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| | 101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB3891 Introduced , by Rep. Ryan Spain SYNOPSIS AS INTRODUCED:
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| 35 ILCS 105/2 | from Ch. 120, par. 439.2 | 35 ILCS 120/1 | from Ch. 120, par. 440 |
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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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| 1 | | AN ACT concerning revenue.
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| 2 | | Be it enacted by the People of the State of Illinois,
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| 3 | | represented in the General Assembly:
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| 4 | | Section 5. The Use Tax Act is amended by changing Section 2 |
| 5 | | as follows:
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| 6 | | (35 ILCS 105/2) (from Ch. 120, par. 439.2)
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| 7 | | Sec. 2. Definitions. |
| 8 | | "Use" means the exercise by any person of any right or |
| 9 | | power over
tangible personal property incident to the ownership |
| 10 | | of that property,
except that it does not include the sale of |
| 11 | | such property in any form as
tangible personal property in the |
| 12 | | regular course of business to the extent
that such property is |
| 13 | | not first subjected to a use for which it was
purchased, and |
| 14 | | does not include the use of such property by its owner for
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| 15 | | demonstration purposes: Provided that the property purchased |
| 16 | | is deemed to
be purchased for the purpose of resale, despite |
| 17 | | first being used, to the
extent to which it is resold as an |
| 18 | | ingredient of an intentionally produced
product or by-product |
| 19 | | of manufacturing. "Use" does not mean the demonstration
use or |
| 20 | | interim use of tangible personal property by a retailer before |
| 21 | | he sells
that tangible personal property. For watercraft or |
| 22 | | aircraft, if the period of
demonstration use or interim use by |
| 23 | | the retailer exceeds 18 months,
the retailer
shall pay on the |
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| 1 | | retailers' original cost price the tax imposed by this Act,
and |
| 2 | | no credit for that tax is permitted if the watercraft or |
| 3 | | aircraft is
subsequently sold by the retailer. "Use" does not |
| 4 | | mean the physical
incorporation of tangible personal property, |
| 5 | | to the extent not first subjected
to a use for which it was |
| 6 | | purchased, as an ingredient or constituent, into
other tangible |
| 7 | | personal property (a) which is sold in the regular course of
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| 8 | | business or (b) which the person incorporating such ingredient |
| 9 | | or constituent
therein has undertaken at the time of such |
| 10 | | purchase to cause to be transported
in interstate commerce to |
| 11 | | destinations outside the State of Illinois: Provided
that the |
| 12 | | property purchased is deemed to be purchased for the purpose of
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| 13 | | resale, despite first being used, to the extent to which it is |
| 14 | | resold as an
ingredient of an intentionally produced product or |
| 15 | | by-product of manufacturing.
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| 16 | | "Watercraft" means a Class 2, Class 3, or Class 4 |
| 17 | | watercraft as defined in
Section 3-2 of the Boat Registration |
| 18 | | and Safety Act, a personal watercraft, or
any boat equipped |
| 19 | | with an inboard motor.
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| 20 | | "Purchase at retail" means the acquisition of the ownership |
| 21 | | of or title
to tangible personal property through a sale at |
| 22 | | retail.
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| 23 | | "Purchaser" means anyone who, through a sale at retail, |
| 24 | | acquires the
ownership of tangible personal property for a |
| 25 | | valuable consideration.
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| 26 | | "Sale at retail" means any transfer of the ownership of or |
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| 1 | | title to
tangible personal property to a purchaser, for the |
| 2 | | purpose of use, and not
for the purpose of resale in any form |
| 3 | | as tangible personal property to the
extent not first subjected |
| 4 | | to a use for which it was purchased, for a
valuable |
| 5 | | consideration: Provided that the property purchased is deemed |
| 6 | | to
be purchased for the purpose of resale, despite first being |
| 7 | | used, to the
extent to which it is resold as an ingredient of |
| 8 | | an intentionally produced
product or by-product of |
| 9 | | manufacturing. For this purpose, slag produced as
an incident |
| 10 | | to manufacturing pig iron or steel and sold is considered to be
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| 11 | | an intentionally produced by-product of manufacturing. "Sale |
| 12 | | at retail"
includes any such transfer made for resale unless |
| 13 | | made in compliance with
Section 2c of the Retailers' Occupation |
| 14 | | Tax Act, as incorporated by
reference into Section 12 of this |
| 15 | | Act. Transactions whereby the possession
of the property is |
| 16 | | transferred but the seller retains the title as security
for |
| 17 | | payment of the selling price are sales.
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| 18 | | "Sale at retail" shall also be construed to include any |
| 19 | | Illinois
florist's sales transaction in which the purchase |
| 20 | | order is received in
Illinois by a florist and the sale is for |
| 21 | | use or consumption, but the
Illinois florist has a florist in |
| 22 | | another state deliver the property to the
purchaser or the |
| 23 | | purchaser's donee in such other state.
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| 24 | | Nonreusable tangible personal property that is used by |
| 25 | | persons engaged in
the business of operating a restaurant, |
| 26 | | cafeteria, or drive-in is a sale for
resale when it is |
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| 1 | | transferred to customers in the ordinary course of business
as |
| 2 | | part of the sale of food or beverages and is used to deliver, |
| 3 | | package, or
consume food or beverages, regardless of where |
| 4 | | consumption of the food or
beverages occurs. Examples of those |
| 5 | | items include, but are not limited to
nonreusable, paper and |
| 6 | | plastic cups, plates, baskets, boxes, sleeves, buckets
or other |
| 7 | | containers, utensils, straws, placemats, napkins, doggie bags, |
| 8 | | and
wrapping or packaging
materials that are transferred to |
| 9 | | customers as part of the sale of food or
beverages in the |
| 10 | | ordinary course of business.
