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| | 102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB2256 Introduced 2/26/2021, by Sen. Craig Wilcox SYNOPSIS AS INTRODUCED:
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| 35 ILCS 105/3-55 | from Ch. 120, par. 439.3-55 | 35 ILCS 110/3-45 | from Ch. 120, par. 439.33-45 |
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Amends the Use Tax Act and the Service Use Tax Act. Provides that the multistate exemption includes the return of property of an out-of-State lessor or purchaser to this State for storage, repair, or refurbishment, so long as the property is not used by a lessee or purchaser in this State. Effective immediately.
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| | A BILL FOR |
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| | SB2256 | | LRB102 16471 HLH 21863 b |
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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 |
| 5 | | 3-55 as follows:
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| 6 | | (35 ILCS 105/3-55) (from Ch. 120, par. 439.3-55)
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| 7 | | Sec. 3-55. Multistate exemption. To prevent actual or |
| 8 | | likely multistate taxation, the tax imposed by this
Act
does |
| 9 | | not apply to the use of
tangible personal property in this |
| 10 | | State under the following circumstances:
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| 11 | | (a) The use, in this State, of tangible personal property |
| 12 | | acquired
outside this State by a nonresident individual and |
| 13 | | brought into this
State by the individual for his or her own |
| 14 | | use while temporarily within
this State or while passing |
| 15 | | through this State.
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| 16 | | (b) (Blank).
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| 17 | | (c) The use, in this State, by owners, lessors,
or
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| 18 | | shippers
of tangible personal property that is utilized by |
| 19 | | interstate carriers
for hire for use as rolling stock moving |
| 20 | | in interstate commerce as
long as so used by the interstate |
| 21 | | carriers for hire, and equipment
operated by a |
| 22 | | telecommunications provider, licensed as a common carrier by |
| 23 | | the
Federal Communications Commission, which is permanently |
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| 1 | | installed in or affixed
to aircraft moving in interstate |
| 2 | | commerce.
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| 3 | | (d) The use, in this State, of tangible personal property |
| 4 | | that is
acquired outside this State and caused to be brought |
| 5 | | into this State by
a person who has already paid a tax in |
| 6 | | another State in respect to the
sale, purchase, or use of that |
| 7 | | property, to the extent of the amount of
the tax properly due |
| 8 | | and paid in the other State.
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| 9 | | (e) The temporary storage, in this State, of tangible |
| 10 | | personal
property that is acquired outside this State and |
| 11 | | that, after
being brought into this State and stored here |
| 12 | | temporarily, is used
solely outside this State or is |
| 13 | | physically attached to or incorporated
into other tangible |
| 14 | | personal property that is used solely outside this
State, or |
| 15 | | is altered by converting, fabricating, manufacturing, |
| 16 | | printing,
processing, or shaping, and, as altered, is used |
| 17 | | solely outside this State. For purposes of this subsection, |
| 18 | | use in this State does not include the return of the property |
| 19 | | of a lessor or purchaser to this state for storage, repair or |
| 20 | | refurbishment so long as the property is not utilized by a |
| 21 | | lessee or purchaser in this State. Refurbishment includes the |
| 22 | | replacement of component parts as well as upgrades.
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| 23 | | (e-5) The return of property of an out-of-State lessor or |
| 24 | | purchaser to this State for storage, repair, or refurbishment, |
| 25 | | so long as the property is not used by a lessee or purchaser in |
| 26 | | this State. As used in this subsection (e-5), refurbishment |
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| 1 | | includes the replacement of component parts as well as |
| 2 | | upgrades. |
| 3 | | (f) The temporary storage in this State of building |
| 4 | | materials and
fixtures that are acquired either in this State |
| 5 | | or outside this State
by an Illinois registered combination |
| 6 | | retailer and construction contractor, and
that the purchaser |
| 7 | | thereafter uses outside this State by incorporating that
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| 8 | | property into real estate located outside this State.
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| 9 | | (g) The use or purchase of tangible personal property by a |
| 10 | | common carrier
by rail or motor that receives the physical |
| 11 | | possession of the property in
Illinois, and
that transports |
| 12 | | the property, or shares with another common carrier in the
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| 13 | | transportation of the property, out of Illinois on a standard |
| 14 | | uniform bill of
lading showing the seller of the property as |
| 15 | | the shipper or consignor of the
property to a destination |
| 16 | | outside Illinois, for use outside Illinois.
