Bill Text: IL SB2279 | 2021-2022 | 102nd General Assembly | Chaptered

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Bill Title: Reinserts the provisions of the engrossed bill with changes. Removes provisions from the bill that amend the Property Tax Code. Makes changes concerning statutes of limitations for issuing a notice of tax liability. Further amends the Illinois Income Tax Act. Provides that, when a taxpayer sells or transfers the major part of (i) the stock of goods which he is engaged in the business of selling, (ii) furniture or fixtures, (iii) machinery and equipment, or (iv) real property, then the taxpayer shall notify the Department of Revenue (currently, the Chicago office of the Department of Revenue) no more than 10 business days before (currently, after) the sale or transfer. Provides that payments of winnings from sports wagering conducted in accordance with the Sports Wagering Act are allocable to this State. In provisions concerning the Economic Development for a Growing Economy (EDGE) Tax Credit, provides that, if, during any taxable year, a taxpayer ceases operations at a project location that is the subject of an EDGE agreement with the intent to terminate operations in the State, then the taxpayer's State income tax liability shall be increased by the amount of any credit allowed prior to the date the taxpayer ceases operations. Adds provisions to the engrossed bill amending the Tobacco Products Tax Act of 1995. Provides that the definition of "electronic cigarette" does not include a device designed solely for use with cannabis or a device that contains a solution or substance that contains cannabis subject to tax under the Compassionate Use of Medical Cannabis Program Act or the Cannabis Regulation and Tax Act. Provides that the changes made by this amendatory Act apply on and after June 28, 2020. Amends the Local Government Revenue Recapture Act. Provides that a niece, nephew, great-niece, or great-nephew is considered a "family member" for purposes of the Act. Makes changes concerning circumstances under which a third party may access a municipality's or county's financial information. In provisions concerning third party aggregated data, provides that no aggregated data may be published that includes taxpayer information for 4 or fewer taxpayers. Makes other changes. Effective immediately.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Passed) 2021-06-25 - Public Act . . . . . . . . . 102-0040 [SB2279 Detail]

Download: Illinois-2021-SB2279-Chaptered.html

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Public Act 102-0040
SB2279 Enrolled LRB102 16048 HLH 21420 b
AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Department of Revenue Law of the Civil
Administrative Code of Illinois is amended by changing Section
2505-380 as follows:
(20 ILCS 2505/2505-380) (was 20 ILCS 2505/39b47)
Sec. 2505-380. Revocation of or refusal to issue or
reissue a certificate of registration, permit, or license.
(a) The Department has the power, after notice and an
opportunity for a hearing, to revoke a certificate of
registration, permit, or license issued by the Department if
the holder of the certificate of registration, permit, or
license fails to file a return, or to pay the tax, fee,
penalty, or interest shown in a filed return, or to pay any
final assessment of tax, fee, penalty, or interest, as
required by the tax or fee Act under which the certificate of
registration, permit, or license is required or any other tax
or fee Act administered by the Department.
(b) The Department may refuse to issue, reissue, or renew
a certificate of registration, permit, or license authorized
to be issued by the Department if a person who is named as the
owner, a partner, a corporate officer, or, in the case of a

limited liability company, a manager or member, of the
applicant on the application for the certificate of
registration, permit or license, is or has been named as the
owner, a partner, a corporate officer, or in the case of a
limited liability company, a manager or member, on the
application for the certificate of registration, permit, or
license of a person that is in default for moneys due under the
tax or fee Act upon which the certificate of registration,
permit, or license is required or any other tax or fee Act
administered by the Department. For purposes of this Section
only, in determining whether a person is in default for moneys
due, the Department shall include only amounts established as
a final liability within the 23 20 years prior to the date of
the Department's notice of refusal to issue or reissue the
certificate of registration, permit, or license. For purposes
of this Section, "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.
(c) When revoking or refusing to issue or reissue a
certificate of registration, permit, or license issued by the
Department, the procedure for notice and hearing used shall be
the procedure provided under the Act pursuant to which the
certificate of registration, permit, or license was issued.
(Source: P.A. 98-496, eff. 1-1-14; 98-1055, eff. 1-1-16.)

Section 10. The Illinois Income Tax Act is amended by
changing Sections 211, 303, 304, 710, 902, and 905 as follows:
(35 ILCS 5/211)
Sec. 211. Economic Development for a Growing Economy Tax
Credit. For tax years beginning on or after January 1, 1999, a
Taxpayer who has entered into an Agreement (including a New
Construction EDGE Agreement) under the Economic Development
for a Growing Economy Tax Credit Act is entitled to a credit
against the taxes imposed under subsections (a) and (b) of
Section 201 of this Act in an amount to be determined in the
Agreement. If the Taxpayer is a partnership or Subchapter S
corporation, the credit shall be allowed to the partners or
shareholders in accordance with the determination of income
and distributive share of income under Sections 702 and 704
and subchapter S of the Internal Revenue Code. The Department,
in cooperation with the Department of Commerce and Economic
Opportunity, shall prescribe rules to enforce and administer
the provisions of this Section. This Section is exempt from
the provisions of Section 250 of this Act.
The credit shall be subject to the conditions set forth in
the Agreement and the following limitations:
(1) The tax credit shall not exceed the Incremental
Income Tax (as defined in Section 5-5 of the Economic
Development for a Growing Economy Tax Credit Act) with

respect to the project; additionally, the New Construction
EDGE Credit shall not exceed the New Construction EDGE
Incremental Income Tax (as defined in Section 5-5 of the
Economic Development for a Growing Economy Tax Credit
Act).
(2) The amount of the credit allowed during the tax
year plus the sum of all amounts allowed in prior years
shall not exceed 100% of the aggregate amount expended by
the Taxpayer during all prior tax years on approved costs
defined by Agreement.
(3) The amount of the credit shall be determined on an
annual basis. Except as applied in a carryover year
pursuant to Section 211(4) of this Act, the credit may not
be applied against any State income tax liability in more
than 10 taxable years; provided, however, that (i) an
eligible business certified by the Department of Commerce
and Economic Opportunity under the Corporate Headquarters
Relocation Act may not apply the credit against any of its
State income tax liability in more than 15 taxable years
and (ii) credits allowed to that eligible business are
subject to the conditions and requirements set forth in
Sections 5-35 and 5-45 of the Economic Development for a
Growing Economy Tax Credit Act and Section 5-51 as
applicable to New Construction EDGE Credits.
(4) The credit may not exceed the amount of taxes
imposed pursuant to subsections (a) and (b) of Section 201