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| 11 | | The purchase, employment and transfer of such tangible |
| 12 | | personal property
as newsprint and ink for the primary purpose |
| 13 | | of conveying news (with or
without other information) is not a |
| 14 | | purchase, use or sale of tangible
personal property.
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| 15 | | "Selling price" means the consideration for a sale valued |
| 16 | | in money
whether received in money or otherwise, including |
| 17 | | cash, credits, property
other than as hereinafter provided, and |
| 18 | | services, but, prior to January 1, 2020, not including the
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| 19 | | value of or credit given for traded-in tangible personal |
| 20 | | property where the
item that is traded-in is of like kind and |
| 21 | | character as that which is being
sold; beginning January 1, |
| 22 | | 2020, "selling price" includes the portion of the value of or |
| 23 | | credit given for traded-in motor vehicles of the First Division |
| 24 | | as defined in Section 1-146 of the Illinois Vehicle Code of |
| 25 | | like kind and character as that which is being sold that |
| 26 | | exceeds $10,000. "Selling price" shall be determined without |
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| 1 | | any deduction on account of the cost
of the property sold, the |
| 2 | | cost of materials used, labor or service cost or
any other |
| 3 | | expense whatsoever, but does not include interest or finance
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| 4 | | charges which appear as separate items on the bill of sale or |
| 5 | | sales
contract nor charges that are added to prices by sellers |
| 6 | | on account of the
seller's tax liability under the "Retailers' |
| 7 | | Occupation Tax Act", or on
account of the seller's duty to |
| 8 | | collect, from the purchaser, the tax that
is imposed by this |
| 9 | | Act, or, except as otherwise provided with respect to any |
| 10 | | cigarette tax imposed by a home rule unit, on account of the |
| 11 | | seller's tax liability under any local occupation tax |
| 12 | | administered by the Department, or, except as otherwise |
| 13 | | provided with respect to any cigarette tax imposed by a home |
| 14 | | rule unit on account of the seller's duty to collect, from the |
| 15 | | purchasers, the tax that is imposed under any local use tax |
| 16 | | administered by the Department. Effective December 1, 1985, |
| 17 | | "selling price"
shall include charges that are added to prices |
| 18 | | by sellers on account of the
seller's tax liability under the |
| 19 | | Cigarette Tax Act, on account of the seller's
duty to collect, |
| 20 | | from the purchaser, the tax imposed under the Cigarette Use
Tax |
| 21 | | Act, and on account of the seller's duty to collect, from the |
| 22 | | purchaser,
any cigarette tax imposed by a home rule unit.
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| 23 | | Notwithstanding any law to the contrary, for any motor |
| 24 | | vehicle, as defined in Section 1-146 of the Vehicle Code, that |
| 25 | | is sold on or after January 1, 2015 for the purpose of leasing |
| 26 | | the vehicle for a defined period that is longer than one year |
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| 1 | | and (1) is a motor vehicle of the second division that: (A) is |
| 2 | | a self-contained motor vehicle designed or permanently |
| 3 | | converted to provide living quarters for recreational, |
| 4 | | camping, or travel use, with direct walk through access to the |
| 5 | | living quarters from the driver's seat; (B) is of the van |
| 6 | | configuration designed for the transportation of not less than |
| 7 | | 7 nor more than 16 passengers; or (C) has a gross vehicle |
| 8 | | weight rating of 8,000 pounds or less or (2) is a motor vehicle |
| 9 | | of the first division, "selling price" or "amount of sale" |
| 10 | | means the consideration received by the lessor pursuant to the |
| 11 | | lease contract, including amounts due at lease signing and all |
| 12 | | monthly or other regular payments charged over the term of the |
| 13 | | lease. Also included in the selling price is any amount |
| 14 | | received by the lessor from the lessee for the leased vehicle |
| 15 | | that is not calculated at the time the lease is executed, |
| 16 | | including, but not limited to, excess mileage charges and |
| 17 | | charges for excess wear and tear. For sales that occur in |
| 18 | | Illinois, with respect to any amount received by the lessor |
| 19 | | from the lessee for the leased vehicle that is not calculated |
| 20 | | at the time the lease is executed, the lessor who purchased the |
| 21 | | motor vehicle does not incur the tax imposed by the Use Tax Act |
| 22 | | on those amounts, and the retailer who makes the retail sale of |
| 23 | | the motor vehicle to the lessor is not required to collect the |
| 24 | | tax imposed by this Act or to pay the tax imposed by the |
| 25 | | Retailers' Occupation Tax Act on those amounts. However, the |
| 26 | | lessor who purchased the motor vehicle assumes the liability |
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| 1 | | for reporting and paying the tax on those amounts directly to |
| 2 | | the Department in the same form (Illinois Retailers' Occupation |
| 3 | | Tax, and local retailers' occupation taxes, if applicable) in |
| 4 | | which the retailer would have reported and paid such tax if the |
| 5 | | retailer had accounted for the tax to the Department. For |
| 6 | | amounts received by the lessor from the lessee that are not |
| 7 | | calculated at the time the lease is executed, the lessor must |
| 8 | | file the return and pay the tax to the Department by the due |
| 9 | | date otherwise required by this Act for returns other than |
| 10 | | transaction returns. If the retailer is entitled under this Act |
| 11 | | to a discount for collecting and remitting the tax imposed |
| 12 | | under this Act to the Department with respect to the sale of |
| 13 | | the motor vehicle to the lessor, then the right to the discount |
