of a given year
2 being due by January 20 of the following year.
3 If the retailer is otherwise required to file a monthly
4 or quarterly return and if the retailer's average monthly tax
5 liability to the Department does not exceed $50, the
6 Department may authorize his returns to be filed on an annual
7 basis, with the return for a given year being due by January
8 20 of the following year.
9 Such quarter annual and annual returns, as to form and
10 substance, shall be subject to the same requirements as
11 monthly returns.
12 Notwithstanding any other provision in this Act
13 concerning the time within which a retailer may file his
14 return, in the case of any retailer who ceases to engage in a
15 kind of business which makes him responsible for filing
16 returns under this Act, such retailer shall file a final
17 return under this Act with the Department not more than one
18 month after discontinuing such business.
19 In addition, with respect to motor vehicles, watercraft,
20 aircraft, and trailers that are required to be registered
21 with an agency of this State, every retailer selling this
22 kind of tangible personal property shall file, with the
23 Department, upon a form to be prescribed and supplied by the
24 Department, a separate return for each such item of tangible
25 personal property which the retailer sells, except that if
26 where, in the same transaction, (i) a retailer of aircraft,
27 watercraft, motor vehicles or trailers transfers more than
28 one aircraft, watercraft, motor vehicle or trailer to another
29 aircraft, watercraft, motor vehicle or trailer retailer for
30 the purpose of resale or (ii) a retailer of aircraft,
31 watercraft, motor vehicles, or trailers transfers more than
32 one aircraft, watercraft, motor vehicle, or trailer to a
33 purchaser for use as a qualifying rolling stock as provided
34 in Section 3-55 of this Act, then that seller for resale may
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1 report the transfer of all the aircraft, watercraft, motor
2 vehicles or trailers involved in that transaction to the
3 Department on the same uniform invoice-transaction reporting
4 return form. For purposes of this Section, "watercraft"
5 means a Class 2, Class 3, or Class 4 watercraft as defined in
6 Section 3-2 of the Boat Registration and Safety Act, a
7 personal watercraft, or any boat equipped with an inboard
8 motor.
9 The transaction reporting return in the case of motor
10 vehicles or trailers that are required to be registered with
11 an agency of this State, shall be the same document as the
12 Uniform Invoice referred to in Section 5-402 of the Illinois
13 Vehicle Code and must show the name and address of the
14 seller; the name and address of the purchaser; the amount of
15 the selling price including the amount allowed by the
16 retailer for traded-in property, if any; the amount allowed
17 by the retailer for the traded-in tangible personal property,
18 if any, to the extent to which Section 2 of this Act allows
19 an exemption for the value of traded-in property; the balance
20 payable after deducting such trade-in allowance from the
21 total selling price; the amount of tax due from the retailer
22 with respect to such transaction; the amount of tax collected
23 from the purchaser by the retailer on such transaction (or
24 satisfactory evidence that such tax is not due in that
25 particular instance, if that is claimed to be the fact); the
26 place and date of the sale; a sufficient identification of
27 the property sold; such other information as is required in
28 Section 5-402 of the Illinois Vehicle Code, and such other
29 information as the Department may reasonably require.
30 The transaction reporting return in the case of
31 watercraft and aircraft must show the name and address of the
32 seller; the name and address of the purchaser; the amount of
33 the selling price including the amount allowed by the
34 retailer for traded-in property, if any; the amount allowed
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1 by the retailer for the traded-in tangible personal property,
2 if any, to the extent to which Section 2 of this Act allows
3 an exemption for the value of traded-in property; the balance
4 payable after deducting such trade-in allowance from the
5 total selling price; the amount of tax due from the retailer
6 with respect to such transaction; the amount of tax collected
7 from the purchaser by the retailer on such transaction (or
8 satisfactory evidence that such tax is not due in that
9 particular instance, if that is claimed to be the fact); the
10 place and date of the sale, a sufficient identification of
11 the property sold, and such other information as the
12 Department may reasonably require.
13 Such transaction reporting return shall be filed not
14 later than 20 days after the date of delivery of the item
15 that is being sold, but may be filed by the retailer at any
16 time sooner than that if he chooses to do so. The
17 transaction reporting return and tax remittance or proof of
18 exemption from the tax that is imposed by this Act may be
19 transmitted to the Department by way of the State agency with
20 which, or State officer with whom, the tangible personal
21 property must be titled or registered (if titling or
22 registration is required) if the Department and such agency
23 or State officer determine that this procedure will expedite
24 the processing of applications for title or registration.
25 With each such transaction reporting return, the retailer
26 shall remit the proper amount of tax due (or shall submit
27 satisfactory evidence that the sale is not taxable if that is
28 the case), to the Department or its agents, whereupon the
29 Department shall issue, in the purchaser's name, a tax
30 receipt (or a certificate of exemption if the Department is
31 satisfied that the particular sale is tax exempt) which such
32 purchaser may submit to the agency with which, or State
33 officer with whom, he must title or register the tangible
34 personal property that is involved (if titling or
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1 registration is required) in support of such purchaser's
2 application for an Illinois certificate or other evidence of
3 title or registration to such tangible personal property.
4 No retailer's failure or refusal to remit tax under this
5 Act precludes a user, who has paid the proper tax to the
6 retailer, from obtaining his certificate of title or other
7 evidence of title or registration (if titling or registration
8 is required) upon satisfying the Department that such user
9 has paid the proper tax (if tax is due) to the retailer. The
10 Department shall adopt appropriate rules to carry out the
11 mandate of this paragraph.
12 If the user who would otherwise pay tax to the retailer
13 wants the transaction reporting return filed and the payment
14 of tax or proof of exemption made to the Department before
15 the retailer is willing to take these actions and such user
16 has not paid the tax to the retailer, such user may certify
17 to the fact of such delay by the retailer, and may (upon the
18 Department being satisfied of the truth of such
19 certification) transmit the information required by the
20 transaction reporting return and the remittance for tax or
21 proof of exemption directly to the Department and obtain his
22 tax receipt or exemption determination, in which event the
23 transaction reporting return and tax remittance (if a tax
24 payment was required) shall be credited by the Department to
25 the proper retailer's account with the Department, but
26 without the 2.1% or 1.75% discount provided for in this
27 Section being allowed. When the user pays the tax directly
28 to the Department, he shall pay the tax in the same amount
29 and in the same form in which it would be remitted if the tax
30 had been remitted to the Department by the retailer.
31 Where a retailer collects the tax with respect to the
32 selling price of tangible personal property which he sells
33 and the purchaser thereafter returns such tangible personal
34 property and the retailer refunds the selling price thereof
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1 to the purchaser, such retailer shall also refund, to the
2 purchaser, the tax so collected from the purchaser. When
3 filing his return for the period in which he refunds such tax
4 to the purchaser, the retailer may deduct the amount of the
5 tax so refunded by him to the purchaser from any other use
6 tax which such retailer may be required to pay or remit to
7 the Department, as shown by such return, if the amount of the
8 tax to be deducted was previously remitted to the Department
9 by such retailer. If the retailer has not previously
10 remitted the amount of such tax to the Department, he is
11 entitled to no deduction under this Act upon refunding such
12 tax to the purchaser.
13 Any retailer filing a return under this Section shall
14 also include (for the purpose of paying tax thereon) the
15 total tax covered by such return upon the selling price of
16 tangible personal property purchased by him at retail from a
17 retailer, but as to which the tax imposed by this Act was not
18 collected from the retailer filing such return, and such
19 retailer shall remit the amount of such tax to the Department
20 when filing such return.
21 If experience indicates such action to be practicable,
22 the Department may prescribe and furnish a combination or
23 joint return which will enable retailers, who are required to
24 file returns hereunder and also under the Retailers'
25 Occupation Tax Act, to furnish all the return information
26 required by both Acts on the one form.
27 Where the retailer has more than one business registered
28 with the Department under separate registration under this
29 Act, such retailer may not file each return that is due as a
30 single return covering all such registered businesses, but
31 shall file separate returns for each such registered
32 business.
33 Beginning January 1, 1990, each month the Department
34 shall pay into the State and Local Sales Tax Reform Fund, a
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1 special fund in the State Treasury which is hereby created,
2 the net revenue realized for the preceding month from the 1%
3 tax on sales of food for human consumption which is to be
4 consumed off the premises where it is sold (other than
5 alcoholic beverages, soft drinks and food which has been
6 prepared for immediate consumption) and prescription and
7 nonprescription medicines, drugs, medical appliances and
8 insulin, urine testing materials, syringes and needles used
9 by diabetics.
10 Beginning January 1, 1990, each month the Department
11 shall pay into the County and Mass Transit District Fund 4%
12 of the net revenue realized for the preceding month from the
13 6.25% general rate on the selling price of tangible personal
14 property which is purchased outside Illinois at retail from a
15 retailer and which is titled or registered by an agency of
16 this State's government.
17 Beginning January 1, 1990, each month the Department
18 shall pay into the State and Local Sales Tax Reform Fund, a
19 special fund in the State Treasury, 20% of the net revenue
20 realized for the preceding month from the 6.25% general rate
21 on the selling price of tangible personal property, other
22 than tangible personal property which is purchased outside
23 Illinois at retail from a retailer and which is titled or
24 registered by an agency of this State's government.
25 Beginning January 1, 1990, each month the Department
26 shall pay into the Local Government Tax Fund 16% of the net
27 revenue realized for the preceding month from the 6.25%
28 general rate on the selling price of tangible personal
29 property which is purchased outside Illinois at retail from a
30 retailer and which is titled or registered by an agency of
31 this State's government.
32 Of the remainder of the moneys received by the Department
33 pursuant to this Act, (a) 1.75% thereof shall be paid into
34 the Build Illinois Fund and (b) prior to July 1, 1989, 2.2%
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1 and on and after July 1, 1989, 3.8% thereof shall be paid
2 into the Build Illinois Fund; provided, however, that if in
3 any fiscal year the sum of (1) the aggregate of 2.2% or 3.8%,
4 as the case may be, of the moneys received by the Department
5 and required to be paid into the Build Illinois Fund pursuant
6 to Section 3 of the Retailers' Occupation Tax Act, Section 9
7 of the Use Tax Act, Section 9 of the Service Use Tax Act, and
8 Section 9 of the Service Occupation Tax Act, such Acts being
9 hereinafter called the "Tax Acts" and such aggregate of 2.2%
10 or 3.8%, as the case may be, of moneys being hereinafter
11 called the "Tax Act Amount", and (2) the amount transferred
12 to the Build Illinois Fund from the State and Local Sales Tax
13 Reform Fund shall be less than the Annual Specified Amount
14 (as defined in Section 3 of the Retailers' Occupation Tax
15 Act), an amount equal to the difference shall be immediately
16 paid into the Build Illinois Fund from other moneys received
17 by the Department pursuant to the Tax Acts; and further
18 provided, that if on the last business day of any month the
19 sum of (1) the Tax Act Amount required to be deposited into
20 the Build Illinois Bond Account in the Build Illinois Fund
21 during such month and (2) the amount transferred during such
22 month to the Build Illinois Fund from the State and Local
23 Sales Tax Reform Fund shall have been less than 1/12 of the
24 Annual Specified Amount, an amount equal to the difference
25 shall be immediately paid into the Build Illinois Fund from
26 other moneys received by the Department pursuant to the Tax
27 Acts; and, further provided, that in no event shall the
28 payments required under the preceding proviso result in
29 aggregate payments into the Build Illinois Fund pursuant to
30 this clause (b) for any fiscal year in excess of the greater
31 of (i) the Tax Act Amount or (ii) the Annual Specified Amount
32 for such fiscal year; and, further provided, that the amounts
33 payable into the Build Illinois Fund under this clause (b)
34 shall be payable only until such time as the aggregate amount
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1 on deposit under each trust indenture securing Bonds issued
2 and outstanding pursuant to the Build Illinois Bond Act is
3 sufficient, taking into account any future investment income,
4 to fully provide, in accordance with such indenture, for the
5 defeasance of or the payment of the principal of, premium, if
6 any, and interest on the Bonds secured by such indenture and
7 on any Bonds expected to be issued thereafter and all fees
8 and costs payable with respect thereto, all as certified by
9 the Director of the Bureau of the Budget. If on the last
10 business day of any month in which Bonds are outstanding
11 pursuant to the Build Illinois Bond Act, the aggregate of the
12 moneys deposited in the Build Illinois Bond Account in the
13 Build Illinois Fund in such month shall be less than the
14 amount required to be transferred in such month from the
15 Build Illinois Bond Account to the Build Illinois Bond
16 Retirement and Interest Fund pursuant to Section 13 of the
17 Build Illinois Bond Act, an amount equal to such deficiency
18 shall be immediately paid from other moneys received by the
19 Department pursuant to the Tax Acts to the Build Illinois
20 Fund; provided, however, that any amounts paid to the Build
21 Illinois Fund in any fiscal year pursuant to this sentence
22 shall be deemed to constitute payments pursuant to clause (b)
23 of the preceding sentence and shall reduce the amount
24 otherwise payable for such fiscal year pursuant to clause (b)
25 of the preceding sentence. The moneys received by the
26 Department pursuant to this Act and required to be deposited
27 into the Build Illinois Fund are subject to the pledge, claim
28 and charge set forth in Section 12 of the Build Illinois Bond
29 Act.
30 Subject to payment of amounts into the Build Illinois
31 Fund as provided in the preceding paragraph or in any
32 amendment thereto hereafter enacted, the following specified
33 monthly installment of the amount requested in the
34 certificate of the Chairman of the Metropolitan Pier and
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1 Exposition Authority provided under Section 8.25f of the
2 State Finance Act, but not in excess of the sums designated
3 as "Total Deposit", shall be deposited in the aggregate from
4 collections under Section 9 of the Use Tax Act, Section 9 of
5 the Service Use Tax Act, Section 9 of the Service Occupation
6 Tax Act, and Section 3 of the Retailers' Occupation Tax Act
7 into the McCormick Place Expansion Project Fund in the
8 specified fiscal years.