of this Act. Any credit that is unused in the year the
credit is computed may be carried forward and applied to
the tax liability of the 5 taxable years following the
excess credit year. The credit shall be applied to the
earliest year for which there is a tax liability. If there
are credits from more than one tax year that are available
to offset a liability, the earlier credit shall be applied
first.
(5) No credit shall be allowed with respect to any
Agreement for any taxable year ending after the
Noncompliance Date. Upon receiving notification by the
Department of Commerce and Economic Opportunity of the
noncompliance of a Taxpayer with an Agreement, the
Department shall notify the Taxpayer that no credit is
allowed with respect to that Agreement for any taxable
year ending after the Noncompliance Date, as stated in
such notification. If any credit has been allowed with
respect to an Agreement for a taxable year ending after
the Noncompliance Date for that Agreement, any refund paid
to the Taxpayer for that taxable year shall, to the extent
of that credit allowed, be an erroneous refund within the
meaning of Section 912 of this Act.
If, during any taxable year, a taxpayer ceases
operations at a project location that is the subject of
that Agreement with the intent to terminate operations in
the State, the tax imposed under subsections (a) and (b)

of Section 201 of this Act for such taxable year shall be
increased by the amount of any credit allowed under the
Agreement for that project location prior to the date the
taxpayer ceases operations.
(6) For purposes of this Section, the terms
"Agreement", "Incremental Income Tax", "New Construction
EDGE Agreement", "New Construction EDGE Credit", "New
Construction EDGE Incremental Income Tax", and
"Noncompliance Date" have the same meaning as when used in
the Economic Development for a Growing Economy Tax Credit
Act.
(Source: P.A. 101-9, eff. 6-5-19.)
(35 ILCS 5/303) (from Ch. 120, par. 3-303)
Sec. 303. (a) In general. Any item of capital gain or loss,
and any item of income from rents or royalties from real or
tangible personal property, interest, dividends, and patent or
copyright royalties, and prizes awarded under the Illinois
Lottery Law, and, for taxable years ending on or after
December 31, 2019, wagering and gambling winnings from
Illinois sources as set forth in subsection (e-1) of this
Section, and, for taxable years ending on or after December
31, 2021, sports wagering and winnings from Illinois sources
as set forth in subsection (e-2) of this Section, to the extent
such item constitutes nonbusiness income, together with any
item of deduction directly allocable thereto, shall be

allocated by any person other than a resident as provided in
this Section.
(b) Capital gains and losses.
(1) Real property. Capital gains and losses from sales
or exchanges of real property are allocable to this State
if the property is located in this State.
(2) Tangible personal property. Capital gains and
losses from sales or exchanges of tangible personal
property are allocable to this State if, at the time of
such sale or exchange:
(A) The property had its situs in this State; or
(B) The taxpayer had its commercial domicile in
this State and was not taxable in the state in which
the property had its situs.
(3) Intangibles. Capital gains and losses from sales
or exchanges of intangible personal property are allocable
to this State if the taxpayer had its commercial domicile
in this State at the time of such sale or exchange.
(c) Rents and royalties.
(1) Real property. Rents and royalties from real
property are allocable to this State if the property is
located in this State.
(2) Tangible personal property. Rents and royalties
from tangible personal property are allocable to this
State:
(A) If and to the extent that the property is

utilized in this State; or
(B) In their entirety if, at the time such rents or
royalties were paid or accrued, the taxpayer had its
commercial domicile in this State and was not
organized under the laws of or taxable with respect to
such rents or royalties in the state in which the
property was utilized. The extent of utilization of
tangible personal property in a state is determined by
multiplying the rents or royalties derived from such
property by a fraction, the numerator of which is the
number of days of physical location of the property in
the state during the rental or royalty period in the
taxable year and the denominator of which is the
number of days of physical location of the property
everywhere during all rental or royalty periods in the
taxable year. If the physical location of the property
during the rental or royalty period is unknown or
unascertainable by the taxpayer, tangible personal
property is utilized in the state in which the
property was located at the time the rental or royalty
payer obtained possession.
(d) Patent and copyright royalties.
(1) Allocation. Patent and copyright royalties are
allocable to this State:
(A) If and to the extent that the patent or
copyright is utilized by the payer in this State; or

(B) If and to the extent that the patent or
copyright is utilized by the payer in a state in which
the taxpayer is not taxable with respect to such
royalties and, at the time such royalties were paid or
accrued, the taxpayer had its commercial domicile in
this State.
(2) Utilization.
(A) A patent is utilized in a state to the extent
that it is employed in production, fabrication,
manufacturing or other processing in the state or to
the extent that a patented product is produced in the
state. If the basis of receipts from patent royalties
does not permit allocation to states or if the
accounting procedures do not reflect states of
utilization, the patent is utilized in this State if
the taxpayer has its commercial domicile in this
State.
(B) A copyright is utilized in a state to the
extent that printing or other publication originates
in the state. If the basis of receipts from copyright
royalties does not permit allocation to states or if
the accounting procedures do not reflect states of
utilization, the copyright is utilized in this State
if the taxpayer has its commercial domicile in this
State.
(e) Illinois lottery prizes. Prizes awarded under the