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| 17 | | (h) Except as provided in subsection (h-1), the use, in |
| 18 | | this State, of a motor vehicle that was sold in
this State to a |
| 19 | | nonresident, even though the motor vehicle is
delivered to the |
| 20 | | nonresident in this State, if the motor vehicle
is not to be |
| 21 | | titled in this State, and if a
drive-away permit is issued to |
| 22 | | the motor vehicle as
provided in Section 3-603 of the Illinois |
| 23 | | Vehicle Code or if the
nonresident purchaser has vehicle |
| 24 | | registration plates to transfer
to the motor vehicle upon |
| 25 | | returning to his or her home state.
The issuance of the |
| 26 | | drive-away permit or having the
out-of-state
registration |
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| 1 | | plates to be transferred shall be prima facie evidence
that |
| 2 | | the motor vehicle will not be titled in this State.
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| 3 | | (h-1) The exemption under subsection (h) does not apply if |
| 4 | | the state in which the motor vehicle will be titled does not |
| 5 | | allow a reciprocal exemption for the use in that state of a |
| 6 | | motor vehicle sold and delivered in that state to an Illinois |
| 7 | | resident but titled in Illinois. The tax collected under this |
| 8 | | Act on the sale of a motor vehicle in this State to a resident |
| 9 | | of another state that does not allow a reciprocal exemption |
| 10 | | shall be imposed at a rate equal to the state's rate of tax on |
| 11 | | taxable property in the state in which the purchaser is a |
| 12 | | resident, except that the tax shall not exceed the tax that |
| 13 | | would otherwise be imposed under this Act. At the time of the |
| 14 | | sale, the purchaser shall execute a statement, signed under |
| 15 | | penalty of perjury, of his or her intent to title the vehicle |
| 16 | | in the state in which the purchaser is a resident within 30 |
| 17 | | days after the sale and of the fact of the payment to the State |
| 18 | | of Illinois of tax in an amount equivalent to the state's rate |
| 19 | | of tax on taxable property in his or her state of residence and |
| 20 | | shall submit the statement to the appropriate tax collection |
| 21 | | agency in his or her state of residence. In addition, the |
| 22 | | retailer must retain a signed copy of the statement in his or |
| 23 | | her records. Nothing in this subsection shall be construed to |
| 24 | | require the removal of the vehicle from this state following |
| 25 | | the filing of an intent to title the vehicle in the purchaser's |
| 26 | | state of residence if the purchaser titles the vehicle in his |
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| 1 | | or her state of residence within 30 days after the date of |
| 2 | | sale. The tax collected under this Act in accordance with this |
| 3 | | subsection (h-1) shall be proportionately distributed as if |
| 4 | | the tax were collected at the 6.25% general rate imposed under |
| 5 | | this Act.
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| 6 | | (h-2) The following exemptions apply with respect to |
| 7 | | certain aircraft: |
| 8 | | (1) Beginning on July 1, 2007, no tax is imposed under |
| 9 | | this Act on the purchase of an aircraft, as defined in |
| 10 | | Section 3 of the Illinois Aeronautics Act, if all of the |
| 11 | | following conditions are met: |
| 12 | | (A) the aircraft leaves this State within 15 days |
| 13 | | after the later of either the issuance of the final |
| 14 | | billing for the purchase of the aircraft or the |
| 15 | | authorized approval for return to service, completion |
| 16 | | of the maintenance record entry, and completion of the |
| 17 | | test flight and ground test for inspection, as |
| 18 | | required by 14 C.F.R. 91.407; |
| 19 | | (B) the aircraft is not based or registered in |
| 20 | | this State after the purchase of the aircraft; and |
| 21 | | (C) the purchaser provides the Department with a |
| 22 | | signed and dated certification, on a form prescribed |
| 23 | | by the Department, certifying that the requirements of |
| 24 | | this item (1) are met. The certificate must also |
| 25 | | include the name and address of the purchaser, the |
| 26 | | address of the location where the aircraft is to be |
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| 1 | | titled or registered, the address of the primary |
| 2 | | physical location of the aircraft, and other |
| 3 | | information that the Department may reasonably |
| 4 | | require. |
| 5 | | (2) Beginning on July 1, 2007, no tax is imposed under |
| 6 | | this Act on the use of an aircraft, as defined in Section 3 |
| 7 | | of the Illinois Aeronautics Act, that is temporarily |
| 8 | | located in this State for the purpose of a prepurchase |
| 9 | | evaluation if all of the following conditions are met: |
| 10 | | (A) the aircraft is not based or registered in |
| 11 | | this State after the prepurchase evaluation; and |
| 12 | | (B) the purchaser provides the Department with a |
| 13 | | signed and dated certification, on a form prescribed |
| 14 | | by the Department, certifying that the requirements of |
| 15 | | this item (2) are met. The certificate must also |
| 16 | | include the name and address of the purchaser, the |
| 17 | | address of the location where the aircraft is to be |
