Bill Text: IL HB3480 | 2025-2026 | 104th General Assembly | Introduced

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Bill Title: Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, the Retailers' Occupation Tax Act, and the Telecommunications Excise Tax Act. Provides that prepaid telephone calling arrangements shall be subject to the tax imposed under those Acts only if the telephone or telecommunications services and the recharge of such services are obtained through the purchase of a preloaded phone, calling card, or other item of tangible personal property. Provides that, on and after January 1, 2026, "prepaid telephone calling arrangements" do not include a recharge that is not obtained through the purchase of a preloaded phone, calling card, or other item of tangible personal property. Provides that "prepaid telephone calling arrangements" include the recharge of a prepaid calling arrangement if and only if, on and after January 1, 2026, the additional telephone or telecommunications services included in the recharge are obtained through the purchase of a preloaded phone, calling card, or other item of tangible personal property.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2025-02-07 - Filed with the Clerk by Rep. Will Guzzardi [HB3480 Detail]

Download: Illinois-2025-HB3480-Introduced.html

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104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB3480 Introduced , by Rep. Will Guzzardi SYNOPSIS AS INTRODUCED:
35 ILCS 105/3 from Ch. 120, par. 439.3
35 ILCS 105/3-27
35 ILCS 110/3 from Ch. 120, par. 439.33
35 ILCS 110/3-27
35 ILCS 115/3 from Ch. 120, par. 439.103
35 ILCS 115/3-27
35 ILCS 120/2
35 ILCS 120/2-27
35 ILCS 630/2 from Ch. 120, par. 2002
Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, the Retailers' Occupation Tax Act, and the Telecommunications Excise Tax Act. Provides that prepaid telephone calling arrangements shall be subject to the tax imposed under those Acts only if the telephone or telecommunications services and the recharge of such services are obtained through the purchase of a preloaded phone, calling card, or other item of tangible personal property. Provides that, on and after January 1, 2026, "prepaid telephone calling arrangements" do not include a recharge that is not obtained through the purchase of a preloaded phone, calling card, or other item of tangible personal property. Provides that "prepaid telephone calling arrangements" include the recharge of a prepaid calling arrangement if and only if, on and after January 1, 2026, the additional telephone or telecommunications services included in the recharge are obtained through the purchase of a preloaded phone, calling card, or other item of tangible personal property.
LRB104 11072 HLH 21154 b
A BILL FOR
HB3480 LRB104 11072 HLH 21154 b
AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Use Tax Act is amended by changing Sections
3 and 3-27 as follows:
(35 ILCS 105/3) (from Ch. 120, par. 439.3)
Sec. 3. Tax imposed. A tax is imposed upon the privilege of
using in this State tangible personal property purchased,
which, on and after January 1, 2025, includes leased, at
retail from a retailer, including computer software, and
including photographs, negatives, and positives that are the
product of photoprocessing, but not including products of
photoprocessing produced for use in motion pictures for
commercial exhibition. Beginning January 1, 2001 and through
December 31, 2025, prepaid telephone calling arrangements
shall be considered tangible personal property subject to the
tax imposed under this Act regardless of the form in which
those arrangements may be embodied, transmitted, or fixed by
any method now known or hereafter developed. On and after
January 1, 2026, prepaid telephone calling arrangements shall
be subject to the tax imposed under this Act only if the
telephone or telecommunications services and the recharge of
such services are obtained through the purchase of a preloaded

HB3480 - 2 - LRB104 11072 HLH 21154 b
phone, calling card, or other item of tangible personal
property. Purchases of (1) electricity delivered to customers
by wire; (2) natural or artificial gas that is delivered to
customers through pipes, pipelines, or mains; and (3) water
that is delivered to customers through pipes, pipelines, or
mains are not subject to tax under this Act. The provisions of
Public Act 98-583 this amendatory Act of the 98th General
Assembly are declaratory of existing law as to the meaning and
scope of this Act.
The imposition of the tax under this Act on the privilege
of using tangible personal property leased at retail applies
to leases of tangible personal property in effect, entered
into, or renewed on or after January 1, 2025. In the case of
leases, except as otherwise provided in this Act, the lessor,
in collecting the tax, may collect for each tax return period,
only the tax applicable to that part of the selling price
actually received during such tax return period.
The inclusion of leases in the tax imposed under this Act
by this amendatory Act of the 103rd General Assembly does not,
however, extend to motor vehicles, watercraft, aircraft, and
semitrailers, as defined in Section 1-187 of the Illinois
Vehicle Code, that are required to be registered with an
agency of this State. The taxation of these items shall
continue in effect as prior to the effective date of the
changes made to this Section by this amendatory Act of the
103rd General Assembly (i.e. dealers owe retailers' occupation