| 14 | | provided in this Act shall be transferred to the lessor with |
| 15 | | respect to the tax paid by the lessor for any amount received |
| 16 | | by the lessor from the lessee for the leased vehicle that is |
| 17 | | not calculated at the time the lease is executed; provided that |
| 18 | | the discount is only allowed if the return is timely filed and |
| 19 | | for amounts timely paid. The "selling price" of a motor vehicle |
| 20 | | that is sold on or after January 1, 2015 for the purpose of |
| 21 | | leasing for a defined period of longer than one year shall not |
| 22 | | be reduced by the value of or credit given for traded-in |
| 23 | | tangible personal property owned by the lessor, nor shall it be |
| 24 | | reduced by the value of or credit given for traded-in tangible |
| 25 | | personal property owned by the lessee, regardless of whether |
| 26 | | the trade-in value thereof is assigned by the lessee to the |
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| 1 | | lessor. In the case of a motor vehicle that is sold for the |
| 2 | | purpose of leasing for a defined period of longer than one |
| 3 | | year, the sale occurs at the time of the delivery of the |
| 4 | | vehicle, regardless of the due date of any lease payments. A |
| 5 | | lessor who incurs a Retailers' Occupation Tax liability on the |
| 6 | | sale of a motor vehicle coming off lease may not take a credit |
| 7 | | against that liability for the Use Tax the lessor paid upon the |
| 8 | | purchase of the motor vehicle (or for any tax the lessor paid |
| 9 | | with respect to any amount received by the lessor from the |
| 10 | | lessee for the leased vehicle that was not calculated at the |
| 11 | | time the lease was executed) if the selling price of the motor |
| 12 | | vehicle at the time of purchase was calculated using the |
| 13 | | definition of "selling price" as defined in this paragraph. |
| 14 | | Notwithstanding any other provision of this Act to the |
| 15 | | contrary, lessors shall file all returns and make all payments |
| 16 | | required under this paragraph to the Department by electronic |
| 17 | | means in the manner and form as required by the Department. |
| 18 | | This paragraph does not apply to leases of motor vehicles for |
| 19 | | which, at the time the lease is entered into, the term of the |
| 20 | | lease is not a defined period, including leases with a defined |
| 21 | | initial period with the option to continue the lease on a |
| 22 | | month-to-month or other basis beyond the initial defined |
| 23 | | period. |
| 24 | | The phrase "like kind and character" shall be liberally |
| 25 | | construed
(including but not limited to any form of motor |
| 26 | | vehicle for any form of
motor vehicle, or any kind of farm or |
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| 1 | | agricultural implement for any other
kind of farm or |
| 2 | | agricultural implement), while not including a kind of item
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| 3 | | which, if sold at retail by that retailer, would be exempt from |
| 4 | | retailers'
occupation tax and use tax as an isolated or |
| 5 | | occasional sale.
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| 6 | | "Department" means the Department of Revenue.
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| 7 | | "Person" means any natural individual, firm, partnership, |
| 8 | | association,
joint stock company, joint adventure, public or |
| 9 | | private corporation, limited
liability company, or a
receiver, |
| 10 | | executor, trustee, guardian or other representative appointed
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| 11 | | by order of any court.
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| 12 | | "Retailer" means and includes every person engaged in the |
| 13 | | business of
making sales at retail as defined in this Section.
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| 14 | | A person who holds himself or herself out as being engaged |
| 15 | | (or who habitually
engages) in selling tangible personal |
| 16 | | property at retail is a retailer
hereunder with respect to such |
| 17 | | sales (and not primarily in a service
occupation) |
| 18 | | notwithstanding the fact that such person designs and produces
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| 19 | | such tangible personal property on special order for the |
| 20 | | purchaser and in
such a way as to render the property of value |
| 21 | | only to such purchaser, if
such tangible personal property so |
| 22 | | produced on special order serves
substantially the same |
| 23 | | function as stock or standard items of tangible
personal |
| 24 | | property that are sold at retail.
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| 25 | | A person whose activities are organized and conducted |
| 26 | | primarily as a
not-for-profit service enterprise, and who |
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| 1 | | engages in selling tangible
personal property at retail |
| 2 | | (whether to the public or merely to members and
their guests) |
| 3 | | is a retailer with respect to such transactions, excepting
only |
| 4 | | a person organized and operated exclusively for charitable, |
| 5 | | religious
or educational purposes either (1), to the extent of |
| 6 | | sales by such person
to its members, students, patients or |
| 7 | | inmates of tangible personal property
to be used primarily for |
| 8 | | the purposes of such person, or (2), to the extent
of sales by |
| 9 | | such person of tangible personal property which is not sold or
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| 10 | | offered for sale by persons organized for profit. The selling |
| 11 | | of school
books and school supplies by schools at retail to |
| 12 | | students is not
"primarily for the purposes of" the school |
| 13 | | which does such selling. This
paragraph does not apply to nor |
| 14 | | subject to taxation occasional dinners,
social or similar |
| 15 | | activities of a person organized and operated exclusively
for |
| 16 | | charitable, religious or educational purposes, whether or not |
| 17 | | such
activities are open to the public.
