Bill Text: IL HB3636 | 2021-2022 | 102nd General Assembly | Introduced

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Bill Title: Amends the Use Tax Act and the Retailers' Occupation Tax Act. Provides that the term "selling price" does not include the value of or credit given for traded-in tangible personal property (currently, beginning on January 1, 2020, with respect to motor vehicles, "selling price" does include the trade-in value). Effective immediately.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2021-03-27 - Rule 19(a) / Re-referred to Rules Committee [HB3636 Detail]

Download: Illinois-2021-HB3636-Introduced.html

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102ND GENERAL ASSEMBLY State of Illinois 2021 and 2022 HB3636 Introduced , by Rep. Thomas M. Bennett SYNOPSIS AS INTRODUCED:
35 ILCS 105/2 from Ch. 120, par. 439.2
35 ILCS 120/1 from Ch. 120, par. 440
Amends the Use Tax Act and the Retailers' Occupation Tax Act. Provides that the term "selling price" does not include the value of or credit given for traded-in tangible personal property (currently, beginning on January 1, 2020, with respect to motor vehicles, "selling price" does include the trade-in value). Effective immediately.
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FISCAL NOTE ACT MAY APPLY
A BILL FOR
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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 Section 2
as follows:
(35 ILCS 105/2) (from Ch. 120, par. 439.2)
Sec. 2. Definitions.
"Use" means the exercise by any person of any right or
power over tangible personal property incident to the
ownership of that property, except that it does not include
the sale of such property in any form as tangible personal
property in the regular course of business to the extent that
such property is not first subjected to a use for which it was
purchased, and does not include the use of such property by its
owner for demonstration purposes: Provided that the property
purchased is deemed to be purchased for the purpose of resale,
despite first being used, to the extent to which it is resold
as an ingredient of an intentionally produced product or
by-product of manufacturing. "Use" does not mean the
demonstration use or interim use of tangible personal property
by a retailer before he sells that tangible personal property.
For watercraft or aircraft, if the period of demonstration use
or interim use by the retailer exceeds 18 months, the retailer

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shall pay on the retailers' original cost price the tax
imposed by this Act, and no credit for that tax is permitted if
the watercraft or aircraft is subsequently sold by the
retailer. "Use" does not mean the physical incorporation of
tangible personal property, to the extent not first subjected
to a use for which it was purchased, as an ingredient or
constituent, into other tangible personal property (a) which
is sold in the regular course of business or (b) which the
person incorporating such ingredient or constituent therein
has undertaken at the time of such purchase to cause to be
transported in interstate commerce to destinations outside the
State of Illinois: Provided that the property purchased is
deemed to be purchased for the purpose of resale, despite
first being used, to the extent to which it is resold as an
ingredient of an intentionally produced product or by-product
of manufacturing.
"Watercraft" means a Class 2, Class 3, or Class 4
watercraft as defined in Section 3-2 of the Boat Registration
and Safety Act, a personal watercraft, or any boat equipped
with an inboard motor.
"Purchase at retail" means the acquisition of the
ownership of or title to tangible personal property through a
sale at retail.
"Purchaser" means anyone who, through a sale at retail,
acquires the ownership of tangible personal property for a
valuable consideration.

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"Sale at retail" means any transfer of the ownership of or
title to tangible personal property to a purchaser, for the
purpose of use, and not for the purpose of resale in any form
as tangible personal property to the extent not first
subjected to a use for which it was purchased, for a valuable
consideration: Provided that the property purchased is deemed
to be purchased for the purpose of resale, despite first being
used, to the extent to which it is resold as an ingredient of
an intentionally produced product or by-product of
manufacturing. For this purpose, slag produced as an incident
to manufacturing pig iron or steel and sold is considered to be
an intentionally produced by-product of manufacturing. "Sale
at retail" includes any such transfer made for resale unless
made in compliance with Section 2c of the Retailers'
Occupation Tax Act, as incorporated by reference into Section
12 of this Act. Transactions whereby the possession of the
property is transferred but the seller retains the title as
security for payment of the selling price are sales.
"Sale at retail" shall also be construed to include any
Illinois florist's sales transaction in which the purchase
order is received in Illinois by a florist and the sale is for
use or consumption, but the Illinois florist has a florist in
another state deliver the property to the purchaser or the
purchaser's donee in such other state.
Nonreusable tangible personal property that is used by
persons engaged in the business of operating a restaurant,