9 Fiscal Year Total Deposit
10 1993 $0
11 1994 53,000,000
12 1995 58,000,000
13 1996 61,000,000
14 1997 64,000,000
15 1998 68,000,000
16 1999 71,000,000
17 2000 75,000,000
18 2001 80,000,000
19 2002 84,000,000
20 2003 89,000,000
21 2004 93,000,000
22 2005 97,000,000
23 2006 102,000,000
24 2007 108,000,000
25 2008 115,000,000
26 2009 120,000,000
27 2010 126,000,000
28 2011 132,000,000
29 2012 138,000,000
30 2013 and 145,000,000
31 each fiscal year
32 thereafter that bonds
33 are outstanding under
34 Section 13.2 of the
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1 Metropolitan Pier and
2 Exposition Authority
3 Act, but not after fiscal year 2029.
4 Beginning July 20, 1993 and in each month of each fiscal
5 year thereafter, one-eighth of the amount requested in the
6 certificate of the Chairman of the Metropolitan Pier and
7 Exposition Authority for that fiscal year, less the amount
8 deposited into the McCormick Place Expansion Project Fund by
9 the State Treasurer in the respective month under subsection
10 (g) of Section 13 of the Metropolitan Pier and Exposition
11 Authority Act, plus cumulative deficiencies in the deposits
12 required under this Section for previous months and years,
13 shall be deposited into the McCormick Place Expansion Project
14 Fund, until the full amount requested for the fiscal year,
15 but not in excess of the amount specified above as "Total
16 Deposit", has been deposited.
17 Subject to payment of amounts into the Build Illinois
18 Fund and the McCormick Place Expansion Project Fund pursuant
19 to the preceding paragraphs or in any amendment thereto
20 hereafter enacted, each month the Department shall pay into
21 the Local Government Distributive Fund .4% of the net revenue
22 realized for the preceding month from the 5% general rate, or
23 .4% of 80% of the net revenue realized for the preceding
24 month from the 6.25% general rate, as the case may be, on the
25 selling price of tangible personal property which amount
26 shall, subject to appropriation, be distributed as provided
27 in Section 2 of the State Revenue Sharing Act. No payments or
28 distributions pursuant to this paragraph shall be made if the
29 tax imposed by this Act on photoprocessing products is
30 declared unconstitutional, or if the proceeds from such tax
31 are unavailable for distribution because of litigation.
32 Subject to payment of amounts into the Build Illinois
33 Fund, the McCormick Place Expansion Project Fund, and the
34 Local Government Distributive Fund pursuant to the preceding
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1 paragraphs or in any amendments thereto hereafter enacted,
2 beginning July 1, 1993, the Department shall each month pay
3 into the Illinois Tax Increment Fund 0.27% of 80% of the net
4 revenue realized for the preceding month from the 6.25%
5 general rate on the selling price of tangible personal
6 property.
7 Of the remainder of the moneys received by the Department
8 pursuant to this Act, 75% thereof shall be paid into the
9 State Treasury and 25% shall be reserved in a special account
10 and used only for the transfer to the Common School Fund as
11 part of the monthly transfer from the General Revenue Fund in
12 accordance with Section 8a of the State Finance Act.
13 As soon as possible after the first day of each month,
14 upon certification of the Department of Revenue, the
15 Comptroller shall order transferred and the Treasurer shall
16 transfer from the General Revenue Fund to the Motor Fuel Tax
17 Fund an amount equal to 1.7% of 80% of the net revenue
18 realized under this Act for the second preceding month.
19 Beginning April 1, 2000, this transfer is no longer required
20 and shall not be made.
21 Net revenue realized for a month shall be the revenue
22 collected by the State pursuant to this Act, less the amount
23 paid out during that month as refunds to taxpayers for
24 overpayment of liability.
25 For greater simplicity of administration, manufacturers,
26 importers and wholesalers whose products are sold at retail
27 in Illinois by numerous retailers, and who wish to do so, may
28 assume the responsibility for accounting and paying to the
29 Department all tax accruing under this Act with respect to
30 such sales, if the retailers who are affected do not make
31 written objection to the Department to this arrangement.
32 (Source: P.A. 90-491, eff. 1-1-99; 90-612, eff. 7-8-98;
33 91-37, eff. 7-1-99; 91-51, eff. 6-30-99; 91-101, eff.
34 7-12-99; 91-541, eff. 8-13-99; revised 9-29-99.)
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1 (35 ILCS 105/10) (from Ch. 120, par. 439.10)
2 Sec. 10. Except as to motor vehicles, and aircraft,
3 watercraft, and trailers, when tangible personal property is
4 purchased from a retailer for use in this State by a
5 purchaser who did not pay the tax imposed by this Act to the
6 retailer, and who does not file returns with the Department
7 as a retailer under Section 9 of this Act, such purchaser (by
8 the last day of the month following the calendar month in
9 which such purchaser makes any payment upon the selling price
10 of such property) shall, except as provided in this Section,
11 file a return with the Department and pay the tax upon that
12 portion of the selling price so paid by the purchaser during
13 the preceding calendar month. When tangible personal
14 property, including but not limited to motor vehicles and
15 aircraft, is purchased by a lessor, under a lease for one
16 year or longer, executed or in effect at the time of purchase
17 to an interstate carrier for hire, who did not pay the tax
18 imposed by this Act to the retailer, such lessor (by the last
19 day of the month following the calendar month in which such
20 property reverts to the use of such lessor) shall file a
21 return with the Department and pay the tax upon the fair
22 market value of such property on the date of such reversion.
23 However, in determining the fair market value at the time of
24 reversion, the fair market value of such property shall not
25 exceed the original purchase price of the property that was
26 paid by the lessor at the time of purchase. Such return shall
27 be filed on a form prescribed by the Department and shall
28 contain such information as the Department may reasonably
29 require. Such return and payment from the purchaser shall be
30 submitted to the Department sooner than the last day of the
31 month after the month in which the purchase is made to the
32 extent that that may be necessary in order to secure the
33 title to a motor vehicle or the certificate of registration
34 for an aircraft. However, except as to motor vehicles and
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1 aircraft, if the purchaser's annual use tax liability does
2 not exceed $600, the purchaser may file the return on an
3 annual basis on or before April 15th of the year following
4 the year use tax liability was incurred.
5 In addition with respect to motor vehicles, and aircraft,
6 watercraft, and trailers, a purchaser of such tangible
7 personal property for use in this State, who purchases such
8 tangible personal property from an out-of-state retailer,
9 shall file with the Department, upon a form to be prescribed
10 and supplied by the Department, a return for each such item
11 of tangible personal property purchased, except that if, in
12 the same transaction, (i) a purchaser of motor vehicles,
13 aircraft, watercraft, or trailers who is a retailer of motor
14 vehicles, aircraft, watercraft, or trailers purchases more
15 than one motor vehicle, aircraft, watercraft, or trailer for
16 the purpose of resale or (ii) a purchaser of motor vehicles,
17 aircraft, watercraft, or trailers purchases more than one
18 motor vehicle, aircraft, watercraft, or trailer for use as
19 qualifying rolling stock as provided in Section 3-55 of this
20 Act, then the purchaser may report the purchase of all motor
21 vehicles, aircraft, watercraft, or trailers involved in that
22 transaction to the Department on a single return prescribed
23 by the Department. Such return in the case of motor vehicles
24 and aircraft must show the name and address of the seller,
25 the name, address of purchaser, the amount of the selling
26 price including the amount allowed by the retailer for traded
27 in property, if any; the amount allowed by the retailer for
28 the traded-in tangible personal property, if any, to the
29 extent to which Section 2 of this Act allows an exemption for
30 the value of traded-in property; the balance payable after
31 deducting such trade-in allowance from the total selling
32 price; the amount of tax due from the purchaser with respect
33 to such transaction; the amount of tax collected from the
34 purchaser by the retailer on such transaction (or
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1 satisfactory evidence that such tax is not due in that
2 particular instance if that is claimed to be the fact); the
3 place and date of the sale, a sufficient identification of
4 the property sold, and such other information as the
5 Department may reasonably require.
6 Such return shall be filed not later than 30 days after
7 such motor vehicle or aircraft is brought into this State for
8 use.
9 For purposes of this Section, "watercraft" means a Class
10 2, Class 3, or Class 4 watercraft as defined in Section 3-2
11 of the Boat Registration and Safety Act, a personal
12 watercraft, or any boat equipped with an inboard motor.
13 The return and tax remittance or proof of exemption from
14 the tax that is imposed by this Act may be transmitted to the
15 Department by way of the State agency with which, or State
16 officer with whom, the tangible personal property must be
17 titled or registered (if titling or registration is required)
18 if the Department and such agency or State officer determine
19 that this procedure will expedite the processing of
20 applications for title or registration.
21 With each such return, the purchaser shall remit the
22 proper amount of tax due (or shall submit satisfactory
23 evidence that the sale is not taxable if that is the case),
24 to the Department or its agents, whereupon the Department
25 shall issue, in the purchaser's name, a tax receipt (or a
26 certificate of exemption if the Department is satisfied that
27 the particular sale is tax exempt) which such purchaser may
28 submit to the agency with which, or State officer with whom,
29 he must title or register the tangible personal property that
30 is involved (if titling or registration is required) in
31 support of such purchaser's application for an Illinois
32 certificate or other evidence of title or registration to
33 such tangible personal property.
34 When a purchaser pays a tax imposed by this Act directly
-98- LRB9112999SMdvam04
1 to the Department, the Department (upon request therefor from
2 such purchaser) shall issue an appropriate receipt to such
3 purchaser showing that he has paid such tax to the
4 Department. Such receipt shall be sufficient to relieve the
5 purchaser from further liability for the tax to which such
6 receipt may refer.
7 A user who is liable to pay use tax directly to the
8 Department only occasionally and not on a frequently
9 recurring basis, and who is not required to file returns with
10 the Department as a retailer under Section 9 of this Act, or
11 under the "Retailers' Occupation Tax Act", or as a registrant
12 with the Department under the "Service Occupation Tax Act" or
13 the "Service Use Tax Act", need not register with the
14 Department. However, if such a user has a frequently
15 recurring direct use tax liability to pay to the Department,
16 such user shall be required to register with the Department
17 on forms prescribed by the Department and to obtain and
18 display a certificate of registration from the Department.
19 In that event, all of the provisions of Section 9 of this Act
20 concerning the filing of regular monthly, quarterly or annual
21 tax returns and all of the provisions of Section 2a of the
22 "Retailers' Occupation Tax Act" concerning the requirements
23 for registrants to post bond or other security with the
24 Department, as the provisions of such sections now exist or
25 may hereafter be amended, shall apply to such users to the
26 same extent as if such provisions were included herein.
27 (Source: P.A. 91-541, eff. 8-13-99.)
28 (35 ILCS 105/22) (from Ch. 120, par. 439.22)
29 Sec. 22. If it is determined that the Department should
30 issue a credit or refund under this Act, the Department may
31 first apply the amount thereof against any amount of tax or
32 penalty or interest due hereunder, or under the "Retailers'
33 Occupation Tax Act", the "Service Occupation Tax Act", the
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1 "Service Use Tax Act", any local occupation or use tax
2 administered by the Department the "Municipal Retailers'
3 Occupation Tax Act", the "Municipal Use Tax Act", the
4 "Municipal Service Occupation Tax Act", the "County
5 Retailers' Occupation Tax Act", the "County Supplementary
6 Retailers' Occupation Tax Act", the "County Service
7 Occupation Tax Act", the "County Supplementary Service
8 Occupation Tax Act", the "County Use Tax Act", the "County
9 Supplementary Use Tax Act", Section 4 of the "Water
10 Commission Act of 1985", subsections (b), (c) and (d) of
11 Section 5.01 of the "Local Mass Transit District Act", or
12 subsections (e), (f) and (g) of Section 4.03 of the "Regional
13 Transportation Authority Act", from the person entitled to
14 such credit or refund. For this purpose, if proceedings are
15 pending to determine whether or not any tax or penalty or
16 interest is due under this Act or under the "Retailers'
17 Occupation Tax Act", the "Service Occupation Tax Act", the
18 "Service Use Tax Act", any local occupation or use tax
19 administered by the Department the "Municipal Retailers'
20 Occupation Tax Act", the "Municipal Use Tax Act", the
21 "Municipal Service Occupation Tax Act", the "County
22 Retailers' Occupation Tax Act", the "County Supplementary
23 Retailers' Occupation Tax Act", the "County Service
24 Occupation Tax Act", the "County Supplementary Service
25 Occupation Tax Act", the "County Use Tax Act", the "County
26 Supplementary Use Tax Act", Section 4 of the "Water
27 Commission Act of 1985", subsections (b), (c) and (d) of
28 Section 5.01 of the "Local Mass Transit District Act", or
29 subsections (e), (f) and (g) of Section 4.03 of the "Regional
30 Transportation Authority Act", from such person, the
31 Department may withhold issuance of the credit or refund
32 pending the final disposition of such proceedings and may
33 apply such credit or refund against any amount found to be
34 due to the Department as a result of such proceedings. The
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1 balance, if any, of the credit or refund shall be issued to
2 the person entitled thereto.