HB3480 - 3 - LRB104 11072 HLH 21154 b
tax, lessors owe use tax, and lessees are not subject to
retailers' occupation or use tax).
(Source: P.A. 103-592, eff. 1-1-25.)
(35 ILCS 105/3-27)
Sec. 3-27. Prepaid telephone calling arrangements.
"Prepaid telephone calling arrangements" mean the right to
exclusively purchase telephone or telecommunications services
that must be paid for in advance and enable the origination of
one or more intrastate, interstate, or international telephone
calls or other telecommunications using an access number, an
authorization code, or both, whether manually or
electronically dialed, for which payment to a retailer must be
made in advance, provided that, unless recharged, no further
service is provided once that prepaid amount of service has
been consumed, and provided further that, on and after
December 31, 2025, the telephone or telecommunications
services included in such arrangement are obtained through the
purchase of a preloaded phone, calling card, or other item of
tangible personal property. Prepaid telephone calling
arrangements include the recharge of a prepaid calling
arrangement if and only if, on and after January 1, 2026, the
telephone or telecommunications services included in such
arrangement are obtained through the purchase of a preloaded
phone, calling card, or other item of tangible personal
property. For purposes of this Section, "recharge" means the

HB3480 - 4 - LRB104 11072 HLH 21154 b
purchase of additional prepaid telephone or telecommunications
services whether or not the purchaser acquires a different
access number or authorization code. For purposes of this
Section, "telecommunications" means that term as defined in
Section 2 of the Telecommunications Excise Tax Act. "Prepaid
telephone calling arrangement" does not include an arrangement
whereby the service provider reflects the amount of a purchase
as a credit on an account for a customer under an existing
subscription plan, nor, on and after January 1, 2026, does it
include a recharge that is not obtained through the purchase
of a preloaded phone, calling card, or other item of tangible
personal property.
(Source: P.A. 91-870, eff. 6-22-00.)
Section 10. The Service Use Tax Act is amended by changing
Sections 3 and 3-27 as follows:
(35 ILCS 110/3) (from Ch. 120, par. 439.33)
Sec. 3. Tax imposed. A tax is imposed upon the privilege of
using in this State real or tangible personal property
acquired, which, on and after January 1, 2025, includes
tangible personal property acquired through a lease, as an
incident to the purchase of a service from a serviceman,
including computer software, and including photographs,
negatives, and positives that are the product of
photoprocessing, but not including products of photoprocessing

HB3480 - 5 - LRB104 11072 HLH 21154 b
produced for use in motion pictures for public commercial
exhibition. Beginning January 1, 2001 and through December 31,
2025, prepaid telephone calling arrangements shall be
considered tangible personal property subject to the tax
imposed under this Act regardless of the form in which those
arrangements may be embodied, transmitted, or fixed by any
method now known or hereafter developed. On and after January
1, 2026, prepaid telephone calling arrangements shall be
subject to the tax imposed under this Act only if the telephone
or telecommunications services and the recharge of such
services are obtained through the purchase of a preloaded
phone, calling card, or other item of tangible personal
property. Purchases of (1) electricity delivered to customers
by wire; (2) natural or artificial gas that is delivered to
customers through pipes, pipelines, or mains; and (3) water
that is delivered to customers through pipes, pipelines, or
mains are not subject to tax under this Act. The provisions of
Public Act 98-583 this amendatory Act of the 98th General
Assembly are declaratory of existing law as to the meaning and
scope of this Act.
The imposition of the tax under this Act on leases applies
to leases of tangible personal property in effect, entered
into, or renewed on or after January 1, 2025. In the case of
leases, except as otherwise provided in this Act, the
serviceman who is a lessor, in collecting the tax, may collect
for each tax return period only the tax applicable to that part

HB3480 - 6 - LRB104 11072 HLH 21154 b
of the selling price actually received during such tax return
period.
(Source: P.A. 103-592, eff. 1-1-25.)
(35 ILCS 110/3-27)
Sec. 3-27. Prepaid telephone calling arrangements.
"Prepaid telephone calling arrangements" mean the right to
exclusively purchase telephone or telecommunications services
that must be paid for in advance and enable the origination of
one or more intrastate, interstate, or international telephone
calls or other telecommunications using an access number, an
authorization code, or both, whether manually or
electronically dialed, for which payment to a retailer must be
made in advance, provided that, unless recharged, no further
service is provided once that prepaid amount of service has
been consumed, nor, on and after January 1, 2026, does it
include a recharge that is not obtained through the purchase
of a preloaded phone, calling card, or other item of tangible
personal property. Prepaid telephone calling arrangements
include the recharge of a prepaid calling arrangement if and
only if, on and after January 1, 2026, the additional
telephone or telecommunications services included in the
recharge are obtained through the purchase of a preloaded
phone, calling card, or other item of tangible personal
property. For purposes of this Section, "recharge" means the
purchase of additional prepaid telephone or telecommunications