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cafeteria, or drive-in is a sale for resale when it is
transferred to customers in the ordinary course of business as
part of the sale of food or beverages and is used to deliver,
package, or consume food or beverages, regardless of where
consumption of the food or beverages occurs. Examples of those
items include, but are not limited to nonreusable, paper and
plastic cups, plates, baskets, boxes, sleeves, buckets or
other containers, utensils, straws, placemats, napkins, doggie
bags, and wrapping or packaging materials that are transferred
to customers as part of the sale of food or beverages in the
ordinary course of business.
The purchase, employment and transfer of such tangible
personal property as newsprint and ink for the primary purpose
of conveying news (with or without other information) is not a
purchase, use or sale of tangible personal property.
"Selling price" means the consideration for a sale valued
in money whether received in money or otherwise, including
cash, credits, property other than as hereinafter provided,
and services, but, prior to January 1, 2020, not including the
value of or credit given for traded-in tangible personal
property where the item that is traded-in is of like kind and
character as that which is being sold; beginning January 1,
2020, "selling price" includes the portion of the value of or
credit given for traded-in motor vehicles of the First
Division as defined in Section 1-146 of the Illinois Vehicle
Code of like kind and character as that which is being sold

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that exceeds $10,000. "Selling price" shall be determined
without any deduction on account of the cost of the property
sold, the cost of materials used, labor or service cost or any
other expense whatsoever, but does not include interest or
finance charges which appear as separate items on the bill of
sale or sales contract nor charges that are added to prices by
sellers on account of the seller's tax liability under the
Retailers' Occupation Tax Act, or on account of the seller's
duty to collect, from the purchaser, the tax that is imposed by
this Act, or, except as otherwise provided with respect to any
cigarette tax imposed by a home rule unit, on account of the
seller's tax liability under any local occupation tax
administered by the Department, or, except as otherwise
provided with respect to any cigarette tax imposed by a home
rule unit on account of the seller's duty to collect, from the
purchasers, the tax that is imposed under any local use tax
administered by the Department. Effective December 1, 1985,
"selling price" shall include charges that are added to prices
by sellers on account of the seller's tax liability under the
Cigarette Tax Act, on account of the seller's duty to collect,
from the purchaser, the tax imposed under the Cigarette Use
Tax Act, and on account of the seller's duty to collect, from
the purchaser, any cigarette tax imposed by a home rule unit.
Notwithstanding any law to the contrary, for any motor
vehicle, as defined in Section 1-146 of the Vehicle Code, that
is sold on or after January 1, 2015 for the purpose of leasing

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the vehicle for a defined period that is longer than one year
and (1) is a motor vehicle of the second division that: (A) is
a self-contained motor vehicle designed or permanently
converted to provide living quarters for recreational,
camping, or travel use, with direct walk through access to the
living quarters from the driver's seat; (B) is of the van
configuration designed for the transportation of not less than
7 nor more than 16 passengers; or (C) has a gross vehicle
weight rating of 8,000 pounds or less or (2) is a motor vehicle
of the first division, "selling price" or "amount of sale"
means the consideration received by the lessor pursuant to the
lease contract, including amounts due at lease signing and all
monthly or other regular payments charged over the term of the
lease. Also included in the selling price is any amount
received by the lessor from the lessee for the leased vehicle
that is not calculated at the time the lease is executed,
including, but not limited to, excess mileage charges and
charges for excess wear and tear. For sales that occur in
Illinois, with respect to any amount received by the lessor
from the lessee for the leased vehicle that is not calculated
at the time the lease is executed, the lessor who purchased the
motor vehicle does not incur the tax imposed by the Use Tax Act
on those amounts, and the retailer who makes the retail sale of
the motor vehicle to the lessor is not required to collect the
tax imposed by this Act or to pay the tax imposed by the
Retailers' Occupation Tax Act on those amounts. However, the