3 Any credit memorandum issued hereunder may be used by the
4 authorized holder thereof to pay any tax or penalty or
5 interest due or to become due under this Act or under the
6 "Retailers' Occupation Tax Act", the "Service Occupation Tax
7 Act", the "Service Use Tax Act", any local occupation or use
8 tax administered by the Department the "Municipal Retailers'
9 Occupation Tax Act", the "Municipal Use Tax Act", the
10 "Municipal Service Occupation Tax Act", the "County
11 Retailers' Occupation Tax Act", the "County Supplementary
12 Retailers' Occupation Tax Act", the "County Service
13 Occupation Tax Act", the "County Supplementary Service
14 Occupation Tax Act", the "County Use Tax Act", the "County
15 Supplementary Use Tax Act", Section 4 of the "Water
16 Commission Act of 1985", subsections (b), (c) and (d) of
17 Section 5.01 of the "Local Mass Transit District Act", or
18 subsections (e), (f) and (g) of Section 4.03 of the "Regional
19 Transportation Authority Act", from such holder. Subject to
20 reasonable rules of the Department, a credit memorandum
21 issued hereunder may be assigned by the holder thereof to any
22 other person for use in paying tax or penalty or interest
23 which may be due or become due under this Act or under the
24 "Retailers' Occupation Tax Act", the "Service Occupation Tax
25 Act" or the "Service Use Tax Act", from the assignee.
26 In any case in which there has been an erroneous refund
27 of tax payable under this Act, a notice of tax liability may
28 be issued at any time within 3 years from the making of that
29 refund, or within 5 years from the making of that refund if
30 it appears that any part of the refund was induced by fraud
31 or the misrepresentation of a material fact. The amount of
32 any proposed assessment set forth in the notice shall be
33 limited to the amount of the erroneous refund.
34 (Source: P.A. 87-876.)
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1 Section 15. The Service Use Tax Act is amended by
2 changing Section 20 as follows:
3 (35 ILCS 110/20) (from Ch. 120, par. 439.50)
4 Sec. 20. If it is determined that the Department should
5 issue a credit or refund hereunder, the Department may first
6 apply the amount thereof against any amount of tax or penalty
7 or interest due hereunder, or under the Service Occupation
8 Tax Act, the Retailers' Occupation Tax Act, the Use Tax Act,
9 any local occupation or use tax administered by the
10 Department the Municipal Retailers' Occupation Tax Act, the
11 Municipal Use Tax Act, the Municipal Service Occupation Tax
12 Act, the County Retailers' Occupation Tax Act, the County
13 Supplementary Retailers' Occupation Tax Act, the County
14 Service Occupation Tax Act, the County Supplementary Service
15 Occupation Tax Act, the County Use Tax Act, the County
16 Supplementary Use Tax Act, Section 4 of the Water Commission
17 Act of 1985, subsections (b), (c) and (d) of Section 5.01 of
18 the Local Mass Transit District Act, or subsections (e), (f)
19 and (g) of Section 4.03 of the Regional Transportation
20 Authority Act, from the person entitled to such credit or
21 refund. For this purpose, if proceedings are pending to
22 determine whether or not any tax or penalty or interest is
23 due hereunder, or under the Service Occupation Tax Act, the
24 Retailers' Occupation Tax Act, the Use Tax Act, any local
25 occupation or use tax administered by the Department the
26 Municipal Retailers' Occupation Tax Act, the Municipal Use
27 Tax Act, the Municipal Service Occupation Tax Act, the County
28 Retailers' Occupation Tax Act, the County Supplementary
29 Retailers' Occupation Tax Act, the County Service Occupation
30 Tax Act, the County Supplementary Service Occupation Tax Act,
31 the County Use Tax Act, the County Supplementary Use Tax Act,
32 Section 4 of the Water Commission Act of 1985, subsections
33 (b), (c) and (d) of Section 5.01 of the Local Mass Transit
-102- LRB9112999SMdvam04
1 District Act, or subsections (e), (f) and (g) of Section 4.03
2 of the Regional Transportation Authority Act, from such
3 person, the Department may withhold issuance of the credit or
4 refund pending the final disposition of such proceedings and
5 may apply such credit or refund against any amount found to
6 be due to the Department as a result of such proceedings. The
7 balance, if any, of the credit or refund shall be issued to
8 the person entitled thereto.
9 Any credit memorandum issued hereunder may be used by the
10 authorized holder thereof to pay any tax or penalty or
11 interest due or to become due under this Act, the Service
12 Occupation Tax Act, the Retailers' Occupation Tax Act, the
13 Use Tax Act, any local occupation or use tax administered by
14 the Department the Municipal Retailers' Occupation Tax Act,
15 the Municipal Use Tax Act, the Municipal Service Occupation
16 Tax Act, the County Retailers' Occupation Tax Act, the County
17 Supplementary Retailers' Occupation Tax Act, the County
18 Service Occupation Tax Act, the County Supplementary Service
19 Occupation Tax Act, the County Use Tax Act, the County
20 Supplementary Use Tax Act, Section 4 of the Water Commission
21 Act of 1985, subsections (b), (c) and (d) of Section 5.01 of
22 the Local Mass Transit District Act, or subsections (e), (f)
23 and (g) of Section 4.03 of the Regional Transportation
24 Authority Act, from such holder. Subject to reasonable rules
25 of the Department, a credit memorandum issued hereunder may
26 be assigned by the holder thereof to any other person for use
27 in paying tax or penalty or interest which may be due or
28 become due under this Act, the Service Occupation Tax Act,
29 the Retailers' Occupation Tax Act, the Use Tax Act, any local
30 occupation or use tax administered by the Department the
31 Municipal Retailers' Occupation Tax Act, the Municipal Use
32 Tax Act, the Municipal Service Occupation Tax Act, the County
33 Retailers' Occupation Tax Act, the County Supplementary
34 Retailers' Occupation Tax Act, the County Service Occupation
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1 Tax Act, the County Supplementary Service Occupation Tax Act,
2 the County Use Tax Act, the County Supplementary Use Tax Act,
3 Section 4 of the Water Commission Act of 1985, subsections
4 (b), (c) and (d) of Section 5.01 of the Local Mass Transit
5 District Act, or subsections (e), (f) and (g) of Section 4.03
6 of the Regional Transportation Authority Act, from the
7 assignee.
8 In any case which there has been an erroneous refund of
9 tax payable under this Act, a notice of tax liability may be
10 issued at any time within 3 years from the making of that
11 refund, or within 5 years from the making of that refund if
12 it appears that any part of the refund was induced by fraud
13 or the misrepresentation of a material fact. The amount of
14 any proposed assessment set forth in the notice shall be
15 limited to the amount of the erroneous refund.
16 (Source: P.A. 87-876.)
17 Section 20. The Service Occupation Tax Act is amended by
18 changing Section 20 as follows:
19 (35 ILCS 115/20) (from Ch. 120, par. 439.120)
20 Sec. 20. If it is determined that the Department should
21 issue a credit or refund hereunder, the Department may first
22 apply the amount thereof against any amount of tax or penalty
23 or interest due hereunder, or under the Service Use Tax Act,
24 the Retailers' Occupation Tax Act, the Use Tax Act, any local
25 occupation or use tax administered by the Department the
26 Municipal Retailers' Occupation Tax Act, the Municipal Use
27 Tax Act, the Municipal Service Occupation Tax Act, the County
28 Retailers' Occupation Tax Act, the County Supplementary
29 Retailers' Occupation Tax Act, the County Service Occupation
30 Tax Act, the County Supplementary Service Occupation Tax Act,
31 the County Use Tax Act, the County Supplementary Use Tax Act,
32 Section 4 of the Water Commission Act of 1985, subsections
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1 (b), (c) and (d) of Section 5.01 of the Local Mass Transit
2 District Act, or subsections (e), (f) and (g) of Section 4.03
3 of the Regional Transportation Authority Act, from the person
4 entitled to such credit or refund. For this purpose, if
5 proceedings are pending to determine whether or not any tax
6 or penalty or interest is due hereunder, or under the Service
7 Use Tax Act, the Retailers' Occupation Tax Act, the Use Tax
8 Act, any local occupation or use tax administered by the
9 Department the Municipal Retailers' Occupation Tax Act, the
10 Municipal Use Tax Act, the Municipal Service Occupation Tax
11 Act, the County Retailers' Occupation Tax Act, the County
12 Supplementary Retailers' Occupation Tax Act, the County
13 Service Occupation Tax Act, the County Supplementary Service
14 Occupation Tax Act, the County Use Tax Act, the County
15 Supplementary Use Tax Act, Section 4 of the Water Commission
16 Act of 1985, subsections (b), (c) and (d) of Section 5.01 of
17 the Local Mass Transit District Act, or subsections (e), (f)
18 and (g) of Section 4.03 of the Regional Transportation
19 Authority Act, from such person, the Department may withhold
20 issuance of the credit or refund pending the final
21 disposition of such proceedings and may apply such credit or
22 refund against any amount found to be due to the Department
23 as a result of such proceedings. The balance, if any, of the
24 credit or refund shall be issued to the person entitled
25 thereto.
26 Any credit memorandum issued hereunder may be used by the
27 authorized holder thereof to pay any tax or penalty or
28 interest due or to become due under this Act, or under the
29 Service Use Tax Act, the Retailers' Occupation Tax Act, the
30 Use Tax Act, any local occupation or use tax administered by
31 the Department the Municipal Retailers' Occupation Tax Act,
32 the Municipal Use Tax Act, the Municipal Service Occupation
33 Tax Act, the County Retailers' Occupation Tax Act, the County
34 Supplementary Retailers' Occupation Tax Act, the County
-105- LRB9112999SMdvam04
1 Service Occupation Tax Act, the County Supplementary Service
2 Occupation Tax Act, the County Use Tax Act, the County
3 Supplementary Use Tax Act, Section 4 of the Water Commission
4 Act of 1985, subsections (b), (c) and (d) of Section 5.01 of
5 the Local Mass Transit District Act, or subsections (e), (f)
6 and (g) of Section 4.03 of the Regional Transportation
7 Authority Act, from such holder. Subject to reasonable rules
8 of the Department, a credit memorandum issued hereunder may
9 be assigned by the holder thereof to any other person for use
10 in paying tax or penalty or interest which may be due or
11 become due under this Act, the Service Use Tax Act, the
12 Retailers' Occupation Tax Act, the Use Tax Act, any local
13 occupation or use tax administered by the Department the
14 Municipal Retailers' Occupation Tax Act, the Municipal Use
15 Tax Act, the Municipal Service Occupation Tax Act, the County
16 Retailers' Occupation Tax Act, the County Supplementary
17 Retailers' Occupation Tax Act, the County Service Occupation
18 Tax Act, the County Supplementary Service Occupation Tax Act,
19 the County Use Tax Act, the County Supplementary Use Tax Act,
20 Section 4 of the Water Commission Act of 1985, subsections
21 (b), (c) and (d) of Section 5.01 of the Local Mass Transit
22 District Act, or subsections (e), (f) and (g) of Section 4.03
23 of the Regional Transportation Authority Act, from the
24 assignee.
25 In any case in which there has been an erroneous refund
26 of tax payable under this Act, a notice of tax liability may
27 be issued at any time within 3 years from the making of that
28 refund, or within 5 years from the making of that refund if
29 it appears that any part of the refund was induced by fraud
30 or the misrepresentation of a material fact. The amount of
31 any proposed assessment set forth in the notice shall be
32 limited to the amount of the erroneous refund.
33 (Source: P.A. 87-876.)
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1 Section 25. The Retailers' Occupation Tax Act is amended
2 by changing Sections 3, 5k, and 6 as follows:
3 (35 ILCS 120/3) (from Ch. 120, par. 442)
4 Sec. 3. Except as provided in this Section, on or before
5 the twentieth day of each calendar month, every person
6 engaged in the business of selling tangible personal property
7 at retail in this State during the preceding calendar month
8 shall file a return with the Department, stating:
9 1. The name of the seller;
10 2. His residence address and the address of his
11 principal place of business and the address of the
12 principal place of business (if that is a different
13 address) from which he engages in the business of selling
14 tangible personal property at retail in this State;
15 3. Total amount of receipts received by him during
16 the preceding calendar month or quarter, as the case may
17 be, from sales of tangible personal property, and from
18 services furnished, by him during such preceding calendar
19 month or quarter;
20 4. Total amount received by him during the
21 preceding calendar month or quarter on charge and time
22 sales of tangible personal property, and from services
23 furnished, by him prior to the month or quarter for which
24 the return is filed;
25 5. Deductions allowed by law;
26 6. Gross receipts which were received by him during
27 the preceding calendar month or quarter and upon the
28 basis of which the tax is imposed;
29 7. The amount of credit provided in Section 2d of
30 this Act;
31 8. The amount of tax due;
32 9. The signature of the taxpayer; and
33 10. Such other reasonable information as the
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1 Department may require.
2 If a taxpayer fails to sign a return within 30 days after
3 the proper notice and demand for signature by the Department,
4 the return shall be considered valid and any amount shown to
5 be due on the return shall be deemed assessed.
6 Each return shall be accompanied by the statement of
7 prepaid tax issued pursuant to Section 2e for which credit is
8 claimed.