HB3480 - 7 - LRB104 11072 HLH 21154 b
services whether or not the purchaser acquires a different
access number or authorization code. For purposes of this
Section, "telecommunications" means that term as defined in
Section 2 of the Telecommunications Excise Tax Act. "Prepaid
telephone calling arrangement" does not include an arrangement
whereby the service provider reflects the amount of the
purchase as a credit on an account for a customer under an
existing subscription plan, nor, on and after January 1, 2026,
does it include a recharge that is not obtained through the
purchase of a preloaded phone, calling card, or other item of
tangible personal property.
(Source: P.A. 91-870, eff. 6-22-00.)
Section 15. The Service Occupation Tax Act is amended by
changing Sections 3 and 3-27 as follows:
(35 ILCS 115/3) (from Ch. 120, par. 439.103)
Sec. 3. Tax imposed. A tax is imposed upon all persons
engaged in the business of making sales of service (referred
to as "servicemen") on all tangible personal property
transferred, including, on and after January 1, 2025,
transferred by lease, as an incident of a sale of service,
including computer software, and including photographs,
negatives, and positives that are the product of
photoprocessing, but not including products of photoprocessing
produced for use in motion pictures for public commercial

HB3480 - 8 - LRB104 11072 HLH 21154 b
exhibition. Beginning January 1, 2001 and through December 31,
2025, prepaid telephone calling arrangements shall be
considered tangible personal property subject to the tax
imposed under this Act regardless of the form in which those
arrangements may be embodied, transmitted, or fixed by any
method now known or hereafter developed. On and after January
1, 2026, prepaid telephone calling arrangements shall be
subject to the tax imposed under this Act only if the telephone
or telecommunications services and the recharge of such
services are obtained through the purchase of a preloaded
phone, calling card, or other item of tangible personal
property. Sales of (1) electricity delivered to customers by
wire; (2) natural or artificial gas that is delivered to
customers through pipes, pipelines, or mains; and (3) water
that is delivered to customers through pipes, pipelines, or
mains are not subject to tax under this Act. The provisions of
Public Act 98-583 this amendatory Act of the 98th General
Assembly are declaratory of existing law as to the meaning and
scope of this Act.
The imposition of the tax under this Act on tangible
personal property transferred by lease by persons engaged in
the business of making sales of service applies to leases in
effect, entered into, or renewed on or after January 1, 2025.
In the case of leases, except as otherwise provided in this
Act, the serviceman who is a lessor must remit for each tax
return period only the tax applicable to that part of the

HB3480 - 9 - LRB104 11072 HLH 21154 b
selling price actually received during such tax return period.
(Source: P.A. 103-592, eff. 1-1-25.)
(35 ILCS 115/3-27)
Sec. 3-27. Prepaid telephone calling arrangements.
"Prepaid telephone calling arrangements" mean the right to
exclusively purchase telephone or telecommunications services
that must be paid for in advance and enable the origination of
one or more intrastate, interstate, or international telephone
calls or other telecommunications using an access number, an
authorization code, or both, whether manually or
electronically dialed, for which payment to a retailer must be
made in advance, provided that, unless recharged, no further
service is provided once that prepaid amount of service has
been consumed, nor, on and after January 1, 2026, does it
include a recharge that is not obtained through the purchase
of a preloaded phone, calling card, or other item of tangible
personal property. Prepaid telephone calling arrangements
include the recharge of a prepaid calling arrangement if and
only if, on and after January 1, 2026, the additional
telephone or telecommunications services included in the
recharge are obtained through the purchase of a preloaded
phone, calling card, or other item of tangible personal
property. For purposes of this Section, "recharge" means the
purchase of additional prepaid telephone or telecommunications
services whether or not the purchaser acquires a different

HB3480 - 10 - LRB104 11072 HLH 21154 b
access number or authorization code. For purposes of this
Section, "telecommunications" means that term as defined in
Section 2 of the Telecommunications Excise Tax Act. "Prepaid
telephone calling arrangement" does not include an arrangement
whereby the service provider reflects the amount of the
purchase as a credit on an account for a customer under an
existing subscription plan, nor, on and after January 1, 2026,
does it include a recharge that is not obtained through the
purchase of a preloaded phone, calling card, or other item of
tangible personal property.
(Source: P.A. 91-870, eff. 6-22-00.)
Section 20. The Retailers' Occupation Tax Act is amended
by changing Sections 2 and 2-27 as follows:
(35 ILCS 120/2)
Sec. 2. Tax imposed.
(a) A tax is imposed upon persons engaged in the business
of selling at retail, which, on and after January 1, 2025,
includes leasing, tangible personal property, including
computer software, and including photographs, negatives, and
positives that are the product of photoprocessing, but not
including products of photoprocessing produced for use in
motion pictures for public commercial exhibition. Beginning
January 1, 2001 and through December 31, 2025, prepaid
telephone calling arrangements shall be considered tangible