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lessor who purchased the motor vehicle assumes the liability
for reporting and paying the tax on those amounts directly to
the Department in the same form (Illinois Retailers'
Occupation Tax, and local retailers' occupation taxes, if
applicable) in which the retailer would have reported and paid
such tax if the retailer had accounted for the tax to the
Department. For amounts received by the lessor from the lessee
that are not calculated at the time the lease is executed, the
lessor must file the return and pay the tax to the Department
by the due date otherwise required by this Act for returns
other than transaction returns. If the retailer is entitled
under this Act to a discount for collecting and remitting the
tax imposed under this Act to the Department with respect to
the sale of the motor vehicle to the lessor, then the right to
the discount provided in this Act shall be transferred to the
lessor with respect to the tax paid by the lessor for any
amount received by the lessor from the lessee for the leased
vehicle that is not calculated at the time the lease is
executed; provided that the discount is only allowed if the
return is timely filed and for amounts timely paid. The
"selling price" of a motor vehicle that is sold on or after
January 1, 2015 for the purpose of leasing for a defined period
of longer than one year shall not be reduced by the value of or
credit given for traded-in tangible personal property owned by
the lessor, nor shall it be reduced by the value of or credit
given for traded-in tangible personal property owned by the

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lessee, regardless of whether the trade-in value thereof is
assigned by the lessee to the lessor. In the case of a motor
vehicle that is sold for the purpose of leasing for a defined
period of longer than one year, the sale occurs at the time of
the delivery of the vehicle, regardless of the due date of any
lease payments. A lessor who incurs a Retailers' Occupation
Tax liability on the sale of a motor vehicle coming off lease
may not take a credit against that liability for the Use Tax
the lessor paid upon the purchase of the motor vehicle (or for
any tax the lessor paid with respect to any amount received by
the lessor from the lessee for the leased vehicle that was not
calculated at the time the lease was executed) if the selling
price of the motor vehicle at the time of purchase was
calculated using the definition of "selling price" as defined
in this paragraph. Notwithstanding any other provision of this
Act to the contrary, lessors shall file all returns and make
all payments required under this paragraph to the Department
by electronic means in the manner and form as required by the
Department. This paragraph does not apply to leases of motor
vehicles for which, at the time the lease is entered into, the
term of the lease is not a defined period, including leases
with a defined initial period with the option to continue the
lease on a month-to-month or other basis beyond the initial
defined period.
The phrase "like kind and character" shall be liberally
construed (including but not limited to any form of motor

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vehicle for any form of motor vehicle, or any kind of farm or
agricultural implement for any other kind of farm or
agricultural implement), while not including a kind of item
which, if sold at retail by that retailer, would be exempt from
retailers' occupation tax and use tax as an isolated or
occasional sale.
"Department" means the Department of Revenue.
"Person" means any natural individual, firm, partnership,
association, joint stock company, joint adventure, public or
private corporation, limited liability company, or a receiver,
executor, trustee, guardian or other representative appointed
by order of any court.
"Retailer" means and includes every person engaged in the
business of making sales at retail as defined in this Section.
A person who holds himself or herself out as being engaged
(or who habitually engages) in selling tangible personal
property at retail is a retailer hereunder with respect to
such sales (and not primarily in a service occupation)
notwithstanding the fact that such person designs and produces
such tangible personal property on special order for the
purchaser and in such a way as to render the property of value
only to such purchaser, if such tangible personal property so
produced on special order serves substantially the same
function as stock or standard items of tangible personal
property that are sold at retail.
A person whose activities are organized and conducted

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primarily as a not-for-profit service enterprise, and who
engages in selling tangible personal property at retail
(whether to the public or merely to members and their guests)
is a retailer with respect to such transactions, excepting
only a person organized and operated exclusively for
charitable, religious or educational purposes either (1), to
the extent of sales by such person to its members, students,
patients or inmates of tangible personal property to be used
primarily for the purposes of such person, or (2), to the
extent of sales by such person of tangible personal property
which is not sold or offered for sale by persons organized for
profit. The selling of school books and school supplies by
schools at retail to students is not "primarily for the
purposes of" the school which does such selling. This
paragraph does not apply to nor subject to taxation occasional
dinners, social or similar activities of a person organized
and operated exclusively for charitable, religious or
educational purposes, whether or not such activities are open
to the public.
A person who is the recipient of a grant or contract under
Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
serves meals to participants in the federal Nutrition Program
for the Elderly in return for contributions established in
amount by the individual participant pursuant to a schedule of
suggested fees as provided for in the federal Act is not a
retailer under this Act with respect to such transactions.