9 A retailer may accept a Manufacturer's Purchase Credit
10 certification from a purchaser in satisfaction of Use Tax as
11 provided in Section 3-85 of the Use Tax Act if the purchaser
12 provides the appropriate documentation as required by Section
13 3-85 of the Use Tax Act. A Manufacturer's Purchase Credit
14 certification, accepted by a retailer as provided in Section
15 3-85 of the Use Tax Act, may be used by that retailer to
16 satisfy Retailers' Occupation Tax liability in the amount
17 claimed in the certification, not to exceed 6.25% of the
18 receipts subject to tax from a qualifying purchase.
19 The Department may require returns to be filed on a
20 quarterly basis. If so required, a return for each calendar
21 quarter shall be filed on or before the twentieth day of the
22 calendar month following the end of such calendar quarter.
23 The taxpayer shall also file a return with the Department for
24 each of the first two months of each calendar quarter, on or
25 before the twentieth day of the following calendar month,
26 stating:
27 1. The name of the seller;
28 2. The address of the principal place of business
29 from which he engages in the business of selling tangible
30 personal property at retail in this State;
31 3. The total amount of taxable receipts received by
32 him during the preceding calendar month from sales of
33 tangible personal property by him during such preceding
34 calendar month, including receipts from charge and time
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1 sales, but less all deductions allowed by law;
2 4. The amount of credit provided in Section 2d of
3 this Act;
4 5. The amount of tax due; and
5 6. Such other reasonable information as the
6 Department may require.
7 If a total amount of less than $1 is payable, refundable
8 or creditable, such amount shall be disregarded if it is less
9 than 50 cents and shall be increased to $1 if it is 50 cents
10 or more.
11 Beginning October 1, 1993, a taxpayer who has an average
12 monthly tax liability of $150,000 or more shall make all
13 payments required by rules of the Department by electronic
14 funds transfer. Beginning October 1, 1994, a taxpayer who
15 has an average monthly tax liability of $100,000 or more
16 shall make all payments required by rules of the Department
17 by electronic funds transfer. Beginning October 1, 1995, a
18 taxpayer who has an average monthly tax liability of $50,000
19 or more shall make all payments required by rules of the
20 Department by electronic funds transfer. Beginning October
21 1, 2000, a taxpayer who has an annual tax liability of
22 $200,000 or more shall make all payments required by rules of
23 the Department by electronic funds transfer. The term
24 "annual tax liability" shall be the sum of the taxpayer's
25 liabilities under this Act, and under all other State and
26 local occupation and use tax laws administered by the
27 Department, for the immediately preceding calendar year. The
28 term "average monthly tax liability" shall be the sum of the
29 taxpayer's liabilities under this Act, and under all other
30 State and local occupation and use tax laws administered by
31 the Department, for the immediately preceding calendar year
32 divided by 12.
33 Before August 1 of each year beginning in 1993, the
34 Department shall notify all taxpayers required to make
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1 payments by electronic funds transfer. All taxpayers
2 required to make payments by electronic funds transfer shall
3 make those payments for a minimum of one year beginning on
4 October 1.
5 Any taxpayer not required to make payments by electronic
6 funds transfer may make payments by electronic funds transfer
7 with the permission of the Department.
8 All taxpayers required to make payment by electronic
9 funds transfer and any taxpayers authorized to voluntarily
10 make payments by electronic funds transfer shall make those
11 payments in the manner authorized by the Department.
12 The Department shall adopt such rules as are necessary to
13 effectuate a program of electronic funds transfer and the
14 requirements of this Section.
15 Any amount which is required to be shown or reported on
16 any return or other document under this Act shall, if such
17 amount is not a whole-dollar amount, be increased to the
18 nearest whole-dollar amount in any case where the fractional
19 part of a dollar is 50 cents or more, and decreased to the
20 nearest whole-dollar amount where the fractional part of a
21 dollar is less than 50 cents.
22 If the retailer is otherwise required to file a monthly
23 return and if the retailer's average monthly tax liability to
24 the Department does not exceed $200, the Department may
25 authorize his returns to be filed on a quarter annual basis,
26 with the return for January, February and March of a given
27 year being due by April 20 of such year; with the return for
28 April, May and June of a given year being due by July 20 of
29 such year; with the return for July, August and September of
30 a given year being due by October 20 of such year, and with
31 the return for October, November and December of a given year
32 being due by January 20 of the following year.
33 If the retailer is otherwise required to file a monthly
34 or quarterly return and if the retailer's average monthly tax
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1 liability with the Department does not exceed $50, the
2 Department may authorize his returns to be filed on an annual
3 basis, with the return for a given year being due by January
4 20 of the following year.
5 Such quarter annual and annual returns, as to form and
6 substance, shall be subject to the same requirements as
7 monthly returns.
8 Notwithstanding any other provision in this Act
9 concerning the time within which a retailer may file his
10 return, in the case of any retailer who ceases to engage in a
11 kind of business which makes him responsible for filing
12 returns under this Act, such retailer shall file a final
13 return under this Act with the Department not more than one
14 month after discontinuing such business.
15 Where the same person has more than one business
16 registered with the Department under separate registrations
17 under this Act, such person may not file each return that is
18 due as a single return covering all such registered
19 businesses, but shall file separate returns for each such
20 registered business.
21 In addition, with respect to motor vehicles, watercraft,
22 aircraft, and trailers that are required to be registered
23 with an agency of this State, every retailer selling this
24 kind of tangible personal property shall file, with the
25 Department, upon a form to be prescribed and supplied by the
26 Department, a separate return for each such item of tangible
27 personal property which the retailer sells, except that if
28 where, in the same transaction, (i) a retailer of aircraft,
29 watercraft, motor vehicles or trailers transfers more than
30 one aircraft, watercraft, motor vehicle or trailer to another
31 aircraft, watercraft, motor vehicle retailer or trailer
32 retailer for the purpose of resale or (ii) a retailer of
33 aircraft, watercraft, motor vehicles, or trailers transfers
34 more than one aircraft, watercraft, motor vehicle, or trailer
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1 to a purchaser for use as a qualifying rolling stock as
2 provided in Section 2-5 of this Act, then that seller for
3 resale may report the transfer of all aircraft, watercraft,
4 motor vehicles or trailers involved in that transaction to
5 the Department on the same uniform invoice-transaction
6 reporting return form. For purposes of this Section,
7 "watercraft" means a Class 2, Class 3, or Class 4 watercraft
8 as defined in Section 3-2 of the Boat Registration and Safety
9 Act, a personal watercraft, or any boat equipped with an
10 inboard motor.
11 Any retailer who sells only motor vehicles, watercraft,
12 aircraft, or trailers that are required to be registered with
13 an agency of this State, so that all retailers' occupation
14 tax liability is required to be reported, and is reported, on
15 such transaction reporting returns and who is not otherwise
16 required to file monthly or quarterly returns, need not file
17 monthly or quarterly returns. However, those retailers shall
18 be required to file returns on an annual basis.
19 The transaction reporting return, in the case of motor
20 vehicles or trailers that are required to be registered with
21 an agency of this State, shall be the same document as the
22 Uniform Invoice referred to in Section 5-402 of The Illinois
23 Vehicle Code and must show the name and address of the
24 seller; the name and address of the purchaser; the amount of
25 the selling price including the amount allowed by the
26 retailer for traded-in property, if any; the amount allowed
27 by the retailer for the traded-in tangible personal property,
28 if any, to the extent to which Section 1 of this Act allows
29 an exemption for the value of traded-in property; the balance
30 payable after deducting such trade-in allowance from the
31 total selling price; the amount of tax due from the retailer
32 with respect to such transaction; the amount of tax collected
33 from the purchaser by the retailer on such transaction (or
34 satisfactory evidence that such tax is not due in that
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1 particular instance, if that is claimed to be the fact); the
2 place and date of the sale; a sufficient identification of
3 the property sold; such other information as is required in
4 Section 5-402 of The Illinois Vehicle Code, and such other
5 information as the Department may reasonably require.
6 The transaction reporting return in the case of
7 watercraft or aircraft must show the name and address of the
8 seller; the name and address of the purchaser; the amount of
9 the selling price including the amount allowed by the
10 retailer for traded-in property, if any; the amount allowed
11 by the retailer for the traded-in tangible personal property,
12 if any, to the extent to which Section 1 of this Act allows
13 an exemption for the value of traded-in property; the balance
14 payable after deducting such trade-in allowance from the
15 total selling price; the amount of tax due from the retailer
16 with respect to such transaction; the amount of tax collected
17 from the purchaser by the retailer on such transaction (or
18 satisfactory evidence that such tax is not due in that
19 particular instance, if that is claimed to be the fact); the
20 place and date of the sale, a sufficient identification of
21 the property sold, and such other information as the
22 Department may reasonably require.
23 Such transaction reporting return shall be filed not
24 later than 20 days after the day of delivery of the item that
25 is being sold, but may be filed by the retailer at any time
26 sooner than that if he chooses to do so. The transaction
27 reporting return and tax remittance or proof of exemption
28 from the Illinois use tax may be transmitted to the
29 Department by way of the State agency with which, or State
30 officer with whom the tangible personal property must be
31 titled or registered (if titling or registration is required)
32 if the Department and such agency or State officer determine
33 that this procedure will expedite the processing of
34 applications for title or registration.
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1 With each such transaction reporting return, the retailer
2 shall remit the proper amount of tax due (or shall submit
3 satisfactory evidence that the sale is not taxable if that is
4 the case), to the Department or its agents, whereupon the
5 Department shall issue, in the purchaser's name, a use tax
6 receipt (or a certificate of exemption if the Department is
7 satisfied that the particular sale is tax exempt) which such
8 purchaser may submit to the agency with which, or State
9 officer with whom, he must title or register the tangible
10 personal property that is involved (if titling or
11 registration is required) in support of such purchaser's
12 application for an Illinois certificate or other evidence of
13 title or registration to such tangible personal property.
14 No retailer's failure or refusal to remit tax under this
15 Act precludes a user, who has paid the proper tax to the
16 retailer, from obtaining his certificate of title or other
17 evidence of title or registration (if titling or registration
18 is required) upon satisfying the Department that such user
19 has paid the proper tax (if tax is due) to the retailer. The
20 Department shall adopt appropriate rules to carry out the
21 mandate of this paragraph.
22 If the user who would otherwise pay tax to the retailer
23 wants the transaction reporting return filed and the payment
24 of the tax or proof of exemption made to the Department
25 before the retailer is willing to take these actions and such
26 user has not paid the tax to the retailer, such user may
27 certify to the fact of such delay by the retailer and may
28 (upon the Department being satisfied of the truth of such
29 certification) transmit the information required by the
30 transaction reporting return and the remittance for tax or
31 proof of exemption directly to the Department and obtain his
32 tax receipt or exemption determination, in which event the
33 transaction reporting return and tax remittance (if a tax
34 payment was required) shall be credited by the Department to
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1 the proper retailer's account with the Department, but
2 without the 2.1% or 1.75% discount provided for in this
3 Section being allowed. When the user pays the tax directly
4 to the Department, he shall pay the tax in the same amount
5 and in the same form in which it would be remitted if the tax
6 had been remitted to the Department by the retailer.
7 Refunds made by the seller during the preceding return
8 period to purchasers, on account of tangible personal
9 property returned to the seller, shall be allowed as a
10 deduction under subdivision 5 of his monthly or quarterly
11 return, as the case may be, in case the seller had
12 theretofore included the receipts from the sale of such
13 tangible personal property in a return filed by him and had
14 paid the tax imposed by this Act with respect to such
15 receipts.
16 Where the seller is a corporation, the return filed on
17 behalf of such corporation shall be signed by the president,
18 vice-president, secretary or treasurer or by the properly
19 accredited agent of such corporation.
20 Where the seller is a limited liability company, the
21 return filed on behalf of the limited liability company shall
22 be signed by a manager, member, or properly accredited agent
23 of the limited liability company.
24 Except as provided in this Section, the retailer filing
25 the return under this Section shall, at the time of filing
26 such return, pay to the Department the amount of tax imposed
27 by this Act less a discount of 2.1% prior to January 1, 1990
28 and 1.75% on and after January 1, 1990, or $5 per calendar
29 year, whichever is greater, which is allowed to reimburse the
30 retailer for the expenses incurred in keeping records,
31 preparing and filing returns, remitting the tax and supplying
32 data to the Department on request. Any prepayment made
33 pursuant to Section 2d of this Act shall be included in the
34 amount on which such 2.1% or 1.75% discount is computed. In
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1 the case of retailers who report and pay the tax on a
2 transaction by transaction basis, as provided in this
3 Section, such discount shall be taken with each such tax
4 remittance instead of when such retailer files his periodic
5 return.
6 Before October 1, 2000, if the taxpayer's average monthly
7 tax liability to the Department under this Act, the Use Tax
8 Act, the Service Occupation Tax Act, and the Service Use Tax
9 Act, excluding any liability for prepaid sales tax to be
10 remitted in accordance with Section 2d of this Act, was
11 $10,000 or more during the preceding 4 complete calendar
12 quarters, he shall file a return with the Department each
13 month by the 20th day of the month next following the month
14 during which such tax liability is incurred and shall make
15 payments to the Department on or before the 7th, 15th, 22nd
16 and last day of the month during which such liability is
17 incurred. On and after October 1, 2000, if the taxpayer's
18 average monthly tax liability to the Department under this
19 Act, the Use Tax Act, the Service Occupation Tax Act, and the
20 Service Use Tax Act, excluding any liability for prepaid
21 sales tax to be remitted in accordance with Section 2d of
22 this Act, was $20,000 or more during the preceding 4 complete
23 calendar quarters, he shall file a return with the Department
24 each month by the 20th day of the month next following the
25 month during which such tax liability is incurred and shall
26 make payment to the Department on or before the 7th, 15th,
27 22nd and last day of the month during which such liability is
28 incurred. If the month during which such tax liability is
29 incurred began prior to January 1, 1985, each payment shall
30 be in an amount equal to 1/4 of the taxpayer's actual
31 liability for the month or an amount set by the Department
32 not to exceed 1/4 of the average monthly liability of the
33 taxpayer to the Department for the preceding 4 complete
34 calendar quarters (excluding the month of highest liability
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1 and the month of lowest liability in such 4 quarter period).