| 18 | | titled or registered, the address of the primary |
| 19 | | physical location of the aircraft, and other |
| 20 | | information that the Department may reasonably |
| 21 | | require. |
| 22 | | (3) Beginning on July 1, 2007, no tax is imposed under |
| 23 | | this Act on the use of an aircraft, as defined in Section 3 |
| 24 | | of the Illinois Aeronautics Act, that is temporarily |
| 25 | | located in this State for the purpose of a post-sale |
| 26 | | customization if all of the following conditions are met: |
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| 1 | | (A) the aircraft leaves this State within 15 days |
| 2 | | after the authorized approval for return to service, |
| 3 | | completion of the maintenance record entry, and |
| 4 | | completion of the test flight and ground test for |
| 5 | | inspection, as required by 14 C.F.R. 91.407; |
| 6 | | (B) the aircraft is not based or registered in |
| 7 | | this State either before or after the post-sale |
| 8 | | customization; and |
| 9 | | (C) the purchaser provides the Department with a |
| 10 | | signed and dated certification, on a form prescribed |
| 11 | | by the Department, certifying that the requirements of |
| 12 | | this item (3) are met. The certificate must also |
| 13 | | include the name and address of the purchaser, the |
| 14 | | address of the location where the aircraft is to be |
| 15 | | titled or registered, the address of the primary |
| 16 | | physical location of the aircraft, and other |
| 17 | | information that the Department may reasonably |
| 18 | | require. |
| 19 | | If tax becomes due under this subsection (h-2) because of |
| 20 | | the purchaser's use of the aircraft in this State, the |
| 21 | | purchaser shall file a return with the Department and pay the |
| 22 | | tax on the fair market value of the aircraft. This return and |
| 23 | | payment of the tax must be made no later than 30 days after the |
| 24 | | aircraft is used in a taxable manner in this State. The tax is |
| 25 | | based on the fair market value of the aircraft on the date that |
| 26 | | it is first used in a taxable manner in this State. |
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| 1 | | For purposes of this subsection (h-2): |
| 2 | | "Based in this State" means hangared, stored, or otherwise |
| 3 | | used, excluding post-sale customizations as defined in this |
| 4 | | Section, for 10 or more days in each 12-month period |
| 5 | | immediately following the date of the sale of the aircraft. |
| 6 | | "Post-sale customization" means any improvement, |
| 7 | | maintenance, or repair that is performed on an aircraft |
| 8 | | following a transfer of ownership of the aircraft. |
| 9 | | "Prepurchase evaluation" means an examination of an |
| 10 | | aircraft to provide a potential purchaser with information |
| 11 | | relevant to the potential purchase. |
| 12 | | "Registered in this State" means an aircraft registered |
| 13 | | with the Department of Transportation, Aeronautics Division, |
| 14 | | or titled or registered with the Federal Aviation |
| 15 | | Administration to an address located in this State.
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| 16 | | This subsection (h-2) is exempt from the provisions of |
| 17 | | Section 3-90.
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| 18 | | (i) Beginning July 1, 1999, the use, in this State, of fuel |
| 19 | | acquired
outside this State and brought into this State in the |
| 20 | | fuel supply
tanks of locomotives engaged in freight hauling |
| 21 | | and passenger service for
interstate commerce. This subsection |
| 22 | | is exempt from the provisions of Section
3-90.
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| 23 | | (j) Beginning on January 1, 2002 and through June 30, |
| 24 | | 2016, the use of tangible personal property
purchased from an |
| 25 | | Illinois retailer by a taxpayer engaged in centralized
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| 26 | | purchasing activities in Illinois who will, upon receipt of |
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| 1 | | the property in
Illinois, temporarily store the property in |
| 2 | | Illinois (i) for the purpose of
subsequently transporting it |
| 3 | | outside this State for use or consumption
thereafter solely |
| 4 | | outside this State or (ii) for the purpose of being
processed, |
| 5 | | fabricated, or manufactured into, attached to, or incorporated |
| 6 | | into
other tangible personal property to be transported |
| 7 | | outside this State and
thereafter used or consumed solely |
| 8 | | outside this State. The Director of Revenue
shall, pursuant to |
| 9 | | rules adopted in accordance with the Illinois Administrative
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| 10 | | Procedure Act, issue a permit to any taxpayer in good standing |
| 11 | | with the
Department who is eligible for the exemption under |
| 12 | | this subsection (j). The
permit issued under this subsection |
| 13 | | (j) shall authorize the holder, to the
extent and in the manner |
| 14 | | specified in the rules adopted under this Act, to
purchase |
| 15 | | tangible personal property from a retailer exempt from the |
| 16 | | taxes
imposed by this Act. Taxpayers shall maintain all |
| 17 | | necessary books and records
to substantiate the use and |
| 18 | | consumption of all such tangible personal property
outside of |
| 19 | | the State of Illinois.