Illinois Lottery Law are allocable to this State. Payments
received in taxable years ending on or after December 31,
2013, from the assignment of a prize under Section 13.1 of the
Illinois Lottery Law are allocable to this State.
(e-1) Wagering and gambling winnings. Payments received in
taxable years ending on or after December 31, 2019 of winnings
from pari-mutuel wagering conducted at a wagering facility
licensed under the Illinois Horse Racing Act of 1975 and from
gambling games conducted on a riverboat or in a casino or
organization gaming facility licensed under the Illinois
Gambling Act are allocable to this State.
(e-2) Sports wagering and winnings. Payments received in
taxable years ending on or after December 31, 2021 of winnings
from sports wagering conducted in accordance with the Sports
Wagering Act are allocable to this State.
(e-5) Unemployment benefits. Unemployment benefits paid by
the Illinois Department of Employment Security are allocable
to this State.
(f) Taxability in other state. For purposes of allocation
of income pursuant to this Section, a taxpayer is taxable in
another state if:
(1) In that state he is subject to a net income tax, a
franchise tax measured by net income, a franchise tax for
the privilege of doing business, or a corporate stock tax;
or
(2) That state has jurisdiction to subject the

taxpayer to a net income tax regardless of whether, in
fact, the state does or does not.
(g) Cross references.
(1) For allocation of interest and dividends by
persons other than residents, see Section 301(c)(2).
(2) For allocation of nonbusiness income by residents,
see Section 301(a).
(Source: P.A. 101-31, eff. 6-28-19.)
(35 ILCS 5/304) (from Ch. 120, par. 3-304)
Sec. 304. Business income of persons other than residents.
(a) In general. The business income of a person other than
a resident shall be allocated to this State if such person's
business income is derived solely from this State. If a person
other than a resident derives business income from this State
and one or more other states, then, for tax years ending on or
before December 30, 1998, and except as otherwise provided by
this Section, such person's business income shall be
apportioned to this State by multiplying the income by a
fraction, the numerator of which is the sum of the property
factor (if any), the payroll factor (if any) and 200% of the
sales factor (if any), and the denominator of which is 4
reduced by the number of factors other than the sales factor
which have a denominator of zero and by an additional 2 if the
sales factor has a denominator of zero. For tax years ending on
or after December 31, 1998, and except as otherwise provided

by this Section, persons other than residents who derive
business income from this State and one or more other states
shall compute their apportionment factor by weighting their
property, payroll, and sales factors as provided in subsection
(h) of this Section.
(1) Property factor.
(A) The property factor is a fraction, the numerator
of which is the average value of the person's real and
tangible personal property owned or rented and used in the
trade or business in this State during the taxable year
and the denominator of which is the average value of all
the person's real and tangible personal property owned or
rented and used in the trade or business during the
taxable year.
(B) Property owned by the person is valued at its
original cost. Property rented by the person is valued at
8 times the net annual rental rate. Net annual rental rate
is the annual rental rate paid by the person less any
annual rental rate received by the person from
sub-rentals.
(C) The average value of property shall be determined
by averaging the values at the beginning and ending of the
taxable year but the Director may require the averaging of
monthly values during the taxable year if reasonably
required to reflect properly the average value of the
person's property.

(2) Payroll factor.
(A) The payroll factor is a fraction, the numerator of
which is the total amount paid in this State during the
taxable year by the person for compensation, and the
denominator of which is the total compensation paid
everywhere during the taxable year.
(B) Compensation is paid in this State if:
(i) The individual's service is performed entirely
within this State;
(ii) The individual's service is performed both
within and without this State, but the service
performed without this State is incidental to the
individual's service performed within this State; or
(iii) For tax years ending prior to December 31,
2020, some of the service is performed within this
State and either the base of operations, or if there is
no base of operations, the place from which the
service is directed or controlled is within this
State, or the base of operations or the place from
which the service is directed or controlled is not in
any state in which some part of the service is
performed, but the individual's residence is in this
State. For tax years ending on or after December 31,
2020, compensation is paid in this State if some of the
individual's service is performed within this State,
the individual's service performed within this State

is nonincidental to the individual's service performed
without this State, and the individual's service is
performed within this State for more than 30 working
days during the tax year. The amount of compensation
paid in this State shall include the portion of the
individual's total compensation for services performed
on behalf of his or her employer during the tax year
which the number of working days spent within this
State during the tax year bears to the total number of
working days spent both within and without this State
during the tax year. For purposes of this paragraph:
(a) The term "working day" means all days
during the tax year in which the individual
performs duties on behalf of his or her employer.
All days in which the individual performs no
duties on behalf of his or her employer (e.g.,
weekends, vacation days, sick days, and holidays)
are not working days.
(b) A working day is spent within this State
if:
(1) the individual performs service on
behalf of the employer and a greater amount of
time on that day is spent by the individual
performing duties on behalf of the employer
within this State, without regard to time
spent traveling, than is spent performing

duties on behalf of the employer without this
State; or
(2) the only service the individual
performs on behalf of the employer on that day
is traveling to a destination within this
State, and the individual arrives on that day.
(c) Working days spent within this State do
not include any day in which the employee is
performing services in this State during a
disaster period solely in response to a request
made to his or her employer by the government of
this State, by any political subdivision of this
State, or by a person conducting business in this
State to perform disaster or emergency-related
services in this State. For purposes of this item
(c):
"Declared State disaster or emergency"
means a disaster or emergency event (i) for
which a Governor's proclamation of a state of
emergency has been issued or (ii) for which a
Presidential declaration of a federal major
disaster or emergency has been issued.
"Disaster period" means a period that
begins 10 days prior to the date of the
Governor's proclamation or the President's
declaration (whichever is earlier) and extends

for a period of 60 calendar days after the end
of the declared disaster or emergency period.
"Disaster or emergency-related services"
means repairing, renovating, installing,
building, or rendering services or conducting
other business activities that relate to
infrastructure that has been damaged,
impaired, or destroyed by the declared State
disaster or emergency.
"Infrastructure" means property and
equipment owned or used by a public utility,
communications network, broadband and internet
service provider, cable and video service
provider, electric or gas distribution system,
or water pipeline that provides service to
more than one customer or person, including
related support facilities. "Infrastructure"
includes, but is not limited to, real and
personal property such as buildings, offices,
power lines, cable lines, poles,
communications lines, pipes, structures, and
equipment.
(iv) Compensation paid to nonresident professional
athletes.
(a) General. The Illinois source income of a
nonresident individual who is a member of a

professional athletic team includes the portion of the
individual's total compensation for services performed
as a member of a professional athletic team during the
taxable year which the number of duty days spent
within this State performing services for the team in
any manner during the taxable year bears to the total
number of duty days spent both within and without this
State during the taxable year.
(b) Travel days. Travel days that do not involve
either a game, practice, team meeting, or other
similar team event are not considered duty days spent
in this State. However, such travel days are
considered in the total duty days spent both within
and without this State.
(c) Definitions. For purposes of this subpart
(iv):
(1) The term "professional athletic team"
includes, but is not limited to, any professional
baseball, basketball, football, soccer, or hockey
team.
(2) The term "member of a professional
athletic team" includes those employees who are
active players, players on the disabled list, and
any other persons required to travel and who
travel with and perform services on behalf of a
professional athletic team on a regular basis.