2 If the month during which such tax liability is incurred
3 begins on or after January 1, 1985 and prior to January 1,
4 1987, each payment shall be in an amount equal to 22.5% of
5 the taxpayer's actual liability for the month or 27.5% of the
6 taxpayer's liability for the same calendar month of the
7 preceding year. If the month during which such tax liability
8 is incurred begins on or after January 1, 1987 and prior to
9 January 1, 1988, each payment shall be in an amount equal to
10 22.5% of the taxpayer's actual liability for the month or
11 26.25% of the taxpayer's liability for the same calendar
12 month of the preceding year. If the month during which such
13 tax liability is incurred begins on or after January 1, 1988,
14 and prior to January 1, 1989, or begins on or after January
15 1, 1996, each payment shall be in an amount equal to 22.5% of
16 the taxpayer's actual liability for the month or 25% of the
17 taxpayer's liability for the same calendar month of the
18 preceding year. If the month during which such tax liability
19 is incurred begins on or after January 1, 1989, and prior to
20 January 1, 1996, each payment shall be in an amount equal to
21 22.5% of the taxpayer's actual liability for the month or 25%
22 of the taxpayer's liability for the same calendar month of
23 the preceding year or 100% of the taxpayer's actual liability
24 for the quarter monthly reporting period. The amount of such
25 quarter monthly payments shall be credited against the final
26 tax liability of the taxpayer's return for that month.
27 Before October 1, 2000, once applicable, the requirement of
28 the making of quarter monthly payments to the Department by
29 taxpayers having an average monthly tax liability of $10,000
30 or more as determined in the manner provided above shall
31 continue until such taxpayer's average monthly liability to
32 the Department during the preceding 4 complete calendar
33 quarters (excluding the month of highest liability and the
34 month of lowest liability) is less than $9,000, or until such
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1 taxpayer's average monthly liability to the Department as
2 computed for each calendar quarter of the 4 preceding
3 complete calendar quarter period is less than $10,000.
4 However, if a taxpayer can show the Department that a
5 substantial change in the taxpayer's business has occurred
6 which causes the taxpayer to anticipate that his average
7 monthly tax liability for the reasonably foreseeable future
8 will fall below the $10,000 threshold stated above, then such
9 taxpayer may petition the Department for a change in such
10 taxpayer's reporting status. On and after October 1, 2000,
11 once applicable, the requirement of the making of quarter
12 monthly payments to the Department by taxpayers having an
13 average monthly tax liability of $20,000 or more as
14 determined in the manner provided above shall continue until
15 such taxpayer's average monthly liability to the Department
16 during the preceding 4 complete calendar quarters (excluding
17 the month of highest liability and the month of lowest
18 liability) is less than $19,000 or until such taxpayer's
19 average monthly liability to the Department as computed for
20 each calendar quarter of the 4 preceding complete calendar
21 quarter period is less than $20,000. However, if a taxpayer
22 can show the Department that a substantial change in the
23 taxpayer's business has occurred which causes the taxpayer to
24 anticipate that his average monthly tax liability for the
25 reasonably foreseeable future will fall below the $20,000
26 threshold stated above, then such taxpayer may petition the
27 Department for a change in such taxpayer's reporting status.
28 The Department shall change such taxpayer's reporting status
29 unless it finds that such change is seasonal in nature and
30 not likely to be long term. If any such quarter monthly
31 payment is not paid at the time or in the amount required by
32 this Section, then the taxpayer shall be liable for penalties
33 and interest on the difference between the minimum amount due
34 as a payment and the amount of such quarter monthly payment
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1 actually and timely paid, except insofar as the taxpayer has
2 previously made payments for that month to the Department in
3 excess of the minimum payments previously due as provided in
4 this Section. The Department shall make reasonable rules and
5 regulations to govern the quarter monthly payment amount and
6 quarter monthly payment dates for taxpayers who file on other
7 than a calendar monthly basis.
8 Without regard to whether a taxpayer is required to make
9 quarter monthly payments as specified above, any taxpayer who
10 is required by Section 2d of this Act to collect and remit
11 prepaid taxes and has collected prepaid taxes which average
12 in excess of $25,000 per month during the preceding 2
13 complete calendar quarters, shall file a return with the
14 Department as required by Section 2f and shall make payments
15 to the Department on or before the 7th, 15th, 22nd and last
16 day of the month during which such liability is incurred. If
17 the month during which such tax liability is incurred began
18 prior to the effective date of this amendatory Act of 1985,
19 each payment shall be in an amount not less than 22.5% of the
20 taxpayer's actual liability under Section 2d. If the month
21 during which such tax liability is incurred begins on or
22 after January 1, 1986, each payment shall be in an amount
23 equal to 22.5% of the taxpayer's actual liability for the
24 month or 27.5% of the taxpayer's liability for the same
25 calendar month of the preceding calendar year. If the month
26 during which such tax liability is incurred begins on or
27 after January 1, 1987, each payment shall be in an amount
28 equal to 22.5% of the taxpayer's actual liability for the
29 month or 26.25% of the taxpayer's liability for the same
30 calendar month of the preceding year. The amount of such
31 quarter monthly payments shall be credited against the final
32 tax liability of the taxpayer's return for that month filed
33 under this Section or Section 2f, as the case may be. Once
34 applicable, the requirement of the making of quarter monthly
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1 payments to the Department pursuant to this paragraph shall
2 continue until such taxpayer's average monthly prepaid tax
3 collections during the preceding 2 complete calendar quarters
4 is $25,000 or less. If any such quarter monthly payment is
5 not paid at the time or in the amount required, the taxpayer
6 shall be liable for penalties and interest on such
7 difference, except insofar as the taxpayer has previously
8 made payments for that month in excess of the minimum
9 payments previously due.
10 If any payment provided for in this Section exceeds the
11 taxpayer's liabilities under this Act, the Use Tax Act, the
12 Service Occupation Tax Act and the Service Use Tax Act, as
13 shown on an original monthly return, the Department shall, if
14 requested by the taxpayer, issue to the taxpayer a credit
15 memorandum no later than 30 days after the date of payment.
16 The credit evidenced by such credit memorandum may be
17 assigned by the taxpayer to a similar taxpayer under this
18 Act, the Use Tax Act, the Service Occupation Tax Act or the
19 Service Use Tax Act, in accordance with reasonable rules and
20 regulations to be prescribed by the Department. If no such
21 request is made, the taxpayer may credit such excess payment
22 against tax liability subsequently to be remitted to the
23 Department under this Act, the Use Tax Act, the Service
24 Occupation Tax Act or the Service Use Tax Act, in accordance
25 with reasonable rules and regulations prescribed by the
26 Department. If the Department subsequently determined that
27 all or any part of the credit taken was not actually due to
28 the taxpayer, the taxpayer's 2.1% and 1.75% vendor's discount
29 shall be reduced by 2.1% or 1.75% of the difference between
30 the credit taken and that actually due, and that taxpayer
31 shall be liable for penalties and interest on such
32 difference.
33 If a retailer of motor fuel is entitled to a credit under
34 Section 2d of this Act which exceeds the taxpayer's liability
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1 to the Department under this Act for the month which the
2 taxpayer is filing a return, the Department shall issue the
3 taxpayer a credit memorandum for the excess.
4 Beginning January 1, 1990, each month the Department
5 shall pay into the Local Government Tax Fund, a special fund
6 in the State treasury which is hereby created, the net
7 revenue realized for the preceding month from the 1% tax on
8 sales of food for human consumption which is to be consumed
9 off the premises where it is sold (other than alcoholic
10 beverages, soft drinks and food which has been prepared for
11 immediate consumption) and prescription and nonprescription
12 medicines, drugs, medical appliances and insulin, urine
13 testing materials, syringes and needles used by diabetics.
14 Beginning January 1, 1990, each month the Department
15 shall pay into the County and Mass Transit District Fund, a
16 special fund in the State treasury which is hereby created,
17 4% of the net revenue realized for the preceding month from
18 the 6.25% general rate.
19 Beginning January 1, 1990, each month the Department
20 shall pay into the Local Government Tax Fund 16% of the net
21 revenue realized for the preceding month from the 6.25%
22 general rate on the selling price of tangible personal
23 property.
24 Of the remainder of the moneys received by the Department
25 pursuant to this Act, (a) 1.75% thereof shall be paid into
26 the Build Illinois Fund and (b) prior to July 1, 1989, 2.2%
27 and on and after July 1, 1989, 3.8% thereof shall be paid
28 into the Build Illinois Fund; provided, however, that if in
29 any fiscal year the sum of (1) the aggregate of 2.2% or 3.8%,
30 as the case may be, of the moneys received by the Department
31 and required to be paid into the Build Illinois Fund pursuant
32 to this Act, Section 9 of the Use Tax Act, Section 9 of the
33 Service Use Tax Act, and Section 9 of the Service Occupation
34 Tax Act, such Acts being hereinafter called the "Tax Acts"
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1 and such aggregate of 2.2% or 3.8%, as the case may be, of
2 moneys being hereinafter called the "Tax Act Amount", and (2)
3 the amount transferred to the Build Illinois Fund from the
4 State and Local Sales Tax Reform Fund shall be less than the
5 Annual Specified Amount (as hereinafter defined), an amount
6 equal to the difference shall be immediately paid into the
7 Build Illinois Fund from other moneys received by the
8 Department pursuant to the Tax Acts; the "Annual Specified
9 Amount" means the amounts specified below for fiscal years
10 1986 through 1993:
11 Fiscal Year Annual Specified Amount
12 1986 $54,800,000
13 1987 $76,650,000
14 1988 $80,480,000
15 1989 $88,510,000
16 1990 $115,330,000
17 1991 $145,470,000
18 1992 $182,730,000
19 1993 $206,520,000;
20 and means the Certified Annual Debt Service Requirement (as
21 defined in Section 13 of the Build Illinois Bond Act) or the
22 Tax Act Amount, whichever is greater, for fiscal year 1994
23 and each fiscal year thereafter; and further provided, that
24 if on the last business day of any month the sum of (1) the
25 Tax Act Amount required to be deposited into the Build
26 Illinois Bond Account in the Build Illinois Fund during such
27 month and (2) the amount transferred to the Build Illinois
28 Fund from the State and Local Sales Tax Reform Fund shall
29 have been less than 1/12 of the Annual Specified Amount, an
30 amount equal to the difference shall be immediately paid into
31 the Build Illinois Fund from other moneys received by the
32 Department pursuant to the Tax Acts; and, further provided,
33 that in no event shall the payments required under the
34 preceding proviso result in aggregate payments into the Build
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1 Illinois Fund pursuant to this clause (b) for any fiscal year
2 in excess of the greater of (i) the Tax Act Amount or (ii)
3 the Annual Specified Amount for such fiscal year. The
4 amounts payable into the Build Illinois Fund under clause (b)
5 of the first sentence in this paragraph shall be payable only
6 until such time as the aggregate amount on deposit under each
7 trust indenture securing Bonds issued and outstanding
8 pursuant to the Build Illinois Bond Act is sufficient, taking
9 into account any future investment income, to fully provide,
10 in accordance with such indenture, for the defeasance of or
11 the payment of the principal of, premium, if any, and
12 interest on the Bonds secured by such indenture and on any
13 Bonds expected to be issued thereafter and all fees and costs
14 payable with respect thereto, all as certified by the
15 Director of the Bureau of the Budget. If on the last
16 business day of any month in which Bonds are outstanding
17 pursuant to the Build Illinois Bond Act, the aggregate of
18 moneys deposited in the Build Illinois Bond Account in the
19 Build Illinois Fund in such month shall be less than the
20 amount required to be transferred in such month from the
21 Build Illinois Bond Account to the Build Illinois Bond
22 Retirement and Interest Fund pursuant to Section 13 of the
23 Build Illinois Bond Act, an amount equal to such deficiency
24 shall be immediately paid from other moneys received by the
25 Department pursuant to the Tax Acts to the Build Illinois
26 Fund; provided, however, that any amounts paid to the Build
27 Illinois Fund in any fiscal year pursuant to this sentence
28 shall be deemed to constitute payments pursuant to clause (b)
29 of the first sentence of this paragraph and shall reduce the
30 amount otherwise payable for such fiscal year pursuant to
31 that clause (b). The moneys received by the Department
32 pursuant to this Act and required to be deposited into the
33 Build Illinois Fund are subject to the pledge, claim and
34 charge set forth in Section 12 of the Build Illinois Bond
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1 Act.