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Persons who engage in the business of transferring
tangible personal property upon the redemption of trading
stamps are retailers hereunder when engaged in such business.
The isolated or occasional sale of tangible personal
property at retail by a person who does not hold himself out as
being engaged (or who does not habitually engage) in selling
such tangible personal property at retail or a sale through a
bulk vending machine does not make such person a retailer
hereunder. However, any person who is engaged in a business
which is not subject to the tax imposed by the Retailers'
Occupation Tax Act because of involving the sale of or a
contract to sell real estate or a construction contract to
improve real estate, but who, in the course of conducting such
business, transfers tangible personal property to users or
consumers in the finished form in which it was purchased, and
which does not become real estate, under any provision of a
construction contract or real estate sale or real estate sales
agreement entered into with some other person arising out of
or because of such nontaxable business, is a retailer to the
extent of the value of the tangible personal property so
transferred. If, in such transaction, a separate charge is
made for the tangible personal property so transferred, the
value of such property, for the purposes of this Act, is the
amount so separately charged, but not less than the cost of
such property to the transferor; if no separate charge is
made, the value of such property, for the purposes of this Act,

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is the cost to the transferor of such tangible personal
property.
"Retailer maintaining a place of business in this State",
or any like term, means and includes any of the following
retailers:
(1) A retailer having or maintaining within this
State, directly or by a subsidiary, an office,
distribution house, sales house, 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 licensed to do business in this
State. However, the ownership of property that is located
at the premises of a printer with which the retailer has
contracted for printing and that consists of the final
printed product, property that becomes a part of the final
printed product, or copy from which the printed product is
produced shall not result in the retailer being deemed to
have or maintain an office, distribution house, sales
house, warehouse, or other place of business within this
State.
(1.1) A retailer having a contract with a person
located in this State under which the person, for a
commission or other consideration based upon the sale of

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tangible personal property by the retailer, directly or
indirectly refers potential customers to the retailer by
providing to the potential customers a promotional code or
other mechanism that allows the retailer to track
purchases referred by such persons. Examples of mechanisms
that allow the retailer to track purchases referred by
such persons include but are not limited to the use of a
link on the person's Internet website, promotional codes
distributed through the person's hand-delivered or mailed
material, and promotional codes distributed by the person
through radio or other broadcast media. The provisions of
this paragraph (1.1) shall apply only if the cumulative
gross receipts from sales of tangible personal property by
the retailer to customers who are referred to the retailer
by all persons in this State under such contracts exceed
$10,000 during the preceding 4 quarterly periods ending on
the last day of March, June, September, and December. A
retailer meeting the requirements of this paragraph (1.1)
shall be presumed to be maintaining a place of business in
this State but may rebut this presumption by submitting
proof that the referrals or other activities pursued
within this State by such persons were not sufficient to
meet the nexus standards of the United States Constitution
during the preceding 4 quarterly periods.
(1.2) Beginning July 1, 2011, a retailer having a
contract with a person located in this State under which:

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(A) the retailer sells the same or substantially
similar line of products as the person located in this
State and does so using an identical or substantially
similar name, trade name, or trademark as the person
located in this State; and
(B) the retailer provides a commission or other
consideration to the person located in this State
based upon the sale of tangible personal property by
the retailer.
The provisions of this paragraph (1.2) shall apply
only if the cumulative gross receipts from sales of
tangible personal property by the retailer to customers in
this State under all such contracts exceed $10,000 during
the preceding 4 quarterly periods ending on the last day
of March, June, September, and December.
(2) (Blank).
(3) (Blank).
(4) (Blank).
(5) (Blank).
(6) (Blank).
(7) (Blank).
(8) (Blank).
(9) Beginning October 1, 2018, a retailer making sales
of tangible personal property to purchasers in Illinois
from outside of Illinois if:
(A) the cumulative gross receipts from sales of