This includes, but is not limited to, coaches,
managers, and trainers.
(3) Except as provided in items (C) and (D) of
this subpart (3), the term "duty days" means all
days during the taxable year from the beginning of
the professional athletic team's official
pre-season training period through the last game
in which the team competes or is scheduled to
compete. Duty days shall be counted for the year
in which they occur, including where a team's
official pre-season training period through the
last game in which the team competes or is
scheduled to compete, occurs during more than one
tax year.
(A) Duty days shall also include days on
which a member of a professional athletic team
performs service for a team on a date that
does not fall within the foregoing period
(e.g., participation in instructional leagues,
the "All Star Game", or promotional
"caravans"). Performing a service for a
professional athletic team includes conducting
training and rehabilitation activities, when
such activities are conducted at team
facilities.
(B) Also included in duty days are game

days, practice days, days spent at team
meetings, promotional caravans, preseason
training camps, and days served with the team
through all post-season games in which the
team competes or is scheduled to compete.
(C) Duty days for any person who joins a
team during the period from the beginning of
the professional athletic team's official
pre-season training period through the last
game in which the team competes, or is
scheduled to compete, shall begin on the day
that person joins the team. Conversely, duty
days for any person who leaves a team during
this period shall end on the day that person
leaves the team. Where a person switches teams
during a taxable year, a separate duty-day
calculation shall be made for the period the
person was with each team.
(D) Days for which a member of a
professional athletic team is not compensated
and is not performing services for the team in
any manner, including days when such member of
a professional athletic team has been
suspended without pay and prohibited from
performing any services for the team, shall
not be treated as duty days.

(E) Days for which a member of a
professional athletic team is on the disabled
list and does not conduct rehabilitation
activities at facilities of the team, and is
not otherwise performing services for the team
in Illinois, shall not be considered duty days
spent in this State. All days on the disabled
list, however, are considered to be included
in total duty days spent both within and
without this State.
(4) The term "total compensation for services
performed as a member of a professional athletic
team" means the total compensation received during
the taxable year for services performed:
(A) from the beginning of the official
pre-season training period through the last
game in which the team competes or is
scheduled to compete during that taxable year;
and
(B) during the taxable year on a date
which does not fall within the foregoing
period (e.g., participation in instructional
leagues, the "All Star Game", or promotional
caravans).
This compensation shall include, but is not
limited to, salaries, wages, bonuses as described

in this subpart, and any other type of
compensation paid during the taxable year to a
member of a professional athletic team for
services performed in that year. This compensation
does not include strike benefits, severance pay,
termination pay, contract or option year buy-out
payments, expansion or relocation payments, or any
other payments not related to services performed
for the team.
For purposes of this subparagraph, "bonuses"
included in "total compensation for services
performed as a member of a professional athletic
team" subject to the allocation described in
Section 302(c)(1) are: bonuses earned as a result
of play (i.e., performance bonuses) during the
season, including bonuses paid for championship,
playoff or "bowl" games played by a team, or for
selection to all-star league or other honorary
positions; and bonuses paid for signing a
contract, unless the payment of the signing bonus
is not conditional upon the signee playing any
games for the team or performing any subsequent
services for the team or even making the team, the
signing bonus is payable separately from the
salary and any other compensation, and the signing
bonus is nonrefundable.

(3) Sales factor.
(A) The sales factor is a fraction, the numerator of
which is the total sales of the person in this State during
the taxable year, and the denominator of which is the
total sales of the person everywhere during the taxable
year.
(B) Sales of tangible personal property are in this
State if:
(i) The property is delivered or shipped to a
purchaser, other than the United States government,
within this State regardless of the f. o. b. point or
other conditions of the sale; or
(ii) The property is shipped from an office,
store, warehouse, factory or other place of storage in
this State and either the purchaser is the United
States government or the person is not taxable in the
state of the purchaser; provided, however, that
premises owned or leased by a person who has
independently contracted with the seller for the
printing of newspapers, periodicals or books shall not
be deemed to be an office, store, warehouse, factory
or other place of storage for purposes of this
Section. Sales of tangible personal property are not
in this State if the seller and purchaser would be
members of the same unitary business group but for the
fact that either the seller or purchaser is a person

with 80% or more of total business activity outside of
the United States and the property is purchased for
resale.
(B-1) Patents, copyrights, trademarks, and similar
items of intangible personal property.
(i) Gross receipts from the licensing, sale, or
other disposition of a patent, copyright, trademark,
or similar item of intangible personal property, other
than gross receipts governed by paragraph (B-7) of
this item (3), are in this State to the extent the item
is utilized in this State during the year the gross
receipts are included in gross income.
(ii) Place of utilization.
(I) A patent is utilized in a state to the
extent that it is employed in production,
fabrication, manufacturing, or other processing in
the state or to the extent that a patented product
is produced in the state. If a patent is utilized
in more than one state, the extent to which it is
utilized in any one state shall be a fraction
equal to the gross receipts of the licensee or
purchaser from sales or leases of items produced,
fabricated, manufactured, or processed within that
state using the patent and of patented items
produced within that state, divided by the total
of such gross receipts for all states in which the