2 Subject to payment of amounts into the Build Illinois
3 Fund as provided in the preceding paragraph or in any
4 amendment thereto hereafter enacted, the following specified
5 monthly installment of the amount requested in the
6 certificate of the Chairman of the Metropolitan Pier and
7 Exposition Authority provided under Section 8.25f of the
8 State Finance Act, but not in excess of sums designated as
9 "Total Deposit", shall be deposited in the aggregate from
10 collections under Section 9 of the Use Tax Act, Section 9 of
11 the Service Use Tax Act, Section 9 of the Service Occupation
12 Tax Act, and Section 3 of the Retailers' Occupation Tax Act
13 into the McCormick Place Expansion Project Fund in the
14 specified fiscal years.
15 Fiscal Year Total Deposit
16 1993 $0
17 1994 53,000,000
18 1995 58,000,000
19 1996 61,000,000
20 1997 64,000,000
21 1998 68,000,000
22 1999 71,000,000
23 2000 75,000,000
24 2001 80,000,000
25 2002 84,000,000
26 2003 89,000,000
27 2004 93,000,000
28 2005 97,000,000
29 2006 102,000,000
30 2007 108,000,000
31 2008 115,000,000
32 2009 120,000,000
33 2010 126,000,000
34 2011 132,000,000
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1 2012 138,000,000
2 2013 and 145,000,000
3 each fiscal year
4 thereafter that bonds
5 are outstanding under
6 Section 13.2 of the
7 Metropolitan Pier and
8 Exposition Authority
9 Act, but not after fiscal year 2029.
10 Beginning July 20, 1993 and in each month of each fiscal
11 year thereafter, one-eighth of the amount requested in the
12 certificate of the Chairman of the Metropolitan Pier and
13 Exposition Authority for that fiscal year, less the amount
14 deposited into the McCormick Place Expansion Project Fund by
15 the State Treasurer in the respective month under subsection
16 (g) of Section 13 of the Metropolitan Pier and Exposition
17 Authority Act, plus cumulative deficiencies in the deposits
18 required under this Section for previous months and years,
19 shall be deposited into the McCormick Place Expansion Project
20 Fund, until the full amount requested for the fiscal year,
21 but not in excess of the amount specified above as "Total
22 Deposit", has been deposited.
23 Subject to payment of amounts into the Build Illinois
24 Fund and the McCormick Place Expansion Project Fund pursuant
25 to the preceding paragraphs or in any amendment thereto
26 hereafter enacted, each month the Department shall pay into
27 the Local Government Distributive Fund 0.4% of the net
28 revenue realized for the preceding month from the 5% general
29 rate or 0.4% of 80% of the net revenue realized for the
30 preceding month from the 6.25% general rate, as the case may
31 be, on the selling price of tangible personal property which
32 amount shall, subject to appropriation, be distributed as
33 provided in Section 2 of the State Revenue Sharing Act. No
34 payments or distributions pursuant to this paragraph shall be
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1 made if the tax imposed by this Act on photoprocessing
2 products is declared unconstitutional, or if the proceeds
3 from such tax are unavailable for distribution because of
4 litigation.
5 Subject to payment of amounts into the Build Illinois
6 Fund, the McCormick Place Expansion Project to the preceding
7 paragraphs or in any amendments thereto hereafter enacted,
8 beginning July 1, 1993, the Department shall each month pay
9 into the Illinois Tax Increment Fund 0.27% of 80% of the net
10 revenue realized for the preceding month from the 6.25%
11 general rate on the selling price of tangible personal
12 property.
13 Of the remainder of the moneys received by the Department
14 pursuant to this Act, 75% thereof shall be paid into the
15 State Treasury and 25% shall be reserved in a special account
16 and used only for the transfer to the Common School Fund as
17 part of the monthly transfer from the General Revenue Fund in
18 accordance with Section 8a of the State Finance Act.
19 The Department may, upon separate written notice to a
20 taxpayer, require the taxpayer to prepare and file with the
21 Department on a form prescribed by the Department within not
22 less than 60 days after receipt of the notice an annual
23 information return for the tax year specified in the notice.
24 Such annual return to the Department shall include a
25 statement of gross receipts as shown by the retailer's last
26 Federal income tax return. If the total receipts of the
27 business as reported in the Federal income tax return do not
28 agree with the gross receipts reported to the Department of
29 Revenue for the same period, the retailer shall attach to his
30 annual return a schedule showing a reconciliation of the 2
31 amounts and the reasons for the difference. The retailer's
32 annual return to the Department shall also disclose the cost
33 of goods sold by the retailer during the year covered by such
34 return, opening and closing inventories of such goods for
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1 such year, costs of goods used from stock or taken from stock
2 and given away by the retailer during such year, payroll
3 information of the retailer's business during such year and
4 any additional reasonable information which the Department
5 deems would be helpful in determining the accuracy of the
6 monthly, quarterly or annual returns filed by such retailer
7 as provided for in this Section.
8 If the annual information return required by this Section
9 is not filed when and as required, the taxpayer shall be
10 liable as follows:
11 (i) Until January 1, 1994, the taxpayer shall be
12 liable for a penalty equal to 1/6 of 1% of the tax due
13 from such taxpayer under this Act during the period to be
14 covered by the annual return for each month or fraction
15 of a month until such return is filed as required, the
16 penalty to be assessed and collected in the same manner
17 as any other penalty provided for in this Act.
18 (ii) On and after January 1, 1994, the taxpayer
19 shall be liable for a penalty as described in Section 3-4
20 of the Uniform Penalty and Interest Act.
21 The chief executive officer, proprietor, owner or highest
22 ranking manager shall sign the annual return to certify the
23 accuracy of the information contained therein. Any person
24 who willfully signs the annual return containing false or
25 inaccurate information shall be guilty of perjury and
26 punished accordingly. The annual return form prescribed by
27 the Department shall include a warning that the person
28 signing the return may be liable for perjury.
29 The provisions of this Section concerning the filing of
30 an annual information return do not apply to a retailer who
31 is not required to file an income tax return with the United
32 States Government.
33 As soon as possible after the first day of each month,
34 upon certification of the Department of Revenue, the
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1 Comptroller shall order transferred and the Treasurer shall
2 transfer from the General Revenue Fund to the Motor Fuel Tax
3 Fund an amount equal to 1.7% of 80% of the net revenue
4 realized under this Act for the second preceding month.
5 Beginning April 1, 2000, this transfer is no longer required
6 and shall not be made.
7 Net revenue realized for a month shall be the revenue
8 collected by the State pursuant to this Act, less the amount
9 paid out during that month as refunds to taxpayers for
10 overpayment of liability.
11 For greater simplicity of administration, manufacturers,
12 importers and wholesalers whose products are sold at retail
13 in Illinois by numerous retailers, and who wish to do so, may
14 assume the responsibility for accounting and paying to the
15 Department all tax accruing under this Act with respect to
16 such sales, if the retailers who are affected do not make
17 written objection to the Department to this arrangement.
18 Any person who promotes, organizes, provides retail
19 selling space for concessionaires or other types of sellers
20 at the Illinois State Fair, DuQuoin State Fair, county fairs,
21 local fairs, art shows, flea markets and similar exhibitions
22 or events, including any transient merchant as defined by
23 Section 2 of the Transient Merchant Act of 1987, is required
24 to file a report with the Department providing the name of
25 the merchant's business, the name of the person or persons
26 engaged in merchant's business, the permanent address and
27 Illinois Retailers Occupation Tax Registration Number of the
28 merchant, the dates and location of the event and other
29 reasonable information that the Department may require. The
30 report must be filed not later than the 20th day of the month
31 next following the month during which the event with retail
32 sales was held. Any person who fails to file a report
33 required by this Section commits a business offense and is
34 subject to a fine not to exceed $250.
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1 Any person engaged in the business of selling tangible
2 personal property at retail as a concessionaire or other type
3 of seller at the Illinois State Fair, county fairs, art
4 shows, flea markets and similar exhibitions or events, or any
5 transient merchants, as defined by Section 2 of the Transient
6 Merchant Act of 1987, may be required to make a daily report
7 of the amount of such sales to the Department and to make a
8 daily payment of the full amount of tax due. The Department
9 shall impose this requirement when it finds that there is a
10 significant risk of loss of revenue to the State at such an
11 exhibition or event. Such a finding shall be based on
12 evidence that a substantial number of concessionaires or
13 other sellers who are not residents of Illinois will be
14 engaging in the business of selling tangible personal
15 property at retail at the exhibition or event, or other
16 evidence of a significant risk of loss of revenue to the
17 State. The Department shall notify concessionaires and other
18 sellers affected by the imposition of this requirement. In
19 the absence of notification by the Department, the
20 concessionaires and other sellers shall file their returns as
21 otherwise required in this Section.
22 (Source: P.A. 90-491, eff. 1-1-99; 90-612, eff. 7-8-98;
23 91-37, eff. 7-1-99; 91-51, eff. 6-30-99; 91-101, eff.
24 7-12-99; 91-541, eff. 8-13-99; revised 9-29-99.)
25 (35 ILCS 120/5k) (from Ch. 120, par. 444k)
26 Sec. 5k. Each retailer in Illinois whose place a
27 business is within a county or municipality which has
28 established an Enterprise Zone pursuant to the "Illinois
29 Enterprise Zone Act" and who makes a sale of building
30 materials to be incorporated into real estate in an such
31 enterprise zone established by a county or municipality under
32 the Illinois Enterprise Zone Act by remodeling,
33 rehabilitation or new construction, may deduct receipts from
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1 such sales when calculating the tax imposed by this Act. The
2 deduction allowed by this Section for the sale of building
3 materials may be limited, to the extent authorized by
4 ordinance, adopted after the effective date of this
5 amendatory Act of 1992, by the municipality or county that
6 created the enterprise zone in which the retailer's place of
7 business is located. The corporate authorities of any
8 municipality or county that adopts an ordinance or resolution
9 imposing or changing any limitation on the enterprise zone
10 exemption for building materials shall transmit to the
11 Department of Revenue on or not later than 5 days after
12 publication, as provided by law, a certified copy of the
13 ordinance or resolution imposing or changing those
14 limitations, whereupon the Department of Revenue shall
15 proceed to administer and enforce those limitations effective
16 the first day of the second calendar month next following
17 date of receipt by the Department of the certified ordinance
18 or resolution. The provisions of this Section are exempt
19 from Section 2-70.
20 (Source: P.A. 91-51, eff. 6-30-99.)
21 (35 ILCS 120/6) (from Ch. 120, par. 445)
22 Sec. 6. Credit memorandum or refund. If it appears, after
23 claim therefor filed with the Department, that an amount of
24 tax or penalty or interest has been paid which was not due
25 under this Act, whether as the result of a mistake of fact or
26 an error of law, except as hereinafter provided, then the
27 Department shall issue a credit memorandum or refund to the
28 person who made the erroneous payment or, if that person died
29 or became a person under legal disability, to his or her
30 legal representative, as such. For purposes of this Section,
31 the tax is deemed to be erroneously paid by a retailer when
32 the manufacturer of a motor vehicle sold by the retailer
33 accepts the return of that automobile and refunds to the
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1 purchaser the selling price of that vehicle as provided in
2 the New Vehicle Buyer Protection Act. When a motor vehicle is
3 returned for a refund of the purchase price under the New
4 Vehicle Buyer Protection Act, the Department shall issue a
5 credit memorandum or a refund for the amount of tax paid by
6 the retailer under this Act attributable to the initial sale
7 of that vehicle. Claims submitted by the retailer are subject
8 to the same restrictions and procedures provided for in this
9 Act. If it is determined that the Department should issue a
10 credit memorandum or refund, the Department may first apply
11 the amount thereof against any tax or penalty or interest due
12 or to become due under this Act or under the Use Tax Act, the
13 Service Occupation Tax Act, the Service Use Tax Act, any
14 local occupation or use tax administered by the Department
15 the Municipal Retailers' Occupation Tax Act, the Municipal
16 Use Tax Act, the Municipal Service Occupation Tax Act, the
17 County Retailers' Occupation Tax Act, the County
18 Supplementary Retailers' Occupation Tax Act, the County
19 Service Occupation Tax Act, the County Supplementary Service
20 Occupation Tax Act, the County Use Tax Act, the County
21 Supplementary Use Tax Act, Section 4 of the Water Commission
22 Act of 1985, subsections (b), (c) and (d) of Section 5.01 of
23 the Local Mass Transit District Act, or subsections (e), (f)
24 and (g) of Section 4.03 of the Regional Transportation
25 Authority Act, from the person who made the erroneous
26 payment. If no tax or penalty or interest is due and no
27 proceeding is pending to determine whether such person is
28 indebted to the Department for tax or penalty or interest,
29 the credit memorandum or refund shall be issued to the
30 claimant; or (in the case of a credit memorandum) the credit
31 memorandum may be assigned and set over by the lawful holder
32 thereof, subject to reasonable rules of the Department, to
33 any other person who is subject to this Act, the Use Tax Act,
34 the Service Occupation Tax Act, the Service Use Tax Act, any
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1 local occupation or use tax administered by the Department
2 the Municipal Retailers' Occupation Tax Act, the Municipal
3 Use Tax Act, the Municipal Service Occupation Tax Act, the
4 County Retailers' Occupation Tax Act, the County
5 Supplementary Retailers' Occupation Tax Act, the County
6 Service Occupation Tax Act, the County Supplementary Service
7 Occupation Tax Act, the County Use Tax Act, the County
8 Supplementary Use Tax Act, Section 4 of the Water Commission
9 Act of 1985, subsections (b), (c) and (d) of Section 5.01 of
10 the Local Mass Transit District Act, or subsections (e), (f)
11 and (g) of Section 4.03 of the Regional Transportation
12 Authority Act, and the amount thereof applied by the
13 Department against any tax or penalty or interest due or to
14 become due under this Act or under the Use Tax Act, the
15 Service Occupation Tax Act, the Service Use Tax Act, any
16 local occupation or use tax administered by the Department
17 the Municipal Retailers' Occupation Tax Act, the Municipal
18 Use Tax Act, the Municipal Service Occupation Tax Act, the
19 County Retailers' Occupation Tax Act, the County
20 Supplementary Retailers' Occupation Tax Act, the County
21 Service Occupation Tax Act, the County Supplementary Service
22 Occupation Tax Act, the County Use Tax Act, the County
23 Supplementary Use Tax Act, Section 4 of the Water Commission
24 Act of 1985, subsections (b), (c) and (d) of Section 5.01 of
25 the Local Mass Transit District Act, or subsections (e), (f)
26 and (g) of Section 4.03 of the Regional Transportation
27 Authority Act, from such assignee. However, as to any claim
28 for credit or refund filed with the Department on and after
29 each January 1 and July 1 no amount of tax or penalty or
30 interest erroneously paid (either in total or partial
31 liquidation of a tax or penalty or amount of interest under
32 this Act) more than 3 years prior to such January 1 and July
33 1, respectively, shall be credited or refunded, except that
34 if both the Department and the taxpayer have agreed to an
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1 extension of time to issue a notice of tax liability as
2 provided in Section 4 of this Act, such claim may be filed at
3 any time prior to the expiration of the period agreed upon.