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| 20 | | (Source: P.A. 100-321, eff. 8-24-17.)
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| 21 | | Section 10. The Service Use Tax Act is amended by changing |
| 22 | | Section 3-45 as follows:
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| 23 | | (35 ILCS 110/3-45) (from Ch. 120, par. 439.33-45)
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| 24 | | Sec. 3-45. Multistate exemption. To prevent actual or |
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| 1 | | likely multistate
taxation, the tax imposed by this Act does |
| 2 | | not apply
to the use of tangible personal property in this |
| 3 | | State under the following
circumstances:
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| 4 | | (a) The use, in this State, of property acquired outside |
| 5 | | this State
by a nonresident individual and brought into this |
| 6 | | State by the
individual for his or her own use while |
| 7 | | temporarily within this State or
while passing through this |
| 8 | | State.
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| 9 | | (b) The use, in this State, of property that is
acquired |
| 10 | | outside
this State and that is moved into this State for use as |
| 11 | | rolling stock
moving in interstate commerce.
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| 12 | | (c) The use, in this State, of property that is acquired |
| 13 | | outside
this State and caused to be brought into this State by |
| 14 | | a person who has
already paid a tax in another state in respect |
| 15 | | to the sale, purchase, or
use of that property, to the extent |
| 16 | | of the amount of the tax properly
due and paid in the other |
| 17 | | state.
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| 18 | | (d) The temporary storage, in this State, of property that |
| 19 | | is
acquired outside this State and that after being brought |
| 20 | | into
this State and stored here temporarily, is used solely |
| 21 | | outside this
State or is physically attached to or |
| 22 | | incorporated into other property
that is used solely outside |
| 23 | | this State, or is altered by converting,
fabricating, |
| 24 | | manufacturing, printing, processing, or shaping, and, as
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| 25 | | altered, is used solely outside this State.
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| 26 | | (d-5) The return of property of an out-of-State lessor or |
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| 1 | | purchaser to this State for storage, repair, or refurbishment, |
| 2 | | so long as the property is not used by a lessee or purchaser in |
| 3 | | this State. As used in this subsection (d-5), refurbishment |
| 4 | | includes the replacement of component parts as well as |
| 5 | | upgrades. |
| 6 | | (e) Beginning July 1, 1999, the use, in this State, of fuel |
| 7 | | acquired
outside this State and brought into this State in the |
| 8 | | fuel supply
tanks of locomotives engaged in freight hauling |
| 9 | | and passenger service for
interstate commerce. This subsection |
| 10 | | is exempt from the provisions of Section
3-75.
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| 11 | | (f) Beginning on January 1, 2002 and through June 30, |
| 12 | | 2016, the use of tangible personal property
purchased from an |
| 13 | | Illinois retailer by a taxpayer engaged in centralized
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| 14 | | purchasing activities in Illinois who will, upon receipt of |
| 15 | | the property in
Illinois, temporarily store the property in |
| 16 | | Illinois (i) for the purpose of
subsequently transporting it |
| 17 | | outside this State for use or consumption
thereafter solely |
| 18 | | outside this State or (ii) for the purpose of being
processed, |
| 19 | | fabricated, or manufactured into, attached to, or incorporated |
| 20 | | into
other tangible personal property to be transported |
| 21 | | outside this State and
thereafter used or consumed solely |
| 22 | | outside this State. The Director of Revenue
shall, pursuant to |
| 23 | | rules adopted in accordance with the Illinois Administrative
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| 24 | | Procedure Act, issue a permit to any taxpayer in good standing |
| 25 | | with the
Department who is eligible for the exemption under |
| 26 | | this subsection (f). The
permit issued under this subsection |
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| 1 | | (f) shall authorize the holder, to the
extent and in the manner |
| 2 | | specified in the rules adopted under this Act, to
purchase |
| 3 | | tangible personal property from a retailer exempt from the |
| 4 | | taxes
imposed by this Act. Taxpayers shall maintain all |
| 5 | | necessary books and records
to substantiate the use and |
| 6 | | consumption of all such tangible personal property
outside of |
| 7 | | the State of Illinois.
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| 8 | | (Source: P.A. 97-73, eff. 6-30-11.)
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| 9 | | Section 99. Effective date. This Act takes effect upon |
| 10 | | becoming law.
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