patent is utilized.
(II) A copyright is utilized in a state to the
extent that printing or other publication
originates in the state. If a copyright is
utilized in more than one state, the extent to
which it is utilized in any one state shall be a
fraction equal to the gross receipts from sales or
licenses of materials printed or published in that
state divided by the total of such gross receipts
for all states in which the copyright is utilized.
(III) Trademarks and other items of intangible
personal property governed by this paragraph (B-1)
are utilized in the state in which the commercial
domicile of the licensee or purchaser is located.
(iii) If the state of utilization of an item of
property governed by this paragraph (B-1) cannot be
determined from the taxpayer's books and records or
from the books and records of any person related to the
taxpayer within the meaning of Section 267(b) of the
Internal Revenue Code, 26 U.S.C. 267, the gross
receipts attributable to that item shall be excluded
from both the numerator and the denominator of the
sales factor.
(B-2) Gross receipts from the license, sale, or other
disposition of patents, copyrights, trademarks, and
similar items of intangible personal property, other than

gross receipts governed by paragraph (B-7) of this item
(3), may be included in the numerator or denominator of
the sales factor only if gross receipts from licenses,
sales, or other disposition of such items comprise more
than 50% of the taxpayer's total gross receipts included
in gross income during the tax year and during each of the
2 immediately preceding tax years; provided that, when a
taxpayer is a member of a unitary business group, such
determination shall be made on the basis of the gross
receipts of the entire unitary business group.
(B-5) For taxable years ending on or after December
31, 2008, except as provided in subsections (ii) through
(vii), receipts from the sale of telecommunications
service or mobile telecommunications service are in this
State if the customer's service address is in this State.
(i) For purposes of this subparagraph (B-5), the
following terms have the following meanings:
"Ancillary services" means services that are
associated with or incidental to the provision of
"telecommunications services", including, but not
limited to, "detailed telecommunications billing",
"directory assistance", "vertical service", and "voice
mail services".
"Air-to-Ground Radiotelephone service" means a
radio service, as that term is defined in 47 CFR 22.99,
in which common carriers are authorized to offer and

provide radio telecommunications service for hire to
subscribers in aircraft.
"Call-by-call Basis" means any method of charging
for telecommunications services where the price is
measured by individual calls.
"Communications Channel" means a physical or
virtual path of communications over which signals are
transmitted between or among customer channel
termination points.
"Conference bridging service" means an "ancillary
service" that links two or more participants of an
audio or video conference call and may include the
provision of a telephone number. "Conference bridging
service" does not include the "telecommunications
services" used to reach the conference bridge.
"Customer Channel Termination Point" means the
location where the customer either inputs or receives
the communications.
"Detailed telecommunications billing service"
means an "ancillary service" of separately stating
information pertaining to individual calls on a
customer's billing statement.
"Directory assistance" means an "ancillary
service" of providing telephone number information,
and/or address information.
"Home service provider" means the facilities based

carrier or reseller with which the customer contracts
for the provision of mobile telecommunications
services.
"Mobile telecommunications service" means
commercial mobile radio service, as defined in Section
20.3 of Title 47 of the Code of Federal Regulations as
in effect on June 1, 1999.
"Place of primary use" means the street address
representative of where the customer's use of the
telecommunications service primarily occurs, which
must be the residential street address or the primary
business street address of the customer. In the case
of mobile telecommunications services, "place of
primary use" must be within the licensed service area
of the home service provider.
"Post-paid telecommunication service" means the
telecommunications service obtained by making a
payment on a call-by-call basis either through the use
of a credit card or payment mechanism such as a bank
card, travel card, credit card, or debit card, or by
charge made to a telephone number which is not
associated with the origination or termination of the
telecommunications service. A post-paid calling
service includes telecommunications service, except a
prepaid wireless calling service, that would be a
prepaid calling service except it is not exclusively a

telecommunication service.
"Prepaid telecommunication service" means the
right to access exclusively telecommunications
services, which must be paid for in advance and which
enables the origination of calls using an access
number or authorization code, whether manually or
electronically dialed, and that is sold in
predetermined units or dollars of which the number
declines with use in a known amount.
"Prepaid Mobile telecommunication service" means a
telecommunications service that provides the right to
utilize mobile wireless service as well as other
non-telecommunication services, including, but not
limited to, ancillary services, which must be paid for
in advance that is sold in predetermined units or
dollars of which the number declines with use in a
known amount.
"Private communication service" means a
telecommunication service that entitles the customer
to exclusive or priority use of a communications
channel or group of channels between or among
termination points, regardless of the manner in which
such channel or channels are connected, and includes
switching capacity, extension lines, stations, and any
other associated services that are provided in
connection with the use of such channel or channels.

"Service address" means:
(a) The location of the telecommunications
equipment to which a customer's call is charged
and from which the call originates or terminates,
regardless of where the call is billed or paid;
(b) If the location in line (a) is not known,
service address means the origination point of the
signal of the telecommunications services first
identified by either the seller's
telecommunications system or in information
received by the seller from its service provider
where the system used to transport such signals is
not that of the seller; and
(c) If the locations in line (a) and line (b)
are not known, the service address means the
location of the customer's place of primary use.
"Telecommunications service" means the electronic
transmission, conveyance, or routing of voice, data,
audio, video, or any other information or signals to a
point, or between or among points. The term
"telecommunications service" includes such
transmission, conveyance, or routing in which computer
processing applications are used to act on the form,
code or protocol of the content for purposes of
transmission, conveyance or routing without regard to
whether such service is referred to as voice over

Internet protocol services or is classified by the
Federal Communications Commission as enhanced or value
added. "Telecommunications service" does not include:
(a) Data processing and information services
that allow data to be generated, acquired, stored,
processed, or retrieved and delivered by an
electronic transmission to a purchaser when such
purchaser's primary purpose for the underlying
transaction is the processed data or information;
(b) Installation or maintenance of wiring or
equipment on a customer's premises;
(c) Tangible personal property;
(d) Advertising, including, but not limited
to, directory advertising;
(e) Billing and collection services provided
to third parties;
(f) Internet access service;
(g) Radio and television audio and video
programming services, regardless of the medium,
including the furnishing of transmission,
conveyance and routing of such services by the
programming service provider. Radio and television
audio and video programming services shall
include, but not be limited to, cable service as
defined in 47 USC 522(6) and audio and video
programming services delivered by commercial