HB3480 - 11 - LRB104 11072 HLH 21154 b
personal property subject to the tax imposed under this Act
regardless of the form in which those arrangements may be
embodied, transmitted, or fixed by any method now known or
hereafter developed. On and after January 1, 2026, prepaid
telephone calling arrangements shall be subject to the tax
imposed under this Act only if the telephone or
telecommunications services and the recharge of such services
are obtained through the purchase of a preloaded phone,
calling card, or other item of tangible personal property.
The imposition of the tax under this Act on persons
engaged in the business of leasing tangible personal property
applies to leases in effect, entered into, or renewed on or
after January 1, 2025. In the case of leases, except as
otherwise provided in this Act, the lessor must remit, for
each tax return period, only the tax applicable to that part of
the selling price actually received during such tax return
period.
The inclusion of leases in the tax imposed under this Act
by Public Act 103-592 this amendatory Act of the 103rd General
Assembly does not, however, extend to motor vehicles,
watercraft, aircraft, and semitrailers, as defined in Section
1-187 of the Illinois Vehicle Code, that are required to be
registered with an agency of this State. The taxation of these
items shall continue in effect as prior to the effective date
of the changes made to this Section by Public Act 103-592 this
amendatory Act of the 103rd General Assembly (i.e., dealers

HB3480 - 12 - LRB104 11072 HLH 21154 b
owe retailers' occupation tax, lessors owe use tax, and
lessees are not subject to retailers' occupation or use tax).
Sales of (1) electricity delivered to customers by wire;
(2) natural or artificial gas that is delivered to customers
through pipes, pipelines, or mains; and (3) water that is
delivered to customers through pipes, pipelines, or mains are
not subject to tax under this Act. The provisions of Public Act
98-583 this amendatory Act of the 98th General Assembly are
declaratory of existing law as to the meaning and scope of this
Act.
(b) Beginning on January 1, 2021, a remote retailer is
engaged in the occupation of selling at retail in Illinois for
purposes of this Act, if:
(1) the cumulative gross receipts from sales of
tangible personal property to purchasers in Illinois are
$100,000 or more; or
(2) the retailer enters into 200 or more separate
transactions for the sale of tangible personal property to
purchasers in Illinois.
Remote retailers that meet or exceed the threshold in
either paragraph (1) or (2) above shall be liable for all
applicable State retailers' and locally imposed retailers'
occupation taxes administered by the Department on all retail
sales to Illinois purchasers.
The remote retailer shall determine on a quarterly basis,
ending on the last day of March, June, September, and

HB3480 - 13 - LRB104 11072 HLH 21154 b
December, whether he or she meets the criteria of either
paragraph (1) or (2) of this subsection for the preceding
12-month period. If the retailer meets the criteria of either
paragraph (1) or (2) for a 12-month period, he or she is
considered a retailer maintaining a place of business in this
State and is required to collect and remit the tax imposed
under this Act and all retailers' occupation tax imposed by
local taxing jurisdictions in Illinois, provided such local
taxes are administered by the Department, and to file all
applicable returns for one year. At the end of that one-year
period, the retailer shall determine whether the retailer met
the criteria of either paragraph (1) or (2) for the preceding
12-month period. If the retailer met the criteria in either
paragraph (1) or (2) for the preceding 12-month period, he or
she is considered a retailer maintaining a place of business
in this State and is required to collect and remit all
applicable State and local retailers' occupation taxes and
file returns for the subsequent year. If, at the end of a
one-year period, a retailer that was required to collect and
remit the tax imposed under this Act determines that he or she
did not meet the criteria in either paragraph (1) or (2) during
the preceding 12-month period, then the retailer shall
subsequently determine on a quarterly basis, ending on the
last day of March, June, September, and December, whether he
or she meets the criteria of either paragraph (1) or (2) for
the preceding 12-month period.

HB3480 - 14 - LRB104 11072 HLH 21154 b
(b-2) Beginning on January 1, 2025, a retailer maintaining
a place of business in this State that makes retail sales of
tangible personal property to Illinois customers from a
location or locations outside of Illinois is engaged in the
occupation of selling at retail in Illinois for the purposes
of this Act. Those retailers are liable for all applicable
State and locally imposed retailers' occupation taxes
administered by the Department on retail sales made by those
retailers to Illinois customers from locations outside of
Illinois.
(b-5) For the purposes of this Section, neither the gross
receipts from nor the number of separate transactions for
sales of tangible personal property to purchasers in Illinois
that a remote retailer makes through a marketplace facilitator
shall be included for the purposes of determining whether he
or she has met the thresholds of subsection (b) of this Section
so long as the remote retailer has received certification from
the marketplace facilitator that the marketplace facilitator
is legally responsible for payment of tax on such sales.
(b-10) A remote retailer that is required to collect taxes
imposed under the Use Tax Act on retail sales made to Illinois
purchasers or a retailer maintaining a place of business in
this State that is required to collect taxes imposed under the
Use Tax Act on retail sales made to Illinois purchasers shall
be liable to the Department for such taxes, except when the
remote retailer or retailer maintaining a place of business in