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| 18 | | A person who is the recipient of a grant or contract under |
| 19 | | Title VII of
the Older Americans Act of 1965 (P.L. 92-258) and |
| 20 | | serves meals to
participants in the federal Nutrition Program |
| 21 | | for the Elderly in return for
contributions established in |
| 22 | | amount by the individual participant pursuant
to a schedule of |
| 23 | | suggested fees as provided for in the federal Act is not a
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| 24 | | retailer under this Act with respect to such transactions.
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| 25 | | Persons who engage in the business of transferring tangible |
| 26 | | personal
property upon the redemption of trading stamps are |
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| 1 | | retailers hereunder when
engaged in such business.
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| 2 | | The isolated or occasional sale of tangible personal |
| 3 | | property at retail
by a person who does not hold himself out as |
| 4 | | being engaged (or who does not
habitually engage) in selling |
| 5 | | such tangible personal property at retail or
a sale through a |
| 6 | | bulk vending machine does not make such person a retailer
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| 7 | | hereunder. However, any person who is engaged in a business |
| 8 | | which is not
subject to the tax imposed by the "Retailers' |
| 9 | | Occupation Tax Act" because
of involving the sale of or a |
| 10 | | contract to sell real estate or a
construction contract to |
| 11 | | improve real estate, but who, in the course of
conducting such |
| 12 | | business, transfers tangible personal property to users or
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| 13 | | consumers in the finished form in which it was purchased, and |
| 14 | | which does
not become real estate, under any provision of a |
| 15 | | construction contract or
real estate sale or real estate sales |
| 16 | | agreement entered into with some
other person arising out of or |
| 17 | | because of such nontaxable business, is a
retailer to the |
| 18 | | extent of the value of the tangible personal property so
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| 19 | | transferred. If, in such transaction, a separate charge is made |
| 20 | | for the
tangible personal property so transferred, the value of |
| 21 | | such property, for
the purposes of this Act, is the amount so |
| 22 | | separately charged, but not less
than the cost of such property |
| 23 | | to the transferor; if no separate charge is
made, the value of |
| 24 | | such property, for the purposes of this Act, is the cost
to the |
| 25 | | transferor of such tangible personal property.
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| 26 | | "Retailer maintaining a place of business in this State", |
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| 1 | | or any like
term, means and includes any of the following |
| 2 | | retailers:
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| 3 | | (1) A retailer having or maintaining within this State, |
| 4 | | directly or by
a subsidiary, an office, distribution house, |
| 5 | | sales house, warehouse or other
place of business, or any |
| 6 | | agent or other representative operating within this
State |
| 7 | | under the authority of the retailer or its subsidiary, |
| 8 | | irrespective of
whether such place of business or agent or |
| 9 | | other representative is located here
permanently or |
| 10 | | temporarily, or whether such retailer or subsidiary is |
| 11 | | licensed
to do business in this State. However, the |
| 12 | | ownership of property that is
located at the premises of a |
| 13 | | printer with which the retailer has contracted for
printing |
| 14 | | and that consists of the final printed product, property |
| 15 | | that becomes
a part of the final printed product, or copy |
| 16 | | from which the printed product is
produced shall not result |
| 17 | | in the retailer being deemed to have or maintain an
office, |
| 18 | | distribution house, sales house, warehouse, or other place |
| 19 | | of business
within this State. |
| 20 | | (1.1) (Blank). |
| 21 | | (1.2) (Blank).
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| 22 | | (2) (Blank).
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| 23 | | (3) (Blank).
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| 24 | | (4) (Blank).
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| 25 | | (5) (Blank).
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| 26 | | (6) (Blank).
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| 1 | | (7) (Blank).
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| 2 | | (8) (Blank).