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tangible personal property to purchasers in Illinois
are $100,000 or more; or
(B) the retailer enters into 200 or more separate
transactions for the sale of tangible personal
property to purchasers in Illinois.
The retailer 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
subparagraph (A) or (B) of this paragraph (9) for the
preceding 12-month period. If the retailer meets the
threshold of either subparagraph (A) or (B) 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 file returns
for one year. At the end of that one-year period, the
retailer shall determine whether he or she met the
threshold of either subparagraph (A) or (B) during the
preceding 12-month period. If the retailer met the
criteria in either subparagraph (A) or (B) 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 the tax imposed under
this Act 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 threshold in

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either subparagraph (A) or (B) during the preceding
12-month period, 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
threshold of either subparagraph (A) or (B) for the
preceding 12-month period.
Beginning January 1, 2020, neither the gross receipts
from nor the number of separate transactions for sales of
tangible personal property to purchasers in Illinois that
a retailer makes through a marketplace facilitator and for
which the retailer has received a certification from the
marketplace facilitator pursuant to Section 2d of this Act
shall be included for purposes of determining whether he
or she has met the thresholds of this paragraph (9).
(10) Beginning January 1, 2020, a marketplace
facilitator that meets a threshold set forth in subsection
(b) of Section 2d of this Act.
"Bulk vending machine" means a vending machine, containing
unsorted confections, nuts, toys, or other items designed
primarily to be used or played with by children which, when a
coin or coins of a denomination not larger than $0.50 are
inserted, are dispensed in equal portions, at random and
without selection by the customer.
(Source: P.A. 100-587, eff. 6-4-18; 101-9, eff. 6-5-19;
101-31, eff. 1-1-20; 101-604, eff. 1-1-20.)

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Section 10. The Retailers' Occupation Tax Act is amended
by changing Section 1 as follows:
(35 ILCS 120/1) (from Ch. 120, par. 440)
Sec. 1. Definitions. "Sale at retail" means any transfer
of the ownership of or title to tangible personal property to a
purchaser, for the purpose of use or consumption, and not for
the purpose of resale in any form as tangible personal
property to the extent not first subjected to a use for which
it was purchased, for a valuable consideration: Provided that
the property purchased is deemed to be purchased for the
purpose of resale, despite first being used, to the extent to
which it is resold as an ingredient of an intentionally
produced product or byproduct of manufacturing. For this
purpose, slag produced as an incident to manufacturing pig
iron or steel and sold is considered to be an intentionally
produced byproduct of manufacturing. Transactions whereby the
possession of the property is transferred but the seller
retains the title as security for payment of the selling price
shall be deemed to be sales.
"Sale at retail" shall be construed to include any
transfer of the ownership of or title to tangible personal
property to a purchaser, for use or consumption by any other
person to whom such purchaser may transfer the tangible
personal property without a valuable consideration, and to
include any transfer, whether made for or without a valuable

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consideration, for resale in any form as tangible personal
property unless made in compliance with Section 2c of this
Act.
Sales of tangible personal property, which property, to
the extent not first subjected to a use for which it was
purchased, as an ingredient or constituent, goes into and
forms a part of tangible personal property subsequently the
subject of a "Sale at retail", are not sales at retail as
defined in this Act: Provided that the property purchased is
deemed to be purchased for the purpose of resale, despite
first being used, to the extent to which it is resold as an
ingredient of an intentionally produced product or byproduct
of manufacturing.
"Sale at retail" shall be construed to include any
Illinois florist's sales transaction in which the purchase
order is received in Illinois by a florist and the sale is for
use or consumption, but the Illinois florist has a florist in
another state deliver the property to the purchaser or the
purchaser's donee in such other state.
Nonreusable tangible personal property that is used by
persons engaged in the business of operating a restaurant,
cafeteria, or drive-in is a sale for resale when it is
transferred to customers in the ordinary course of business as
part of the sale of food or beverages and is used to deliver,
package, or consume food or beverages, regardless of where
consumption of the food or beverages occurs. Examples of those