HB3480 - 15 - LRB104 11072 HLH 21154 b
this State is relieved of the duty to remit such taxes by
virtue of having paid to the Department taxes imposed by this
Act in accordance with this Section upon his or her gross
receipts from such sales.
(c) Marketplace facilitators engaged in the business of
selling at retail tangible personal property in Illinois.
Beginning January 1, 2021, a marketplace facilitator is
engaged in the occupation of selling at retail tangible
personal property in Illinois for purposes of this Act if,
during the previous 12-month period:
(1) the cumulative gross receipts from sales of
tangible personal property on its own behalf or on behalf
of marketplace sellers to purchasers in Illinois equals
$100,000 or more; or
(2) the marketplace facilitator enters into 200 or
more separate transactions on its own behalf or on behalf
of marketplace sellers for the sale of tangible personal
property to purchasers in Illinois, regardless of whether
the marketplace facilitator or marketplace sellers for
whom such sales are facilitated are registered as
retailers in this State.
A marketplace facilitator who meets either paragraph (1)
or (2) of this subsection is required to remit the applicable
State retailers' occupation taxes under this Act and local
retailers' occupation taxes administered by the Department on
all taxable sales of tangible personal property made by the

HB3480 - 16 - LRB104 11072 HLH 21154 b
marketplace facilitator or facilitated for marketplace sellers
to customers in this State. A marketplace facilitator selling
or facilitating the sale of tangible personal property to
customers in this State is subject to all applicable
procedures and requirements of this Act.
The marketplace facilitator shall determine on a quarterly
basis, ending on the last day of March, June, September, and
December, whether he or she meets the criteria of either
paragraph (1) or (2) of this subsection for the preceding
12-month period. If the marketplace facilitator meets the
criteria of either paragraph (1) or (2) for a 12-month period,
he or she is considered a retailer maintaining a place of
business in this State and is required to remit the tax imposed
under this Act and all retailers' occupation tax imposed by
local taxing jurisdictions in Illinois, provided such local
taxes are administered by the Department, and to file all
applicable returns for one year. At the end of that one-year
period, the marketplace facilitator shall determine whether it
met the criteria of either paragraph (1) or (2) for the
preceding 12-month period. If the marketplace facilitator met
the criteria in either paragraph (1) or (2) for the preceding
12-month period, it is considered a retailer maintaining a
place of business in this State and is required to collect and
remit all applicable State and local retailers' occupation
taxes and file returns for the subsequent year. If at the end
of a one-year period a marketplace facilitator that was

HB3480 - 17 - LRB104 11072 HLH 21154 b
required to collect and remit the tax imposed under this Act
determines that he or she did not meet the criteria in either
paragraph (1) or (2) during the preceding 12-month period, the
marketplace facilitator shall subsequently determine on a
quarterly basis, ending on the last day of March, June,
September, and December, whether he or she meets the criteria
of either paragraph (1) or (2) for the preceding 12-month
period.
A marketplace facilitator shall be entitled to any
credits, deductions, or adjustments to the sales price
otherwise provided to the marketplace seller, in addition to
any such adjustments provided directly to the marketplace
facilitator. This Section pertains to, but is not limited to,
adjustments such as discounts, coupons, and rebates. In
addition, a marketplace facilitator shall be entitled to the
retailers' discount provided in Section 3 of the Retailers'
Occupation Tax Act on all marketplace sales, and the
marketplace seller shall not include sales made through a
marketplace facilitator when computing any retailers' discount
on remaining sales. Marketplace facilitators shall report and
remit the applicable State and local retailers' occupation
taxes on sales facilitated for marketplace sellers separately
from any sales or use tax collected on taxable retail sales
made directly by the marketplace facilitator or its
affiliates.
The marketplace facilitator is liable for the remittance

HB3480 - 18 - LRB104 11072 HLH 21154 b
of all applicable State retailers' occupation taxes under this
Act and local retailers' occupation taxes administered by the
Department on sales through the marketplace and is subject to
audit on all such sales. The Department shall not audit
marketplace sellers for their marketplace sales where a
marketplace facilitator remitted the applicable State and
local retailers' occupation taxes unless the marketplace
facilitator seeks relief as a result of incorrect information
provided to the marketplace facilitator by a marketplace
seller as set forth in this Section. The marketplace
facilitator shall not be held liable for tax on any sales made
by a marketplace seller that take place outside of the
marketplace and which are not a part of any agreement between a
marketplace facilitator and a marketplace seller. In addition,
marketplace facilitators shall not be held liable to State and
local governments of Illinois for having charged and remitted
an incorrect amount of State and local retailers' occupation
tax if, at the time of the sale, the tax is computed based on
erroneous data provided by the State in database files on tax
rates, boundaries, or taxing jurisdictions or incorrect
information provided to the marketplace facilitator by the
marketplace seller.
(d) A marketplace facilitator shall:
(1) certify to each marketplace seller that the
marketplace facilitator assumes the rights and duties of a
retailer under this Act with respect to sales made by the