mobile radio service providers, as defined in 47
CFR 20.3;
(h) "Ancillary services"; or
(i) Digital products "delivered
electronically", including, but not limited to,
software, music, video, reading materials or ring
tones.
"Vertical service" means an "ancillary service"
that is offered in connection with one or more
"telecommunications services", which offers advanced
calling features that allow customers to identify
callers and to manage multiple calls and call
connections, including "conference bridging services".
"Voice mail service" means an "ancillary service"
that enables the customer to store, send or receive
recorded messages. "Voice mail service" does not
include any "vertical services" that the customer may
be required to have in order to utilize the "voice mail
service".
(ii) Receipts from the sale of telecommunications
service sold on an individual call-by-call basis are
in this State if either of the following applies:
(a) The call both originates and terminates in
this State.
(b) The call either originates or terminates
in this State and the service address is located

in this State.
(iii) Receipts from the sale of postpaid
telecommunications service at retail are in this State
if the origination point of the telecommunication
signal, as first identified by the service provider's
telecommunication system or as identified by
information received by the seller from its service
provider if the system used to transport
telecommunication signals is not the seller's, is
located in this State.
(iv) Receipts from the sale of prepaid
telecommunications service or prepaid mobile
telecommunications service at retail are in this State
if the purchaser obtains the prepaid card or similar
means of conveyance at a location in this State.
Receipts from recharging a prepaid telecommunications
service or mobile telecommunications service is in
this State if the purchaser's billing information
indicates a location in this State.
(v) Receipts from the sale of private
communication services are in this State as follows:
(a) 100% of receipts from charges imposed at
each channel termination point in this State.
(b) 100% of receipts from charges for the
total channel mileage between each channel
termination point in this State.

(c) 50% of the total receipts from charges for
service segments when those segments are between 2
customer channel termination points, 1 of which is
located in this State and the other is located
outside of this State, which segments are
separately charged.
(d) The receipts from charges for service
segments with a channel termination point located
in this State and in two or more other states, and
which segments are not separately billed, are in
this State based on a percentage determined by
dividing the number of customer channel
termination points in this State by the total
number of customer channel termination points.
(vi) Receipts from charges for ancillary services
for telecommunications service sold to customers at
retail are in this State if the customer's primary
place of use of telecommunications services associated
with those ancillary services is in this State. If the
seller of those ancillary services cannot determine
where the associated telecommunications are located,
then the ancillary services shall be based on the
location of the purchaser.
(vii) Receipts to access a carrier's network or
from the sale of telecommunication services or
ancillary services for resale are in this State as

follows:
(a) 100% of the receipts from access fees
attributable to intrastate telecommunications
service that both originates and terminates in
this State.
(b) 50% of the receipts from access fees
attributable to interstate telecommunications
service if the interstate call either originates
or terminates in this State.
(c) 100% of the receipts from interstate end
user access line charges, if the customer's
service address is in this State. As used in this
subdivision, "interstate end user access line
charges" includes, but is not limited to, the
surcharge approved by the federal communications
commission and levied pursuant to 47 CFR 69.
(d) Gross receipts from sales of
telecommunication services or from ancillary
services for telecommunications services sold to
other telecommunication service providers for
resale shall be sourced to this State using the
apportionment concepts used for non-resale
receipts of telecommunications services if the
information is readily available to make that
determination. If the information is not readily
available, then the taxpayer may use any other

reasonable and consistent method.
(B-7) For taxable years ending on or after December
31, 2008, receipts from the sale of broadcasting services
are in this State if the broadcasting services are
received in this State. For purposes of this paragraph
(B-7), the following terms have the following meanings:
"Advertising revenue" means consideration received
by the taxpayer in exchange for broadcasting services
or allowing the broadcasting of commercials or
announcements in connection with the broadcasting of
film or radio programming, from sponsorships of the
programming, or from product placements in the
programming.
"Audience factor" means the ratio that the
audience or subscribers located in this State of a
station, a network, or a cable system bears to the
total audience or total subscribers for that station,
network, or cable system. The audience factor for film
or radio programming shall be determined by reference
to the books and records of the taxpayer or by
reference to published rating statistics provided the
method used by the taxpayer is consistently used from
year to year for this purpose and fairly represents
the taxpayer's activity in this State.
"Broadcast" or "broadcasting" or "broadcasting
services" means the transmission or provision of film

or radio programming, whether through the public
airwaves, by cable, by direct or indirect satellite
transmission, or by any other means of communication,
either through a station, a network, or a cable
system.
"Film" or "film programming" means the broadcast
on television of any and all performances, events, or
productions, including, but not limited to, news,
sporting events, plays, stories, or other literary,
commercial, educational, or artistic works, either
live or through the use of video tape, disc, or any
other type of format or medium. Each episode of a
series of films produced for television shall
constitute separate "film" notwithstanding that the
series relates to the same principal subject and is
produced during one or more tax periods.
"Radio" or "radio programming" means the broadcast
on radio of any and all performances, events, or
productions, including, but not limited to, news,
sporting events, plays, stories, or other literary,
commercial, educational, or artistic works, either
live or through the use of an audio tape, disc, or any
other format or medium. Each episode in a series of
radio programming produced for radio broadcast shall
constitute a separate "radio programming"
notwithstanding that the series relates to the same

principal subject and is produced during one or more
tax periods.
(i) In the case of advertising revenue from
broadcasting, the customer is the advertiser and
the service is received in this State if the
commercial domicile of the advertiser is in this
State.
(ii) In the case where film or radio
programming is broadcast by a station, a network,
or a cable system for a fee or other remuneration
received from the recipient of the broadcast, the
portion of the service that is received in this
State is measured by the portion of the recipients
of the broadcast located in this State.
Accordingly, the fee or other remuneration for
such service that is included in the Illinois
numerator of the sales factor is the total of
those fees or other remuneration received from
recipients in Illinois. For purposes of this
paragraph, a taxpayer may determine the location
of the recipients of its broadcast using the
address of the recipient shown in its contracts
with the recipient or using the billing address of
the recipient in the taxpayer's records.
(iii) In the case where film or radio
programming is broadcast by a station, a network,

or a cable system for a fee or other remuneration
from the person providing the programming, the
portion of the broadcast service that is received
by such station, network, or cable system in this
State is measured by the portion of recipients of
the broadcast located in this State. Accordingly,
the amount of revenue related to such an
arrangement that is included in the Illinois
numerator of the sales factor is the total fee or
other total remuneration from the person providing
the programming related to that broadcast
multiplied by the Illinois audience factor for
that broadcast.
(iv) In the case where film or radio
programming is provided by a taxpayer that is a
network or station to a customer for broadcast in
exchange for a fee or other remuneration from that
customer the broadcasting service is received at
the location of the office of the customer from
which the services were ordered in the regular
course of the customer's trade or business.
Accordingly, in such a case the revenue derived by
the taxpayer that is included in the taxpayer's
Illinois numerator of the sales factor is the
revenue from such customers who receive the
broadcasting service in Illinois.