4 No claim may be allowed for any amount paid to the
5 Department, whether paid voluntarily or involuntarily, if
6 paid in total or partial liquidation of an assessment which
7 had become final before the claim for credit or refund to
8 recover the amount so paid is filed with the Department, or
9 if paid in total or partial liquidation of a judgment or
10 order of court. No credit may be allowed or refund made for
11 any amount paid by or collected from any claimant unless it
12 appears (a) that the claimant bore the burden of such amount
13 and has not been relieved thereof nor reimbursed therefor and
14 has not shifted such burden directly or indirectly through
15 inclusion of such amount in the price of the tangible
16 personal property sold by him or her or in any manner
17 whatsoever; and that no understanding or agreement, written
18 or oral, exists whereby he or she or his or her legal
19 representative may be relieved of the burden of such amount,
20 be reimbursed therefor or may shift the burden thereof; or
21 (b) that he or she or his or her legal representative has
22 repaid unconditionally such amount to his or her vendee (1)
23 who bore the burden thereof and has not shifted such burden
24 directly or indirectly, in any manner whatsoever; (2) who, if
25 he or she has shifted such burden, has repaid unconditionally
26 such amount to his own vendee; and (3) who is not entitled to
27 receive any reimbursement therefor from any other source than
28 from his or her vendor, nor to be relieved of such burden in
29 any manner whatsoever. No credit may be allowed or refund
30 made for any amount paid by or collected from any claimant
31 unless it appears that the claimant has unconditionally
32 repaid, to the purchaser, any amount collected from the
33 purchaser and retained by the claimant with respect to the
34 same transaction under the Use Tax Act.
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1 Any credit or refund that is allowed under this Section
2 shall bear interest at the rate and in the manner specified
3 in the Uniform Penalty and Interest Act.
4 In case the Department determines that the claimant is
5 entitled to a refund, such refund shall be made only from
6 such appropriation as may be available for that purpose. If
7 it appears unlikely that the amount appropriated would permit
8 everyone having a claim allowed during the period covered by
9 such appropriation to elect to receive a cash refund, the
10 Department, by rule or regulation, shall provide for the
11 payment of refunds in hardship cases and shall define what
12 types of cases qualify as hardship cases.
13 If a retailer who has failed to pay retailers' occupation
14 tax on gross receipts from retail sales is required by the
15 Department to pay such tax, such retailer, without filing any
16 formal claim with the Department, shall be allowed to take
17 credit against such retailers' occupation tax liability to
18 the extent, if any, to which such retailer has paid an amount
19 equivalent to retailers' occupation tax or has paid use tax
20 in error to his or her vendor or vendors of the same tangible
21 personal property which such retailer bought for resale and
22 did not first use before selling it, and no penalty or
23 interest shall be charged to such retailer on the amount of
24 such credit. However, when such credit is allowed to the
25 retailer by the Department, the vendor is precluded from
26 refunding any of that tax to the retailer and filing a claim
27 for credit or refund with respect thereto with the
28 Department. The provisions of this amendatory Act shall be
29 applied retroactively, regardless of the date of the
30 transaction.
31 (Source: P.A. 89-359, eff. 8-17-95.)
32 Section 30. The Cigarette Tax Act is amended by changing
33 Sections 4 and 6 as follows:
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1 (35 ILCS 130/4) (from Ch. 120, par. 453.4)
2 Sec. 4. Distributor's license. No person may engage in
3 business as a distributor of cigarettes in this State within
4 the meaning of the first 2 definitions of distributor in
5 Section 1 of this Act without first having obtained a license
6 therefor from the Department. Application for license shall
7 be made to the Department in form as furnished and prescribed
8 by the Department. Each applicant for a license under this
9 Section shall furnish to the Department on the form signed
10 and verified by the applicant the following information:
11 (a) The name and address of the applicant;
12 (b) The address of the location at which the applicant
13 proposes to engage in business as a distributor of cigarettes
14 in this State;
15 (c) Such other additional information as the Department
16 may lawfully require by its rules and regulations.
17 The annual license fee payable to the Department for each
18 distributor's license shall be $250. The purpose of such
19 annual license fee is to defray the cost, to the Department,
20 of coding, serializing or coding and serializing cigarette
21 tax stamps. Each applicant for license shall pay such fee to
22 the Department at the time of submitting his application for
23 license to the Department.
24 Every applicant who is required to procure a
25 distributor's license shall file with his application a joint
26 and several bond. Such bond shall be executed to the
27 Department of Revenue, with good and sufficient surety or
28 sureties residing or licensed to do business within the State
29 of Illinois, in the amount of $2,500, conditioned upon the
30 true and faithful compliance by the licensee with all of the
31 provisions of this Act. Such bond, or a reissue thereof, or a
32 substitute therefor, shall be kept in effect during the
33 entire period covered by the license. A separate application
34 for license shall be made, a separate annual license fee
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1 paid, and a separate bond filed, for each place of business
2 at which a person who is required to procure a distributor's
3 license under this Section proposes to engage in business as
4 a distributor in Illinois under this Act.
5 The following are ineligible to receive a distributor's
6 license under this Act:
7 (1) a person who is not of good character and reputation
8 in the community in which he resides;
9 (2) a person who has been convicted of a felony under
10 any Federal or State law, if the Department, after
11 investigation and a hearing, if requested by the applicant,
12 determines that such person has not been sufficiently
13 rehabilitated to warrant the public trust;
14 (3) a corporation, if any officer, manager or director
15 thereof, or any stockholder or stockholders owning in the
16 aggregate more than 5% of the stock of such corporation,
17 would not be eligible to receive a license under this Act for
18 any reason.
19 The Department, upon receipt of an application, license
20 fee and bond in proper form, from a person who is eligible to
21 receive a distributor's license under this Act, shall issue
22 to such applicant a license in form as prescribed by the
23 Department, which license shall permit the applicant to which
24 it is issued to engage in business as a distributor at the
25 place shown in his application. All licenses issued by the
26 Department under this Act shall be valid for not to exceed
27 one year after issuance unless sooner revoked, canceled or
28 suspended as provided in this Act. No license issued under
29 this Act is transferable or assignable. Such license shall be
30 conspicuously displayed in the place of business conducted by
31 the licensee in Illinois under such license.
32 Any person aggrieved by any decision of the Department
33 under this Section may, within 20 days after notice of the
34 decision, protest and request a hearing. Upon receiving a
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1 request for a hearing, the Department shall give notice to
2 the person requesting the hearing of the time and place fixed
3 for the hearing and shall hold a hearing in conformity with
4 the provisions of this Act and then issue its final
5 administrative decision in the matter to that person. In the
6 absence of a protest and request for a hearing within 20
7 days, the Department's decision shall become final without
8 any further determination being made or notice given.
9 (Source: P.A. 78-255.)
10 (35 ILCS 130/6) (from Ch. 120, par. 453.6)
11 Sec. 6. Revocation, cancellation, or suspension of
12 license. The Department may, after notice and hearing as
13 provided for by this Act, revoke, cancel or suspend the
14 license of any distributor for the violation of any provision
15 of this Act, or for noncompliance with any provision herein
16 contained, or for any noncompliance with any lawful rule or
17 regulation promulgated by the Department under Section 8 of
18 this Act, or because the licensee is determined to be
19 ineligible for a distributor's license for any one or more of
20 the reasons provided for in Section 4 of this Act. However,
21 no such license shall be revoked, cancelled or suspended,
22 except after a hearing by the Department with notice to the
23 distributor, as aforesaid, and affording such distributor a
24 reasonable opportunity to appear and defend, and any
25 distributor aggrieved by any decision of the Department with
26 respect thereto may have the determination of the Department
27 judicially reviewed, as herein provided. Notice of such
28 hearing shall be in writing and shall contain a statement of
29 the charges preferred against the distributor.
30 Any distributor aggrieved by any decision of the
31 Department under this Section may, within 20 days after
32 notice of the decision, protest and request a hearing. Upon
33 receiving a request for a hearing, the Department shall give
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1 notice in writing to the distributor requesting the hearing
2 that contains a statement of the charges preferred against
3 the distributor and that states the time and place fixed for
4 the hearing. The Department shall hold the hearing in
5 conformity with the provisions of this Act and then issue its
6 final administrative decision in the matter to the
7 distributor. In the absence of a protest and request for a
8 hearing within 20 days, the Department's decision shall
9 become final without any further determination being made or
10 notice given.
11 No license so revoked, as aforesaid, shall be reissued to
12 any such distributor within a period of 6 months after the
13 date of the final determination of such revocation. No such
14 license shall be reissued at all so long as the person who
15 would receive the license is ineligible to receive a
16 distributor's license under this Act for any one or more of
17 the reasons provided for in Section 4 of this Act.
18 The Department upon complaint filed in the circuit court
19 may by injunction restrain any person who fails, or refuses,
20 to comply with any of the provisions of this Act from acting
21 as a distributor of cigarettes in this State.
22 (Source: P.A. 79-1365; 79-1366.)
23 Section 35. The Cigarette Use Tax Act is amended by
24 changing Sections 4 and 6 as follows:
25 (35 ILCS 135/4) (from Ch. 120, par. 453.34)
26 Sec. 4. Distributor's license. A distributor maintaining
27 a place of business in this State, if required to procure a
28 license or allowed to obtain a permit as a distributor under
29 the Cigarette Tax Act, need not obtain an additional license
30 or permit under this Act, but shall be deemed to be
31 sufficiently licensed or registered by virtue of his being
32 licensed or registered under the Cigarette Tax Act.
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1 Every distributor maintaining a place of business in this
2 State, if not required to procure a license or allowed to
3 obtain a permit as a distributor under the Cigarette Tax Act,
4 shall make a verified application to the Department (upon a
5 form prescribed and furnished by the Department) for a
6 license to act as a distributor under this Act. In completing
7 such application, the applicant shall furnish such
8 information as the Department may reasonably require.
9 The annual license fee payable to the Department for each
10 distributor's license shall be $250. The purpose of such
11 annual license fee is to defray the cost, to the Department,
12 of coding, serializing or coding and serializing cigarette
13 tax stamps. The applicant for license shall pay such fee to
14 the Department at the time of submitting the application for
15 license to the Department.
16 Such applicant shall file, with his application, a joint
17 and several bond. Such bond shall be executed to the
18 Department of Revenue, with good and sufficient surety or
19 sureties residing or licensed to do business within the State
20 of Illinois, in the amount of $2,500, conditioned upon the
21 true and faithful compliance by the licensee with all of the
22 provisions of this Act. Such bond, or a reissue thereof, or a
23 substitute therefor, shall be kept in effect during the
24 entire period covered by the license. A separate application
25 for license shall be made, a separate annual license fee
26 paid, and a separate bond filed, for each place of business
27 at or from which the applicant proposes to act as a
28 distributor under this Act and for which the applicant is not
29 required to procure a license or allowed to obtain a permit
30 as a distributor under the Cigarette Tax Act.
31 The following are ineligible to receive a distributor's
32 license under this Act:
33 (1) a person who is not of good character and reputation
34 in the community in which he resides;
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1 (2) a person who has been convicted of a felony under
2 any Federal or State law, if the Department, after
3 investigation and a hearing, if requested by the applicant,
4 determines that such person has not been sufficiently
5 rehabilitated to warrant the public trust;
6 (3) a corporation, if any officer, manager or director
7 thereof, or any stockholder or stockholders owning in the
8 aggregate more than 5% of the stock of such corporation,
9 would not be eligible to receive a license hereunder for any
10 reason.
11 Upon approval of such application and bond and payment of
12 the required annual license fee, the Department shall issue a
13 license to the applicant. Such license shall permit the
14 applicant to engage in business as a distributor at or from
15 the place shown in his application. All licenses issued by
16 the Department under this Act shall be valid for not to
17 exceed one year after issuance unless sooner revoked,
18 canceled or suspended as in this Act provided. No license
19 issued under this Act is transferable or assignable. Such
20 license shall be conspicuously displayed at the place of
21 business for which it is issued.