HB3480 - 19 - LRB104 11072 HLH 21154 b
marketplace seller through the marketplace; and
(2) remit taxes imposed by this Act as required by
this Act for sales made through the marketplace.
(e) A marketplace seller shall retain books and records
for all sales made through a marketplace in accordance with
the requirements of this Act.
(f) A marketplace facilitator is subject to audit on all
marketplace sales for which it is considered to be the
retailer, but shall not be liable for tax or subject to audit
on sales made by marketplace sellers outside of the
marketplace.
(g) A marketplace facilitator required to collect taxes
imposed under the Use Tax Act on marketplace sales made to
Illinois purchasers shall be liable to the Department for such
taxes, except when the marketplace facilitator is relieved of
the duty to remit such taxes by virtue of having paid to the
Department taxes imposed by this Act in accordance with this
Section upon his or her gross receipts from such sales.
(h) Nothing in this Section shall allow the Department to
collect retailers' occupation taxes from both the marketplace
facilitator and marketplace seller on the same transaction.
(i) If, for any reason, the Department is prohibited from
enforcing the marketplace facilitator's duty under this Act to
remit taxes pursuant to this Section, the duty to remit such
taxes remains with the marketplace seller.
(j) Nothing in this Section affects the obligation of any

HB3480 - 20 - LRB104 11072 HLH 21154 b
consumer to remit use tax for any taxable transaction for
which a certified service provider acting on behalf of a
remote retailer or a marketplace facilitator does not collect
and remit the appropriate tax.
(k) Nothing in this Section shall allow the Department to
collect the retailers' occupation tax from both the
marketplace facilitator and the marketplace seller.
(Source: P.A. 103-592, eff. 1-1-25; 103-983, eff. 1-1-25;
revised 11-26-24.)
(35 ILCS 120/2-27)
Sec. 2-27. Prepaid telephone calling arrangements.
"Prepaid telephone calling arrangements" mean the right to
exclusively purchase telephone or telecommunications services
that must be paid for in advance and enable the origination of
one or more intrastate, interstate, or international telephone
calls or other telecommunications using an access number, an
authorization code, or both, whether manually or
electronically dialed, for which payment to a retailer must be
made in advance, provided that, unless recharged, no further
service is provided once that prepaid amount of service has
been consumed, and provided further that, on and after January
1, 2026, the telephone or telecommunications services included
in such arrangement are obtained through the purchase of a
preloaded phone, calling card, or other item of tangible
personal property. Prepaid telephone calling arrangements

HB3480 - 21 - LRB104 11072 HLH 21154 b
include the recharge of a prepaid calling arrangement if and
only if, on and after January 1, 2026, the additional
telephone or telecommunications services included in the
recharge are obtained through the purchase of a preloaded
phone, calling card, or other item of tangible personal
property. For purposes of this Section, "recharge" means the
purchase of additional prepaid telephone or telecommunications
services whether or not the purchaser acquires a different
access number or authorization code. For purposes of this
Section, "telecommunications" means that term as defined in
Section 2 of the Telecommunications Excise Tax Act. "Prepaid
telephone calling arrangement" does not include an arrangement
whereby the service provider reflects the amount of the
purchase as a credit on an account for a customer under an
existing subscription plan, nor, on and after January 1, 2026,
does it include a recharge that is not obtained through the
purchase of a preloaded phone, calling card, or other item of
tangible personal property.
(Source: P.A. 103-781, eff. 8-5-24; 103-1055, eff. 12-20-24.)
Section 25. The Telecommunications Excise Tax Act is
amended by changing Section 2 as follows:
(35 ILCS 630/2) (from Ch. 120, par. 2002)
Sec. 2. As used in this Article, unless the context
clearly requires otherwise:

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(a) "Gross charge" means the amount paid for the act or
privilege of originating or receiving telecommunications in
this State and for all services and equipment provided in
connection therewith by a retailer, valued in money whether
paid in money or otherwise, including cash, credits, services,
and property of every kind or nature, and shall be determined
without any deduction on account of the cost of such
telecommunications, the cost of materials used, labor or
service costs, or any other expense whatsoever. In case credit
is extended, the amount thereof shall be included only as and
when paid. "Gross charges" for private line service shall
include charges imposed at each channel termination point
within this State, charges for the channel mileage between
each channel termination point within this State, and charges
for that portion of the interstate inter-office channel
provided within Illinois. Charges for that portion of the
interstate inter-office channel provided in Illinois shall be
determined by the retailer as follows: (i) for interstate
inter-office channels having 2 channel termination points,
only one of which is in Illinois, 50% of the total charge
imposed; or (ii) for interstate inter-office channels having
more than 2 channel termination points, one or more of which
are in Illinois, an amount equal to the total charge
multiplied by a fraction, the numerator of which is the number
of channel termination points within Illinois and the
denominator of which is the total number of channel