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| 3 | | (9) Beginning October 1, 2018 through June 30, 2020, a |
| 4 | | retailer making sales of tangible personal property to |
| 5 | | purchasers in Illinois from outside of Illinois if: |
| 6 | | (A) the cumulative gross receipts from sales of |
| 7 | | tangible personal property to purchasers in Illinois |
| 8 | | are $100,000 or more; or |
| 9 | | (B) the retailer enters into 200 or more separate |
| 10 | | transactions for the sale of tangible personal |
| 11 | | property to purchasers in Illinois. |
| 12 | | The retailer shall determine on a quarterly basis, |
| 13 | | ending on the last day of March, June, September, and |
| 14 | | December, whether he or she meets the criteria of either |
| 15 | | subparagraph (A) or (B) of this paragraph (9) for the |
| 16 | | preceding 12-month period. If the retailer meets the |
| 17 | | criteria of either subparagraph (A) or (B) for a 12-month |
| 18 | | period, he or she is considered a retailer maintaining a |
| 19 | | place of business in this State and is required to collect |
| 20 | | and remit the tax imposed under this Act and file returns |
| 21 | | for one year. At the end of that one-year period, the |
| 22 | | retailer shall determine whether the retailer met the |
| 23 | | criteria of either subparagraph (A) or (B) during the |
| 24 | | preceding 12-month period. If the retailer met the criteria |
| 25 | | in either subparagraph (A) or (B) for the preceding |
| 26 | | 12-month period, he or she is considered a retailer |
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| 1 | | maintaining a place of business in this State and is |
| 2 | | required to collect and remit the tax imposed under this |
| 3 | | Act and file returns for the subsequent year. If at the end |
| 4 | | of a one-year period a retailer that was required to |
| 5 | | collect and remit the tax imposed under this Act determines |
| 6 | | that he or she did not meet the criteria in either |
| 7 | | subparagraph (A) or (B) during the preceding 12-month |
| 8 | | period, the retailer shall subsequently determine on a |
| 9 | | quarterly basis, ending on the last day of March, June, |
| 10 | | September, and December, whether he or she meets the |
| 11 | | criteria of either subparagraph (A) or (B) for the |
| 12 | | preceding 12-month period. |
| 13 | | Beginning January 1, 2020, neither the gross receipts |
| 14 | | from nor the number of separate transactions for sales of |
| 15 | | tangible personal property to purchasers in Illinois that a |
| 16 | | retailer makes through a marketplace facilitator and for |
| 17 | | which the retailer has received a certification from the |
| 18 | | marketplace facilitator pursuant to Section 2d of this Act |
| 19 | | shall be included for purposes of determining whether he or |
| 20 | | she has met the thresholds of this paragraph (9). |
| 21 | | (10) Beginning January 1, 2020, a marketplace |
| 22 | | facilitator, as defined in Section 2d of this Act. |
| 23 | | "Bulk vending machine" means a vending machine,
containing |
| 24 | | unsorted confections, nuts, toys, or other items designed
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| 25 | | primarily to be used or played with by children
which, when a |
| 26 | | coin or coins of a denomination not larger than $0.50 are |
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| 1 | | inserted, are dispensed in equal portions, at random and
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| 2 | | without selection by the customer.
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| 3 | | (Source: P.A. 100-587, eff. 6-4-18; 101-9, eff. 6-5-19; 101-31, |
| 4 | | eff. 1-1-20; revised 7-11-19.)
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| 5 | | Section 10. The Retailers' Occupation Tax Act is amended by |
| 6 | | changing Section 1 as follows:
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| 7 | | (35 ILCS 120/1) (from Ch. 120, par. 440)
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| 8 | | Sec. 1. Definitions. "Sale at retail" means any transfer of |
| 9 | | the
ownership of or title to
tangible personal property to a |
| 10 | | purchaser, for the purpose of use or
consumption, and not for |
| 11 | | the purpose of resale in any form as tangible
personal property |
| 12 | | to the extent not first subjected to a use for which it
was |
| 13 | | purchased, for a valuable consideration: Provided that the |
| 14 | | property
purchased is deemed to be purchased for the purpose of |
| 15 | | resale, despite
first being used, to the extent to which it is |
| 16 | | resold as an ingredient of
an intentionally produced product or |
| 17 | | byproduct of manufacturing. For this
purpose, slag produced as |
| 18 | | an incident to manufacturing pig iron or steel
and sold is |
| 19 | | considered to be an intentionally produced byproduct of
|
| 20 | | manufacturing. Transactions whereby the possession of the |
| 21 | | property is
transferred but the seller retains the title as |
| 22 | | security for payment of the
selling price shall be deemed to be |
| 23 | | sales.
|
| 24 | | "Sale at retail" shall be construed to include any transfer |
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| 1 | | of the
ownership of or title to tangible personal property to a |
| 2 | | purchaser, for use
or consumption by any other person to whom |
| 3 | | such purchaser may transfer the
tangible personal property |
| 4 | | without a valuable consideration, and to include
any transfer, |
| 5 | | whether made for or without a valuable consideration, for
|
| 6 | | resale in any form as tangible personal property unless made in |
| 7 | | compliance
with Section 2c of this Act.
|
| 8 | | Sales of tangible personal property, which property, to the |
| 9 | | extent not
first subjected to a use for which it was purchased, |
| 10 | | as an ingredient or
constituent, goes into and forms a part of |
| 11 | | tangible personal property
subsequently the subject of a "Sale |
| 12 | | at retail", are not sales at retail as
defined in this Act: |
| 13 | | Provided that the property purchased is deemed to be
purchased |
| 14 | | for the purpose of resale, despite first being used, to the
|
| 15 | | extent to which it is resold as an ingredient of an |
| 16 | | intentionally produced
product or byproduct of manufacturing.
|
| 17 | | "Sale at retail" shall be construed to include any Illinois |
| 18 | | florist's
sales transaction in which the purchase order is |
| 19 | | received in Illinois by a
florist and the sale is for use or |
| 20 | | consumption, but the Illinois florist
has a florist in another |
| 21 | | state deliver the property to the purchaser or the
purchaser's |
| 22 | | donee in such other state.
|
| 23 | | Nonreusable tangible personal property that is used by |
| 24 | | persons engaged in
the business of operating a restaurant, |
| 25 | | cafeteria, or drive-in is a sale for
resale when it is |
| 26 | | transferred to customers in the ordinary course of business
as |
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| 1 | | part of the sale of food or beverages and is used to deliver, |
| 2 | | package, or
consume food or beverages, regardless of where |
| 3 | | consumption of the food or
beverages occurs. Examples of those |
| 4 | | items include, but are not limited to
nonreusable, paper and |
| 5 | | plastic cups, plates, baskets, boxes, sleeves, buckets
or other |
| 6 | | containers, utensils, straws, placemats, napkins, doggie bags, |
| 7 | | and
wrapping or packaging
materials that are transferred to |
| 8 | | customers as part of the sale of food or
beverages in the |
| 9 | | ordinary course of business.