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items include, but are not limited to nonreusable, paper and
plastic cups, plates, baskets, boxes, sleeves, buckets or
other containers, utensils, straws, placemats, napkins, doggie
bags, and wrapping or packaging materials that are transferred
to customers as part of the sale of food or beverages in the
ordinary course of business.
The purchase, employment and transfer of such tangible
personal property as newsprint and ink for the primary purpose
of conveying news (with or without other information) is not a
purchase, use or sale of tangible personal property.
A person whose activities are organized and conducted
primarily as a not-for-profit service enterprise, and who
engages in selling tangible personal property at retail
(whether to the public or merely to members and their guests)
is engaged in the business of selling tangible personal
property at retail with respect to such transactions,
excepting only a person organized and operated exclusively for
charitable, religious or educational purposes either (1), to
the extent of sales by such person to its members, students,
patients or inmates of tangible personal property to be used
primarily for the purposes of such person, or (2), to the
extent of sales by such person of tangible personal property
which is not sold or offered for sale by persons organized for
profit. The selling of school books and school supplies by
schools at retail to students is not "primarily for the
purposes of" the school which does such selling. The

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provisions of this paragraph shall not apply to nor subject to
taxation occasional dinners, socials or similar activities of
a person organized and operated exclusively for charitable,
religious or educational purposes, whether or not such
activities are open to the public.
A person who is the recipient of a grant or contract under
Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
serves meals to participants in the federal Nutrition Program
for the Elderly in return for contributions established in
amount by the individual participant pursuant to a schedule of
suggested fees as provided for in the federal Act is not
engaged in the business of selling tangible personal property
at retail with respect to such transactions.
"Purchaser" means anyone who, through a sale at retail,
acquires the ownership of or title to tangible personal
property for a valuable consideration.
"Reseller of motor fuel" means any person engaged in the
business of selling or delivering or transferring title of
motor fuel to another person other than for use or
consumption. No person shall act as a reseller of motor fuel
within this State without first being registered as a reseller
pursuant to Section 2c or a retailer pursuant to Section 2a.
"Selling price" or the "amount of sale" means the
consideration for a sale valued in money whether received in
money or otherwise, including cash, credits, property, other
than as hereinafter provided, and services, but, prior to

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January 1, 2020, not including the value of or credit given for
traded-in tangible personal property where the item that is
traded-in is of like kind and character as that which is being
sold; beginning January 1, 2020, "selling price" includes the
portion of the value of or credit given for traded-in motor
vehicles of the First Division as defined in Section 1-146 of
the Illinois Vehicle Code of like kind and character as that
which is being sold that exceeds $10,000. "Selling price"
shall be determined without any deduction on account of the
cost of the property sold, the cost of materials used, labor or
service cost or any other expense whatsoever, but does not
include charges that are added to prices by sellers on account
of the seller's tax liability under this Act, or on account of
the seller's duty to collect, from the purchaser, the tax that
is imposed by the Use Tax Act, or, except as otherwise provided
with respect to any cigarette tax imposed by a home rule unit,
on account of the seller's tax liability under any local
occupation tax administered by the Department, or, except as
otherwise provided with respect to any cigarette tax imposed
by a home rule unit on account of the seller's duty to collect,
from the purchasers, the tax that is imposed under any local
use tax administered by the Department. Effective December 1,
1985, "selling price" shall include charges that are added to
prices by sellers on account of the seller's tax liability
under the Cigarette Tax Act, on account of the sellers' duty to
collect, from the purchaser, the tax imposed under the

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Cigarette Use Tax Act, and on account of the seller's duty to
collect, from the purchaser, any cigarette tax imposed by a
home rule unit.
Notwithstanding any law to the contrary, for any motor
vehicle, as defined in Section 1-146 of the Vehicle Code, that
is sold on or after January 1, 2015 for the purpose of leasing
the vehicle for a defined period that is longer than one year
and (1) is a motor vehicle of the second division that: (A) is
a self-contained motor vehicle designed or permanently
converted to provide living quarters for recreational,
camping, or travel use, with direct walk through access to the
living quarters from the driver's seat; (B) is of the van
configuration designed for the transportation of not less than
7 nor more than 16 passengers; or (C) has a gross vehicle
weight rating of 8,000 pounds or less or (2) is a motor vehicle
of the first division, "selling price" or "amount of sale"
means the consideration received by the lessor pursuant to the
lease contract, including amounts due at lease signing and all
monthly or other regular payments charged over the term of the
lease. Also included in the selling price is any amount
received by the lessor from the lessee for the leased vehicle
that is not calculated at the time the lease is executed,
including, but not limited to, excess mileage charges and
charges for excess wear and tear. For sales that occur in
Illinois, with respect to any amount received by the lessor
from the lessee for the leased vehicle that is not calculated