(v) In the case where film or radio
programming is provided by a taxpayer that is not
a network or station to another person for
broadcasting in exchange for a fee or other
remuneration from that person, the broadcasting
service is received at the location of the office
of the customer from which the services were
ordered in the regular course of the customer's
trade or business. Accordingly, in such a case the
revenue derived by the taxpayer that is included
in the taxpayer's Illinois numerator of the sales
factor is the revenue from such customers who
receive the broadcasting service in Illinois.
(B-8) Gross receipts from winnings under the Illinois
Lottery Law from the assignment of a prize under Section
13.1 of the Illinois Lottery Law are received in this
State. This paragraph (B-8) applies only to taxable years
ending on or after December 31, 2013.
(B-9) For taxable years ending on or after December
31, 2019, gross receipts from winnings from pari-mutuel
wagering conducted at a wagering facility licensed under
the Illinois Horse Racing Act of 1975 or from winnings
from gambling games conducted on a riverboat or in a
casino or organization gaming facility licensed under the
Illinois Gambling Act are in this State.
(B-10) For taxable years ending on or after December

31, 2021, gross receipts from winnings from sports
wagering conducted in accordance with the Sports Wagering
Act are in this State.
(C) For taxable years ending before December 31, 2008,
sales, other than sales governed by paragraphs (B), (B-1),
(B-2), and (B-8) are in this State if:
(i) The income-producing activity is performed in
this State; or
(ii) The income-producing activity is performed
both within and without this State and a greater
proportion of the income-producing activity is
performed within this State than without this State,
based on performance costs.
(C-5) For taxable years ending on or after December
31, 2008, sales, other than sales governed by paragraphs
(B), (B-1), (B-2), (B-5), and (B-7), are in this State if
any of the following criteria are met:
(i) Sales from the sale or lease of real property
are in this State if the property is located in this
State.
(ii) Sales from the lease or rental of tangible
personal property are in this State if the property is
located in this State during the rental period. Sales
from the lease or rental of tangible personal property
that is characteristically moving property, including,
but not limited to, motor vehicles, rolling stock,

aircraft, vessels, or mobile equipment are in this
State to the extent that the property is used in this
State.
(iii) In the case of interest, net gains (but not
less than zero) and other items of income from
intangible personal property, the sale is in this
State if:
(a) in the case of a taxpayer who is a dealer
in the item of intangible personal property within
the meaning of Section 475 of the Internal Revenue
Code, the income or gain is received from a
customer in this State. For purposes of this
subparagraph, a customer is in this State if the
customer is an individual, trust or estate who is
a resident of this State and, for all other
customers, if the customer's commercial domicile
is in this State. Unless the dealer has actual
knowledge of the residence or commercial domicile
of a customer during a taxable year, the customer
shall be deemed to be a customer in this State if
the billing address of the customer, as shown in
the records of the dealer, is in this State; or
(b) in all other cases, if the
income-producing activity of the taxpayer is
performed in this State or, if the
income-producing activity of the taxpayer is

performed both within and without this State, if a
greater proportion of the income-producing
activity of the taxpayer is performed within this
State than in any other state, based on
performance costs.
(iv) Sales of services are in this State if the
services are received in this State. For the purposes
of this section, gross receipts from the performance
of services provided to a corporation, partnership, or
trust may only be attributed to a state where that
corporation, partnership, or trust has a fixed place
of business. If the state where the services are
received is not readily determinable or is a state
where the corporation, partnership, or trust receiving
the service does not have a fixed place of business,
the services shall be deemed to be received at the
location of the office of the customer from which the
services were ordered in the regular course of the
customer's trade or business. If the ordering office
cannot be determined, the services shall be deemed to
be received at the office of the customer to which the
services are billed. If the taxpayer is not taxable in
the state in which the services are received, the sale
must be excluded from both the numerator and the
denominator of the sales factor. The Department shall
adopt rules prescribing where specific types of

service are received, including, but not limited to,
publishing, and utility service.
(D) For taxable years ending on or after December 31,
1995, the following items of income shall not be included
in the numerator or denominator of the sales factor:
dividends; amounts included under Section 78 of the
Internal Revenue Code; and Subpart F income as defined in
Section 952 of the Internal Revenue Code. No inference
shall be drawn from the enactment of this paragraph (D) in
construing this Section for taxable years ending before
December 31, 1995.
(E) Paragraphs (B-1) and (B-2) shall apply to tax
years ending on or after December 31, 1999, provided that
a taxpayer may elect to apply the provisions of these
paragraphs to prior tax years. Such election shall be made
in the form and manner prescribed by the Department, shall
be irrevocable, and shall apply to all tax years; provided
that, if a taxpayer's Illinois income tax liability for
any tax year, as assessed under Section 903 prior to
January 1, 1999, was computed in a manner contrary to the
provisions of paragraphs (B-1) or (B-2), no refund shall
be payable to the taxpayer for that tax year to the extent
such refund is the result of applying the provisions of
paragraph (B-1) or (B-2) retroactively. In the case of a
unitary business group, such election shall apply to all
members of such group for every tax year such group is in