|
| 10 | | The purchase, employment and transfer of such tangible |
| 11 | | personal property
as newsprint and ink for the primary purpose |
| 12 | | of conveying news (with or
without other information) is not a |
| 13 | | purchase, use or sale of tangible
personal property.
|
| 14 | | A person whose activities are organized and conducted |
| 15 | | primarily as a
not-for-profit service enterprise, and who |
| 16 | | engages in selling tangible
personal property at retail |
| 17 | | (whether to the public or merely to members and
their guests) |
| 18 | | is engaged in the business of selling tangible personal
|
| 19 | | property at retail with respect to such transactions, excepting |
| 20 | | only a
person organized and operated exclusively for |
| 21 | | charitable, religious or
educational purposes either (1), to |
| 22 | | the extent of sales by such person to
its members, students, |
| 23 | | patients or inmates of tangible personal property to
be used |
| 24 | | primarily for the purposes of such person, or (2), to the |
| 25 | | extent of
sales by such person of tangible personal property |
| 26 | | which is not sold or
offered for sale by persons organized for |
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| 1 | | profit. The selling of school
books and school supplies by |
| 2 | | schools at retail to students is not
"primarily for the |
| 3 | | purposes of" the school which does such selling. The
provisions |
| 4 | | of this paragraph shall not apply to nor subject to taxation
|
| 5 | | occasional dinners, socials or similar activities of a person |
| 6 | | organized and
operated exclusively for charitable, religious |
| 7 | | or educational purposes,
whether or not such activities are |
| 8 | | open to the public.
|
| 9 | | A person who is the recipient of a grant or contract under |
| 10 | | Title VII of
the Older Americans Act of 1965 (P.L. 92-258) and |
| 11 | | serves meals to
participants in the federal Nutrition Program |
| 12 | | for the Elderly in return for
contributions established in |
| 13 | | amount by the individual participant pursuant
to a schedule of |
| 14 | | suggested fees as provided for in the federal Act is not
|
| 15 | | engaged in the business of selling tangible personal property |
| 16 | | at retail
with respect to such transactions.
|
| 17 | | "Purchaser" means anyone who, through a sale at retail, |
| 18 | | acquires the
ownership of or title to tangible personal |
| 19 | | property for a valuable
consideration.
|
| 20 | | "Reseller of motor fuel" means any person engaged in the |
| 21 | | business of selling
or delivering or transferring title of |
| 22 | | motor fuel to another person
other than for use or consumption.
|
| 23 | | No person shall act as a reseller of motor fuel within this |
| 24 | | State without
first being registered as a reseller pursuant to |
| 25 | | Section 2c or a retailer
pursuant to Section 2a.
|
| 26 | | "Selling price" or the "amount of sale" means the |
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| 1 | | consideration for a
sale valued in money whether received in |
| 2 | | money or otherwise, including
cash, credits, property, other |
| 3 | | than as hereinafter provided, and services,
but, prior to |
| 4 | | January 1, 2020, not including the value of or credit given for |
| 5 | | traded-in tangible
personal property where the item that is |
| 6 | | traded-in is of like kind and
character as that which is being |
| 7 | | sold; beginning January 1, 2020, "selling price" includes the |
| 8 | | portion of the value of or credit given for traded-in motor |
| 9 | | vehicles of the First Division as defined in Section 1-146 of |
| 10 | | the Illinois Vehicle Code of like kind and character as that |
| 11 | | which is being sold that exceeds $10,000. "Selling price" shall |
| 12 | | be determined without any
deduction on account of the cost of |
| 13 | | the property sold, the cost of
materials used, labor or service |
| 14 | | cost or any other expense whatsoever, but
does not include |
| 15 | | charges that are added to prices by sellers on account of
the |
| 16 | | seller's tax liability under this Act, or on account of the |
| 17 | | seller's
duty to collect, from the purchaser, the tax that is |
| 18 | | imposed by the Use Tax
Act, or, except as otherwise provided |
| 19 | | with respect to any cigarette tax imposed by a home rule unit, |
| 20 | | on account of the seller's tax liability under any local |
| 21 | | occupation tax administered by the Department, or, except as |
| 22 | | otherwise provided with respect to any cigarette tax imposed by |
| 23 | | a home rule unit on account of the seller's duty to collect, |
| 24 | | from the purchasers, the tax that is imposed under any local |
| 25 | | use tax administered by the Department.