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termination points. Prior to January 1, 2004, any method
consistent with this paragraph or other method that reasonably
apportions the total charges for interstate inter-office
channels among the states in which channel terminations points
are located shall be accepted as a reasonable method to
determine the charges for that portion of the interstate
inter-office channel provided within Illinois for that period.
However, "gross charges" shall not include any of the
following:
(1) Any amounts added to a purchaser's bill because of
a charge made pursuant to (i) the tax imposed by this
Article; (ii) charges added to customers' bills pursuant
to the provisions of Section Sections 9-221 or 9-222 of
the Public Utilities Act, as amended, or any similar
charges added to customers' bills by retailers who are not
subject to rate regulation by the Illinois Commerce
Commission for the purpose of recovering any of the tax
liabilities or other amounts specified in such provisions
of such Act; (iii) the tax imposed by Section 4251 of the
Internal Revenue Code; (iv) 911 surcharges; or (v) the tax
imposed by the Simplified Municipal Telecommunications Tax
Act.
(2) Charges for a sent collect telecommunication
received outside of the State.
(3) Charges for leased time on equipment or charges
for the storage of data or information for subsequent

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retrieval or the processing of data or information
intended to change its form or content. Such equipment
includes, but is not limited to, the use of calculators,
computers, data processing equipment, tabulating
equipment, or accounting equipment and also includes the
usage of computers under a time-sharing agreement.
(4) Charges for customer equipment, including such
equipment that is leased or rented by the customer from
any source, wherein such charges are disaggregated and
separately identified from other charges.
(5) Charges to business enterprises certified under
Section 9-222.1 of the Public Utilities Act, as amended,
or under Section 95 of the Reimagining Energy and Vehicles
in Illinois Act, to the extent of such exemption and
during the period of time specified by the Department of
Commerce and Economic Opportunity.
(5.1) Charges to business enterprises certified under
the Manufacturing Illinois Chips for Real Opportunity
(MICRO) Act, to the extent of the exemption and during the
period of time specified by the Department of Commerce and
Economic Opportunity.
(5.2) Charges to entities certified under Section
605-1115 of the Department of Commerce and Economic
Opportunity Law of the Civil Administrative Code of
Illinois to the extent of the exemption and during the
period of time specified by the Department of Commerce and

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Economic Opportunity.
(6) Charges for telecommunications and all services
and equipment provided in connection therewith between a
parent corporation and its wholly owned subsidiaries or
between wholly owned subsidiaries when the tax imposed
under this Article has already been paid to a retailer and
only to the extent that the charges between the parent
corporation and wholly owned subsidiaries or between
wholly owned subsidiaries represent expense allocation
between the corporations and not the generation of profit
for the corporation rendering such service.
(7) Bad debts. Bad debt means any portion of a debt
that is related to a sale at retail for which gross charges
are not otherwise deductible or excludable that has become
worthless or uncollectable, as determined under applicable
federal income tax standards. If the portion of the debt
deemed to be bad is subsequently paid, the retailer shall
report and pay the tax on that portion during the
reporting period in which the payment is made.
(8) Charges paid by inserting coins in coin-operated
telecommunication devices.
(9) Amounts paid by telecommunications retailers under
the Telecommunications Municipal Infrastructure
Maintenance Fee Act.
(10) Charges for nontaxable services or
telecommunications if (i) those charges are aggregated

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with other charges for telecommunications that are
taxable, (ii) those charges are not separately stated on
the customer bill or invoice, and (iii) the retailer can
reasonably identify the nontaxable charges on the
retailer's books and records kept in the regular course of
business. If the nontaxable charges cannot reasonably be
identified, the gross charge from the sale of both taxable
and nontaxable services or telecommunications billed on a
combined basis shall be attributed to the taxable services
or telecommunications. The burden of proving nontaxable
charges shall be on the retailer of the
telecommunications.
(b) "Amount paid" means the amount charged to the
taxpayer's service address in this State regardless of where
such amount is billed or paid.
(c) "Telecommunications", in addition to the meaning
ordinarily and popularly ascribed to it, includes, without
limitation, messages or information transmitted through use of
local, toll, and wide area telephone service; private line
services; channel services; telegraph services;
teletypewriter; computer exchange services; cellular mobile
telecommunications service; specialized mobile radio;
stationary 2-way two way radio; paging service; or any other
form of mobile and portable one-way or 2-way two-way
communications; or any other transmission of messages or
information by electronic or similar means, between or among