22 Any person aggrieved by any decision of the Department
23 under this Section may, within 20 days after notice of the
24 decision, protest and request a hearing. Upon receiving a
25 request for a hearing, the Department shall give notice to
26 the person requesting the hearing of the time and place fixed
27 for the hearing and shall hold a hearing in conformity with
28 the provisions of this Act and then issue its final
29 administrative decision in the matter to that person. In the
30 absence of a protest and request for a hearing within 20
31 days, the Department's decision shall become final without
32 any further determination being made or notice given.
33 (Source: P.A. 78-255.)
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1 (35 ILCS 135/6) (from Ch. 120, par. 453.36)
2 Sec. 6. Revocation, cancellation, or suspension of
3 license. The Department may, after notice and hearing as
4 provided for by this Act, revoke, cancel or suspend the
5 license of any distributor for the violation of any provision
6 of this Act, or for non-compliance with any provision herein
7 contained, or for any non-compliance with any lawful rule or
8 regulation promulgated by the Department under Section 21 of
9 this Act, or because the licensee is determined to be
10 ineligible for a distributor's license for any one or more of
11 the reasons provided for in Section 4 of this Act. However,
12 no such license shall be revoked, canceled or suspended,
13 except after a hearing by the Department with notice to the
14 distributor, as aforesaid, and affording such distributor a
15 reasonable opportunity to appear and defend, and any
16 distributor aggrieved by any decision of the Department with
17 respect thereto may have the determination of the Department
18 judicially reviewed, as herein provided. Notice of such
19 hearing shall be in writing and shall contain a statement of
20 the charges preferred against the distributor.
21 Any distributor aggrieved by any decision of the
22 Department under this Section may, within 20 days after
23 notice of the decision, protest and request a hearing. Upon
24 receiving a request for a hearing, the Department shall give
25 notice in writing to the distributor requesting the hearing
26 that contains a statement of the charges preferred against
27 the distributor and that states the time and place fixed for
28 the hearing. The Department shall hold the hearing in
29 conformity with the provisions of this Act and then issue its
30 final administrative decision in the matter to the
31 distributor. In the absence of a protest and request for a
32 hearing within 20 days, the Department's decision shall
33 become final without any further determination being made or
34 notice given.
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1 No license so revoked, shall be reissued to any such
2 distributor within a period of 6 months after the date of the
3 final determination of such revocation. No such license
4 shall be reissued at all so long as the person who would
5 receive the license is ineligible to receive a distributor's
6 license under this Act for any one or more of the reasons
7 provided for in Section 4 of this Act.
8 The Department upon complaint filed in the circuit court
9 may by injunction restrain any person who fails, or refuses,
10 to comply with this Act from acting as a distributor of
11 cigarettes in this State.
12 (Source: P.A. 79-1365; 79-1366.)
13 Section 40. The Public Utilities Act is amended by
14 changing Section 8-403.1 as follows:
15 (220 ILCS 5/8-403.1) (from Ch. 111 2/3, par. 8-403.1)
16 Sec. 8-403.1. Electricity purchased from qualified solid
17 waste energy facility; tax credit; distributions for economic
18 development.
19 (a) It is hereby declared to be the policy of this State
20 to encourage the development of alternate energy production
21 facilities in order to conserve our energy resources and to
22 provide for their most efficient use.
23 (b) For the purpose of this Section and Section 9-215.1,
24 "qualified solid waste energy facility" means a facility
25 determined by the Illinois Commerce Commission to qualify as
26 such under the Local Solid Waste Disposal Act, to use methane
27 gas generated from landfills as its primary fuel, and to
28 possess characteristics that would enable it to qualify as a
29 cogeneration or small power production facility under federal
30 law.
31 (c) In furtherance of the policy declared in this
32 Section, the Illinois Commerce Commission shall require
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1 electric utilities to enter into long-term contracts to
2 purchase electricity from qualified solid waste energy
3 facilities located in the electric utility's service area,
4 for a period beginning on the date that the facility begins
5 generating electricity and having a duration of not less than
6 10 years in the case of facilities fueled by
7 landfill-generated methane, or 20 years in the case of
8 facilities fueled by methane generated from a landfill owned
9 by a forest preserve district. The purchase rate contained
10 in such contracts shall be equal to the average amount per
11 kilowatt-hour paid from time to time by the unit or units of
12 local government in which the electricity generating
13 facilities are located, excluding amounts paid for street
14 lighting and pumping service.
15 (d) Whenever a public utility is required to purchase
16 electricity pursuant to subsection (c) above, it shall be
17 entitled to credits in respect of its obligations to remit to
18 the State taxes it has collected under the Electricity Excise
19 Tax Law equal to the amounts, if any, by which payments for
20 such electricity exceed (i) the then current rate at which
21 the utility must purchase the output of qualified facilities
22 pursuant to the federal Public Utility Regulatory Policies
23 Act of 1978, less (ii) any costs, expenses, losses, damages
24 or other amounts incurred by the utility, or for which it
25 becomes liable, arising out of its failure to obtain such
26 electricity from such other sources. The amount of any such
27 credit shall, in the first instance, be determined by the
28 utility, which shall make a monthly report of such credits to
29 the Illinois Commerce Commission and, on its monthly tax
30 return, to the Illinois Department of Revenue. Under no
31 circumstances shall a utility be required to purchase
32 electricity from a qualified solid waste energy facility at
33 the rate prescribed in subsection (c) of this Section if such
34 purchase would result in estimated tax credits that exceed,
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1 on a monthly basis, the utility's estimated obligation to
2 remit to the State taxes it has collected under the
3 Electricity Excise Tax Law. The owner or operator shall
4 negotiate facility operating conditions with the purchasing
5 utility in accordance with that utility's posted standard
6 terms and conditions for small power producers. If the
7 Department of Revenue disputes the amount of any such credit,
8 such dispute shall be decided by the Illinois Commerce
9 Commission. Whenever a qualified solid waste energy facility
10 has paid or otherwise satisfied in full the capital costs or
11 indebtedness incurred in developing and implementing the
12 qualified facility, the qualified facility shall reimburse
13 the Public Utility Fund and the General Revenue Fund in the
14 State treasury for the actual reduction in payments to those
15 Funds caused by this subsection (d) in a manner to be
16 determined by the Illinois Commerce Commission and based on
17 the manner in which revenues for those Funds were reduced.
18 (e) The Illinois Commerce Commission shall not require
19 an electric utility to purchase electricity from any
20 qualified solid waste energy facility which is owned or
21 operated by an entity that is primarily engaged in the
22 business of producing or selling electricity, gas, or useful
23 thermal energy from a source other than one or more qualified
24 solid waste energy facilities.
25 (f) This Section does not require an electric utility to
26 construct additional facilities unless those facilities are
27 paid for by the owner or operator of the affected qualified
28 solid waste energy facility.
29 (g) The Illinois Commerce Commission shall require that:
30 (1) electric utilities use the electricity purchased from a
31 qualified solid waste energy facility to displace electricity
32 generated from nuclear power or coal mined and purchased
33 outside the boundaries of the State of Illinois before
34 displacing electricity generated from coal mined and
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1 purchased within the State of Illinois, to the extent
2 possible, and (2) electric utilities report annually to the
3 Commission on the extent of such displacements.
4 (h) Nothing in this Section is intended to cause an
5 electric utility that is required to purchase power hereunder
6 to incur any economic loss as a result of its purchase. All
7 amounts paid for power which a utility is required to
8 purchase pursuant to subparagraph (c) shall be deemed to be
9 costs prudently incurred for purposes of computing charges
10 under rates authorized by Section 9-220 of this Act. Tax
11 credits provided for herein shall be reflected in charges
12 made pursuant to rates so authorized to the extent such
13 credits are based upon a cost which is also reflected in such
14 charges.
15 (i) Beginning in February 1999 and through January 2009,
16 each qualified solid waste energy facility that sells
17 electricity to an electric utility at the purchase rate
18 described in subsection (c) shall file with the Department of
19 Revenue State Treasurer on or before the 15th of each month a
20 form, prescribed by the Department of Revenue State
21 Treasurer, that states the number of kilowatt hours of
22 electricity for which payment was received at that purchase
23 rate from electric utilities in Illinois during the
24 immediately preceding month. This form shall be accompanied
25 by a payment from the qualified solid waste energy facility
26 in an amount equal to six-tenths of a mill ($0.0006) per
27 kilowatt hour of electricity stated on the form. Payments
28 received by the Department of Revenue State Treasurer shall
29 be deposited into the Municipal Economic Development Fund, a
30 trust fund created outside the State treasury. The State
31 Treasurer may invest the moneys in the Fund in any investment
32 authorized by the Public Funds Investment Act, and investment
33 income shall be deposited into and become part of the Fund.
34 Moneys in the Fund shall be used by the State Treasurer as
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1 provided in subsection (j). The obligation of a qualified
2 solid waste energy facility to make payments into the
3 Municipal Economic Development Fund shall terminate upon
4 either: (1) expiration or termination of a facility's
5 contract to sell electricity to an electric utility at the
6 purchase rate described in subsection (c); or (2) entry of an
7 enforceable, final, and non-appealable order by a court of
8 competent jurisdiction that Public Act 89-448 is invalid.
9 Payments by a qualified solid waste energy facility into the
10 Municipal Economic Development Fund do not relieve the
11 qualified solid waste energy facility of its obligation to
12 reimburse the Public Utility Fund and the General Revenue
13 Fund for the actual reduction in payments to those Funds as a
14 result of credits received by electric utilities under
15 subsection (d).
16 (j) The State Treasurer, without appropriation, must
17 make distributions immediately after January 15, April 15,
18 July 15, and October 15 of each year, up to maximum aggregate
19 distributions of $500,000 for the distributions made in the 4
20 quarters beginning with the April distribution and ending
21 with the January distribution, from the Municipal Economic
22 Development Fund to each city, village, or incorporated town
23 that has within its boundaries an incinerator that: (1) uses
24 municipal waste as its primary fuel to generate electricity;
25 (2) was determined by the Illinois Commerce Commission to
26 qualify as a qualified solid waste energy facility prior to
27 the effective date of Public Act 89-448; and (3) commenced
28 operation prior to January 1, 1998. Total distributions in
29 the aggregate to all qualified cities, villages, and
30 incorporated towns in the 4 quarters beginning with the April
31 distribution and ending with the January distribution shall
32 not exceed $500,000. The amount of each distribution shall
33 be determined pro rata based on the population of the city,
34 village, or incorporated town compared to the total
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1 population of all cities, villages, and incorporated towns
2 eligible to receive a distribution. Distributions received
3 by a city, village, or incorporated town must be held in a
4 separate account and may be used only to promote and enhance
5 industrial, commercial, residential, service, transportation,
6 and recreational activities and facilities within its
7 boundaries, thereby enhancing the employment opportunities,
8 public health and general welfare, and economic development
9 within the community, including administrative expenditures
10 exclusively to further these activities. These funds,
11 however, shall not be used by the city, village, or
12 incorporated town, directly or indirectly, to purchase,
13 lease, operate, or in any way subsidize the operation of any
14 incinerator, and these funds shall not be paid, directly or
15 indirectly, by the city, village, or incorporated town to the
16 owner, operator, lessee, shareholder, or bondholder of any
17 incinerator. Moreover, these funds shall not be used to pay
18 attorneys fees in any litigation relating to the validity of
19 Public Act 89-448. Nothing in this Section prevents a city,
20 village, or incorporated town from using other corporate
21 funds for any legitimate purpose. For purposes of this
22 subsection, the term "municipal waste" has the meaning
23 ascribed to it in Section 3.21 of the Environmental
24 Protection Act.
25 (k) If maximum aggregate distributions of $500,000 under
26 subsection (j) have been made after the January distribution
27 from the Municipal Economic Development Fund, then the
28 balance in the Fund shall be refunded to the qualified solid
29 waste energy facilities that made payments that were
30 deposited into the Fund during the previous 12-month period.
31 The refunds shall be prorated based upon the facility's
32 payments in relation to total payments for that 12-month
33 period.
34 (l) Beginning January 1, 2000, and each January 1
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1 thereafter, each city, village, or incorporated town that
2 received distributions from the Municipal Economic
3 Development Fund, continued to hold any of those
4 distributions, or made expenditures from those distributions
5 during the immediately preceding year shall submit to a
6 financial and compliance and program audit of those
7 distributions performed by the Auditor General at no cost to
8 the city, village, or incorporated town that received the
9 distributions. The audit should be completed by June 30 or
10 as soon thereafter as possible. The audit shall be submitted
11 to the State Treasurer and those officers enumerated in
12 Section 3-14 of the Illinois State Auditing Act. If the
13 Auditor General finds that distributions have been expended
14 in violation of this Section, the Auditor General shall refer
15 the matter to the Attorney General. The Attorney General may
16 recover, in a civil action, 3 times the amount of any
17 distributions illegally expended. For purposes of this
18 subsection, the terms "financial audit," "compliance audit",
19 and "program audit" have the meanings ascribed to them in
20 Sections 1-13 and 1-15 of the Illinois State Auditing Act.
21 (Source: P.A. 89-448, eff. 3-14-96; 90-813, eff. 1-29-99.)
22 Section 90. The State Mandates Act is amended by adding
23 Section 8.24 as follows:
24 (30 ILCS 805/8.24 new)
25 Sec. 8.24. Exempt mandate. Notwithstanding Sections 6
26 and 8 of this Act, no reimbursement by the State is required
27 for the implementation of any mandate created by this
28 amendatory Act of the 91st General Assembly.
29 Section 99. Effective date. This Act takes effect
30 January 1, 2001.".