Effective December 1, |
| 26 | | 1985, "selling price" shall include charges that
are added to |
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| 1 | | prices by sellers on account of the seller's
tax liability |
| 2 | | under the Cigarette Tax Act, on account of the sellers'
duty to |
| 3 | | collect, from the purchaser, the tax imposed under the |
| 4 | | Cigarette
Use Tax Act, and on account of the seller's duty to |
| 5 | | collect, from the
purchaser, any cigarette tax imposed by a |
| 6 | | home rule unit.
|
| 7 | | Notwithstanding any law to the contrary, for any motor |
| 8 | | vehicle, as defined in Section 1-146 of the Vehicle Code, that |
| 9 | | is sold on or after January 1, 2015 for the purpose of leasing |
| 10 | | the vehicle for a defined period that is longer than one year |
| 11 | | and (1) is a motor vehicle of the second division that: (A) is |
| 12 | | a self-contained motor vehicle designed or permanently |
| 13 | | converted to provide living quarters for recreational, |
| 14 | | camping, or travel use, with direct walk through access to the |
| 15 | | living quarters from the driver's seat; (B) is of the van |
| 16 | | configuration designed for the transportation of not less than |
| 17 | | 7 nor more than 16 passengers; or (C) has a gross vehicle |
| 18 | | weight rating of 8,000 pounds or less or (2) is a motor vehicle |
| 19 | | of the first division, "selling price" or "amount of sale" |
| 20 | | means the consideration received by the lessor pursuant to the |
| 21 | | lease contract, including amounts due at lease signing and all |
| 22 | | monthly or other regular payments charged over the term of the |
| 23 | | lease. Also included in the selling price is any amount |
| 24 | | received by the lessor from the lessee for the leased vehicle |
| 25 | | that is not calculated at the time the lease is executed, |
| 26 | | including, but not limited to, excess mileage charges and |
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| 1 | | charges for excess wear and tear. For sales that occur in |
| 2 | | Illinois, with respect to any amount received by the lessor |
| 3 | | from the lessee for the leased vehicle that is not calculated |
| 4 | | at the time the lease is executed, the lessor who purchased the |
| 5 | | motor vehicle does not incur the tax imposed by the Use Tax Act |
| 6 | | on those amounts, and the retailer who makes the retail sale of |
| 7 | | the motor vehicle to the lessor is not required to collect the |
| 8 | | tax imposed by the Use Tax Act or to pay the tax imposed by this |
| 9 | | Act on those amounts. However, the lessor who purchased the |
| 10 | | motor vehicle assumes the liability for reporting and paying |
| 11 | | the tax on those amounts directly to the Department in the same |
| 12 | | form (Illinois Retailers' Occupation Tax, and local retailers' |
| 13 | | occupation taxes, if applicable) in which the retailer would |
| 14 | | have reported and paid such tax if the retailer had accounted |
| 15 | | for the tax to the Department. For amounts received by the |
| 16 | | lessor from the lessee that are not calculated at the time the |
| 17 | | lease is executed, the lessor must file the return and pay the |
| 18 | | tax to the Department by the due date otherwise required by |
| 19 | | this Act for returns other than transaction returns. If the |
| 20 | | retailer is entitled under this Act to a discount for |
| 21 | | collecting and remitting the tax imposed under this Act to the |
| 22 | | Department with respect to the sale of the motor vehicle to the |
| 23 | | lessor, then the right to the discount provided in this Act |
| 24 | | shall be transferred to the lessor with respect to the tax paid |
| 25 | | by the lessor for any amount received by the lessor from the |
| 26 | | lessee for the leased vehicle that is not calculated at the |
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| 1 | | time the lease is executed; provided that the discount is only |
| 2 | | allowed if the return is timely filed and for amounts timely |
| 3 | | paid. The "selling price" of a motor vehicle that is sold on or |
| 4 | | after January 1, 2015 for the purpose of leasing for a defined |
| 5 | | period of longer than one year shall not be reduced by the |
| 6 | | value of or credit given for traded-in tangible personal |
| 7 | | property owned by the lessor, nor shall it be reduced by the |
| 8 | | value of or credit given for traded-in tangible personal |
| 9 | | property owned by the lessee, regardless of whether the |
| 10 | | trade-in value thereof is assigned by the lessee to the lessor. |
| 11 | | In the case of a motor vehicle that is sold for the purpose of |
| 12 | | leasing for a defined period of longer than one year, the sale |
| 13 | | occurs at the time of the delivery of the vehicle, regardless |
| 14 | | of the due date of any lease payments. A lessor who incurs a |
| 15 | | Retailers' Occupation Tax liability on the sale of a motor |
| 16 | | vehicle coming off lease may not take a credit against that |
| 17 | | liability for the Use Tax the lessor paid upon the purchase of |
| 18 | | the motor vehicle (or for any tax the lessor paid with respect |
| 19 | | to any amount received by the lessor from the lessee for the |
| 20 | | leased vehicle that was not calculated at the time the lease |
| 21 | | was executed) if the selling price of the motor vehicle at the |
| 22 | | time of purchase was calculated using the definition of |
| 23 | | "selling price" as defined in this paragraph.
Notwithstanding |
| 24 | | any other provision of this Act to the contrary, lessors shall |
| 25 | | file all returns and make all payments required under this |
| 26 | | paragraph to the Department by electronic means in the manner |
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| 1 | | and form as required by the Department. This paragraph does not |
| 2 | | apply to leases of motor vehicles for which, at the time the |
| 3 | | lease is entered into, the term of the lease is not a defined |
| 4 | | period, including leases with a defined initial period with the |
| 5 | | option to continue the lease on a month-to-month or other basis |
| 6 | | beyond the initial defined period. |
| 7 | | The phrase "like kind and character" shall be liberally |
| 8 | | construed
(including but not limited to any form of motor |
| 9 | | vehicle for any form of
motor vehicle, or any kind of farm or |
| 10 | | agricultural implement for any other
kind of farm or |
| 11 | | agricultural implement), while not including a kind of item
|
| 12 | | which, if sold at retail by that retailer, would be exempt from |
| 13 | | retailers'
occupation tax and use tax as an isolated or |
| 14 | | occasional sale.
|
| 15 | | "Gross receipts" from the sales of tangible personal |
| 16 | | property at retail
means the total selling price or the amount |
| 17 | | of such sales, as hereinbefore
defined. In the case of charge |
| 18 | | and time sales, the amount thereof shall be
included only as |
| 19 | | and when payments are received by the seller.