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at the time the lease is executed, the lessor who purchased the
motor vehicle does not incur the tax imposed by the Use Tax Act
on those amounts, and the retailer who makes the retail sale of
the motor vehicle to the lessor is not required to collect the
tax imposed by the Use Tax Act or to pay the tax imposed by
this Act on those amounts. However, the lessor who purchased
the motor vehicle assumes the liability for reporting and
paying the tax on those amounts directly to the Department in
the same form (Illinois Retailers' Occupation Tax, and local
retailers' occupation taxes, if applicable) in which the
retailer would have reported and paid such tax if the retailer
had accounted for the tax to the Department. For amounts
received by the lessor from the lessee that are not calculated
at the time the lease is executed, the lessor must file the
return and pay the tax to the Department by the due date
otherwise required by this Act for returns other than
transaction returns. If the retailer is entitled under this
Act to a discount for collecting and remitting the tax imposed
under this Act to the Department with respect to the sale of
the motor vehicle to the lessor, then the right to the discount
provided in this Act shall be transferred to the lessor with
respect to the tax paid by the lessor for any amount received
by the lessor from the lessee for the leased vehicle that is
not calculated at the time the lease is executed; provided
that the discount is only allowed if the return is timely filed
and for amounts timely paid. The "selling price" of a motor

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vehicle that is sold on or after January 1, 2015 for the
purpose of leasing for a defined period of longer than one year
shall not be reduced by the value of or credit given for
traded-in tangible personal property owned by the lessor, nor
shall it be reduced by the value of or credit given for
traded-in tangible personal property owned by the lessee,
regardless of whether the trade-in value thereof is assigned
by the lessee to the lessor. In the case of a motor vehicle
that is sold for the purpose of leasing for a defined period of
longer than one year, the sale occurs at the time of the
delivery of the vehicle, regardless of the due date of any
lease payments. A lessor who incurs a Retailers' Occupation
Tax liability on the sale of a motor vehicle coming off lease
may not take a credit against that liability for the Use Tax
the lessor paid upon the purchase of the motor vehicle (or for
any tax the lessor paid with respect to any amount received by
the lessor from the lessee for the leased vehicle that was not
calculated at the time the lease was executed) if the selling
price of the motor vehicle at the time of purchase was
calculated using the definition of "selling price" as defined
in this paragraph. Notwithstanding any other provision of this
Act to the contrary, lessors shall file all returns and make
all payments required under this paragraph to the Department
by electronic means in the manner and form as required by the
Department. This paragraph does not apply to leases of motor
vehicles for which, at the time the lease is entered into, the

HB3636 - 25 - LRB102 10996 HLH 16328 b
term of the lease is not a defined period, including leases
with a defined initial period with the option to continue the
lease on a month-to-month or other basis beyond the initial
defined period.
The phrase "like kind and character" shall be liberally
construed (including but not limited to any form of motor
vehicle for any form of motor vehicle, or any kind of farm or
agricultural implement for any other kind of farm or
agricultural implement), while not including a kind of item
which, if sold at retail by that retailer, would be exempt from
retailers' occupation tax and use tax as an isolated or
occasional sale.
"Gross receipts" from the sales of tangible personal
property at retail means the total selling price or the amount
of such sales, as hereinbefore defined. In the case of charge
and time sales, the amount thereof shall be included only as
and when payments are received by the seller. Receipts or
other consideration derived by a seller from the sale,
transfer or assignment of accounts receivable to a wholly
owned subsidiary will not be deemed payments prior to the time
the purchaser makes payment on such accounts.
"Department" means the Department of Revenue.
"Person" means any natural individual, firm, partnership,
association, joint stock company, joint adventure, public or
private corporation, limited liability company, or a receiver,
executor, trustee, guardian or other representative appointed