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points by wire, cable, fiber optics fiber-optics, laser,
microwave, radio, satellite, or similar facilities. As used in
this Act, "private line" means a dedicated non-traffic
sensitive service for a single customer, that entitles the
customer to exclusive or priority use of a communications
channel or group of channels, from one or more specified
locations to one or more other specified locations. The
definition of "telecommunications" shall not include value
added services in which computer processing applications are
used to act on the form, content, code, and protocol of the
information for purposes other than transmission.
"Telecommunications" shall not include purchases of
telecommunications by a telecommunications service provider
for use as a component part of the service provided by him to
the ultimate retail consumer who originates or terminates the
taxable end-to-end communications. Carrier access charges,
right of access charges, charges for use of inter-company
facilities, and all telecommunications resold in the
subsequent provision of, used as a component of, or integrated
into end-to-end telecommunications service shall be
non-taxable as sales for resale.
(d) "Interstate telecommunications" means all
telecommunications that either originate or terminate outside
this State.
(e) "Intrastate telecommunications" means all
telecommunications that originate and terminate within this

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State.
(f) "Department" means the Department of Revenue of the
State of Illinois.
(g) "Director" means the Director of Revenue for the
Department of Revenue of the State of Illinois.
(h) "Taxpayer" means a person who individually or through
his agents, employees, or permittees engages in the act or
privilege of originating or receiving telecommunications in
this State and who incurs a tax liability under this Article.
(i) "Person" means any natural individual, firm, trust,
estate, partnership, association, joint stock company, joint
venture, corporation, limited liability company, or a
receiver, trustee, guardian or other representative appointed
by order of any court, the federal Federal and State
governments, including State universities created by statute
or any city, town, county, or other political subdivision of
this State.
(j) "Purchase at retail" means the acquisition,
consumption, or use of telecommunication through a sale at
retail.
(k) "Sale at retail" means the transmitting, supplying, or
furnishing of telecommunications and all services and
equipment provided in connection therewith for a consideration
to persons other than the federal Federal and State
governments, and State universities created by statute and
other than between a parent corporation and its wholly owned

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subsidiaries or between wholly owned subsidiaries for their
use or consumption and not for resale.
(l) "Retailer" means and includes every person engaged in
the business of making sales at retail as defined in this
Article. The Department may, in its discretion, upon
application, authorize the collection of the tax hereby
imposed by any retailer not maintaining a place of business
within this State, who, to the satisfaction of the Department,
furnishes adequate security to insure collection and payment
of the tax. Such retailer shall be issued, without charge, a
permit to collect such tax. When so authorized, it shall be the
duty of such retailer to collect the tax upon all of the gross
charges for telecommunications in this State in the same
manner and subject to the same requirements as a retailer
maintaining a place of business within this State. The permit
may be revoked by the Department at its discretion.
(m) "Retailer maintaining a place of business in this
State", or any like term, means and includes any retailer
having or maintaining within this State, directly or by a
subsidiary, an office, distribution facilities, transmission
facilities, sales office, warehouse or other place of
business, or any agent or other representative operating
within this State under the authority of the retailer or its
subsidiary, irrespective of whether such place of business or
agent or other representative is located here permanently or
temporarily, or whether such retailer or subsidiary is

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licensed to do business in this State.
(n) "Service address" means the location of
telecommunications equipment from which the telecommunications
services are originated or at which telecommunications
services are received by a taxpayer. In the event this may not
be a defined location, as in the case of mobile phones, paging
systems, maritime systems, "service address" means the
customer's place of primary use as defined in the Mobile
Telecommunications Sourcing Conformity Act. For air-to-ground
systems and the like, "service address" shall mean the
location of a taxpayer's primary use of the telecommunications
equipment as defined by telephone number, authorization code,
or location in Illinois where bills are sent.
(o) "Prepaid telephone calling arrangements" mean the
right to exclusively purchase telephone or telecommunications
services that must be paid for in advance and enable the
origination of one or more intrastate, interstate, or
international telephone calls or other telecommunications
using an access number, an authorization code, or both,
whether manually or electronically dialed, for which payment
to a retailer must be made in advance, provided that, unless
recharged, no further service is provided once that prepaid
amount of service has been consumed, and provided further
that, on and after January 1, 2026, the telephone or
telecommunications services included in such arrangement are
obtained through the purchase of a preloaded phone, calling

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card, or other item of tangible personal property. Prepaid
telephone calling arrangements include the recharge of a
prepaid calling arrangement if and only if, on and after
January 1, 2026, the additional telephone or
telecommunications services included in the recharge are
obtained through the purchase of a preloaded phone, calling
card, or other item of tangible personal property. For
purposes of this subsection, "recharge" means the purchase of
additional prepaid telephone or telecommunications services
whether or not the purchaser acquires a different access
number or authorization code. "Prepaid telephone calling
arrangement" does not include an arrangement whereby a
customer purchases a payment card and pursuant to which the
service provider reflects the amount of such purchase as a
credit on an invoice issued to that customer under an existing
subscription plan, nor, on and after January 1, 2026, does it
include a recharge that is not obtained through the purchase
of a preloaded phone, calling card, or other item of tangible
personal property.
(Source: P.A. 102-669, eff. 11-16-21; 102-700, eff. 4-19-22;
102-1125, eff. 2-3-23; 103-595, eff. 6-26-24; revised
10-21-24.)