Receipts or other |
| 20 | | consideration derived by a seller from
the sale, transfer or |
| 21 | | assignment of accounts receivable to a wholly owned
subsidiary |
| 22 | | will not be deemed payments prior to the time the purchaser
|
| 23 | | makes payment on such accounts.
|
| 24 | | "Department" means the Department of Revenue.
|
| 25 | | "Person" means any natural individual, firm, partnership, |
| 26 | | association,
joint stock company, joint adventure, public or |
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| 1 | | private corporation, limited
liability company, or a receiver, |
| 2 | | executor, trustee, guardian or other
representative appointed |
| 3 | | by order of any court.
|
| 4 | | The isolated or occasional sale of tangible personal |
| 5 | | property at retail
by a person who does not hold himself out as |
| 6 | | being engaged (or who does not
habitually engage) in selling |
| 7 | | such tangible personal property at retail, or
a sale through a |
| 8 | | bulk vending machine, does not constitute engaging in a
|
| 9 | | business of selling such tangible personal property at retail |
| 10 | | within the
meaning of this Act; provided that any person who is |
| 11 | | engaged in a business
which is not subject to the tax imposed |
| 12 | | by this Act because of involving
the sale of or a contract to |
| 13 | | sell real estate or a construction contract to
improve real |
| 14 | | estate or a construction contract to engineer, install, and
|
| 15 | | maintain an integrated system of products, but who, in the |
| 16 | | course of
conducting such business,
transfers tangible |
| 17 | | personal property to users or consumers in the finished
form in |
| 18 | | which it was purchased, and which does not become real estate |
| 19 | | or was
not engineered and installed, under any provision of a |
| 20 | | construction contract or
real estate sale or real estate sales |
| 21 | | agreement entered into with some other
person arising out of or |
| 22 | | because of such nontaxable business, is engaged in the
business |
| 23 | | of selling tangible personal property at retail to the extent |
| 24 | | of the
value of the tangible personal property so transferred. |
| 25 | | If, in such a
transaction, a separate charge is made for the |
| 26 | | tangible personal property so
transferred, the value of such |
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| 1 | | property, for the purpose of this Act, shall be
the amount so |
| 2 | | separately charged, but not less than the cost of such property
|
| 3 | | to the transferor; if no separate charge is made, the value of |
| 4 | | such property,
for the purposes of this Act, is the cost to the |
| 5 | | transferor of such tangible
personal property. Construction |
| 6 | | contracts for the improvement of real estate
consisting of |
| 7 | | engineering, installation, and maintenance of voice, data, |
| 8 | | video,
security, and all telecommunication systems do not |
| 9 | | constitute engaging in a
business of selling tangible personal |
| 10 | | property at retail within the meaning of
this Act if they are |
| 11 | | sold at one specified contract price.
|
| 12 | | A person who holds himself or herself out as being engaged |
| 13 | | (or who habitually
engages) in selling tangible personal |
| 14 | | property at retail is a person
engaged in the business of |
| 15 | | selling tangible personal property at retail
hereunder with |
| 16 | | respect to such sales (and not primarily in a service
|
| 17 | | occupation) notwithstanding the fact that such person designs |
| 18 | | and produces
such tangible personal property on special order |
| 19 | | for the purchaser and in
such a way as to render the property |
| 20 | | of value only to such purchaser, if
such tangible personal |
| 21 | | property so produced on special order serves
substantially the |
| 22 | | same function as stock or standard items of tangible
personal |
| 23 | | property that are sold at retail.
|
| 24 | | Persons who engage in the business of transferring tangible |
| 25 | | personal
property upon the redemption of trading stamps are |
| 26 | | engaged in the business
of selling such property at retail and |
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| 1 | | shall be liable for and shall pay
the tax imposed by this Act |
| 2 | | on the basis of the retail value of the
property transferred |
| 3 | | upon redemption of such stamps.
|
| 4 | | "Bulk vending machine" means a vending machine,
containing |
| 5 | | unsorted confections, nuts, toys, or other items designed
|
| 6 | | primarily to be used or played with by children
which, when a |
| 7 | | coin or coins of a denomination not larger than $0.50 are
|
| 8 | | inserted, are dispensed in equal portions, at random and
|
| 9 | | without selection by the customer.
|
| 10 | | "Remote retailer" means a retailer located outside of this |
| 11 | | State that does not maintain within this State, directly or by |
| 12 | | a subsidiary, an office, distribution house, sales house, |
| 13 | | warehouse or other place of business, or any agent or other |
| 14 | | representative operating within this State under the authority |
| 15 | | of the retailer or its subsidiary, irrespective of whether such |
| 16 | | place of business or agent is located here permanently or |
| 17 | | temporarily or whether such retailer or subsidiary is licensed |
| 18 | | to do business in this State. |
| 19 | | (Source: P.A. 101-31, eff. 6-28-19.)
|
| 20 | | Section 99. Effective date. This Act takes effect upon |
| 21 | | becoming law.
|