HB3636 - 26 - LRB102 10996 HLH 16328 b
by order of any court.
The isolated or occasional sale of tangible personal
property at retail by a person who does not hold himself out as
being engaged (or who does not habitually engage) in selling
such tangible personal property at retail, or a sale through a
bulk vending machine, does not constitute engaging in a
business of selling such tangible personal property at retail
within the meaning of this Act; provided that any person who is
engaged in a business which is not subject to the tax imposed
by this Act because of involving the sale of or a contract to
sell real estate or a construction contract to improve real
estate or a construction contract to engineer, install, and
maintain an integrated system of products, but who, in the
course of conducting such business, transfers tangible
personal property to users or consumers in the finished form
in which it was purchased, and which does not become real
estate or was not engineered and installed, under any
provision of a construction contract or real estate sale or
real estate sales agreement entered into with some other
person arising out of or because of such nontaxable business,
is engaged in the business of selling tangible personal
property at retail to the extent of the value of the tangible
personal property so transferred. If, in such a transaction, a
separate charge is made for the tangible personal property so
transferred, the value of such property, for the purpose of
this Act, shall be the amount so separately charged, but not

HB3636 - 27 - LRB102 10996 HLH 16328 b
less than the cost of such property to the transferor; if no
separate charge is made, the value of such property, for the
purposes of this Act, is the cost to the transferor of such
tangible personal property. Construction contracts for the
improvement of real estate consisting of engineering,
installation, and maintenance of voice, data, video, security,
and all telecommunication systems do not constitute engaging
in a business of selling tangible personal property at retail
within the meaning of this Act if they are sold at one
specified contract price.
A person who holds himself or herself out as being engaged
(or who habitually engages) in selling tangible personal
property at retail is a person engaged in the business of
selling tangible personal property at retail hereunder with
respect to such sales (and not primarily in a service
occupation) notwithstanding the fact that such person designs
and produces such tangible personal property on special order
for the purchaser and in such a way as to render the property
of value only to such purchaser, if such tangible personal
property so produced on special order serves substantially the
same function as stock or standard items of tangible personal
property that are sold at retail.
Persons who engage in the business of transferring
tangible personal property upon the redemption of trading
stamps are engaged in the business of selling such property at
retail and shall be liable for and shall pay the tax imposed by

HB3636 - 28 - LRB102 10996 HLH 16328 b
this Act on the basis of the retail value of the property
transferred upon redemption of such stamps.
"Bulk vending machine" means a vending machine, containing
unsorted confections, nuts, toys, or other items designed
primarily to be used or played with by children which, when a
coin or coins of a denomination not larger than $0.50 are
inserted, are dispensed in equal portions, at random and
without selection by the customer.
"Remote retailer" means a retailer that does not maintain
within this State, directly or by a subsidiary, an office,
distribution house, sales house, 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 is located here permanently or temporarily or whether
such retailer or subsidiary is licensed to do business in this
State.
"Marketplace" means a physical or electronic place, forum,
platform, application, or other method by which a marketplace
seller sells or offers to sell items.
"Marketplace facilitator" means a person who, pursuant to
an agreement with an unrelated third-party marketplace seller,
directly or indirectly through one or more affiliates
facilitates a retail sale by an unrelated third party
marketplace seller by:
(1) listing or advertising for sale by the marketplace

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seller in a marketplace, tangible personal property that
is subject to tax under this Act; and
(2) either directly or indirectly, through agreements
or arrangements with third parties, collecting payment
from the customer and transmitting that payment to the
marketplace seller regardless of whether the marketplace
facilitator receives compensation or other consideration
in exchange for its services.
A person who provides advertising services, including
listing products for sale, is not considered a marketplace
facilitator, so long as the advertising service platform or
forum does not engage, directly or indirectly through one or
more affiliated persons, in the activities described in
paragraph (2) of this definition of "marketplace facilitator".
"Marketplace seller" means a person that makes sales
through a marketplace operated by an unrelated third party
marketplace facilitator.
(Source: P.A. 101-31, eff. 6-28-19; 101-604, eff. 1-1-20.)
Section 99. Effective date. This Act takes effect upon
becoming law.