existence, but shall not apply to any taxpayer for any
period during which that taxpayer is not a member of such
group.
(b) Insurance companies.
(1) In general. Except as otherwise provided by
paragraph (2), business income of an insurance company for
a taxable year shall be apportioned to this State by
multiplying such income by a fraction, the numerator of
which is the direct premiums written for insurance upon
property or risk in this State, and the denominator of
which is the direct premiums written for insurance upon
property or risk everywhere. For purposes of this
subsection, the term "direct premiums written" means the
total amount of direct premiums written, assessments and
annuity considerations as reported for the taxable year on
the annual statement filed by the company with the
Illinois Director of Insurance in the form approved by the
National Convention of Insurance Commissioners or such
other form as may be prescribed in lieu thereof.
(2) Reinsurance. If the principal source of premiums
written by an insurance company consists of premiums for
reinsurance accepted by it, the business income of such
company shall be apportioned to this State by multiplying
such income by a fraction, the numerator of which is the
sum of (i) direct premiums written for insurance upon
property or risk in this State, plus (ii) premiums written

for reinsurance accepted in respect of property or risk in
this State, and the denominator of which is the sum of
(iii) direct premiums written for insurance upon property
or risk everywhere, plus (iv) premiums written for
reinsurance accepted in respect of property or risk
everywhere. For purposes of this paragraph, premiums
written for reinsurance accepted in respect of property or
risk in this State, whether or not otherwise determinable,
may, at the election of the company, be determined on the
basis of the proportion which premiums written for
reinsurance accepted from companies commercially domiciled
in Illinois bears to premiums written for reinsurance
accepted from all sources, or, alternatively, in the
proportion which the sum of the direct premiums written
for insurance upon property or risk in this State by each
ceding company from which reinsurance is accepted bears to
the sum of the total direct premiums written by each such
ceding company for the taxable year. The election made by
a company under this paragraph for its first taxable year
ending on or after December 31, 2011, shall be binding for
that company for that taxable year and for all subsequent
taxable years, and may be altered only with the written
permission of the Department, which shall not be
unreasonably withheld.
(c) Financial organizations.
(1) In general. For taxable years ending before

December 31, 2008, business income of a financial
organization shall be apportioned to this State by
multiplying such income by a fraction, the numerator of
which is its business income from sources within this
State, and the denominator of which is its business income
from all sources. For the purposes of this subsection, the
business income of a financial organization from sources
within this State is the sum of the amounts referred to in
subparagraphs (A) through (E) following, but excluding the
adjusted income of an international banking facility as
determined in paragraph (2):
(A) Fees, commissions or other compensation for
financial services rendered within this State;
(B) Gross profits from trading in stocks, bonds or
other securities managed within this State;
(C) Dividends, and interest from Illinois
customers, which are received within this State;
(D) Interest charged to customers at places of
business maintained within this State for carrying
debit balances of margin accounts, without deduction
of any costs incurred in carrying such accounts; and
(E) Any other gross income resulting from the
operation as a financial organization within this
State.
In computing the amounts referred to in paragraphs (A)
through (E) of this subsection, any amount received by a

member of an affiliated group (determined under Section
1504(a) of the Internal Revenue Code but without reference
to whether any such corporation is an "includible
corporation" under Section 1504(b) of the Internal Revenue
Code) from another member of such group shall be included
only to the extent such amount exceeds expenses of the
recipient directly related thereto.
(2) International Banking Facility. For taxable years
ending before December 31, 2008:
(A) Adjusted Income. The adjusted income of an
international banking facility is its income reduced
by the amount of the floor amount.
(B) Floor Amount. The floor amount shall be the
amount, if any, determined by multiplying the income
of the international banking facility by a fraction,
not greater than one, which is determined as follows:
(i) The numerator shall be:
The average aggregate, determined on a
quarterly basis, of the financial organization's
loans to banks in foreign countries, to foreign
domiciled borrowers (except where secured
primarily by real estate) and to foreign
governments and other foreign official
institutions, as reported for its branches,
agencies and offices within the state on its
"Consolidated Report of Condition", Schedule A,

Lines 2.c., 5.b., and 7.a., which was filed with
the Federal Deposit Insurance Corporation and
other regulatory authorities, for the year 1980,
minus
The average aggregate, determined on a
quarterly basis, of such loans (other than loans
of an international banking facility), as reported
by the financial institution for its branches,
agencies and offices within the state, on the
corresponding Schedule and lines of the
Consolidated Report of Condition for the current
taxable year, provided, however, that in no case
shall the amount determined in this clause (the
subtrahend) exceed the amount determined in the
preceding clause (the minuend); and
(ii) the denominator shall be the average
aggregate, determined on a quarterly basis, of the
international banking facility's loans to banks in
foreign countries, to foreign domiciled borrowers
(except where secured primarily by real estate)
and to foreign governments and other foreign
official institutions, which were recorded in its
financial accounts for the current taxable year.
(C) Change to Consolidated Report of Condition and
in Qualification. In the event the Consolidated Report
of Condition which is filed with the Federal Deposit

Insurance Corporation and other regulatory authorities
is altered so that the information required for
determining the floor amount is not found on Schedule
A, lines 2.c., 5.b. and 7.a., the financial
institution shall notify the Department and the
Department may, by regulations or otherwise, prescribe
or authorize the use of an alternative source for such
information. The financial institution shall also
notify the Department should its international banking
facility fail to qualify as such, in whole or in part,
or should there be any amendment or change to the
Consolidated Report of Condition, as originally filed,
to the extent such amendment or change alters the
information used in determining the floor amount.
(3) For taxable years ending on or after December 31,
2008, the business income of a financial organization
shall be apportioned to this State by multiplying such
income by a fraction, the numerator of which is its gross
receipts from sources in this State or otherwise
attributable to this State's marketplace and the
denominator of which is its gross receipts everywhere
during the taxable year. "Gross receipts" for purposes of
this subparagraph (3) means gross income, including net
taxable gain on disposition of assets, including
securities and money market instruments, when derived from
transactions and activities in the regular course of the

financial organization's trade or business. The following
examples are illustrative:
(i) Receipts from the lease or rental of real or
tangible personal property are in this State if the
property is located in this State during the rental
period. Receipts from the lease or rental of tangible
personal property that is characteristically moving
property, including, but not limited to, motor
vehicles, rolling stock, aircraft, vessels, or mobile
equipment are from sources in this State to the extent
that the property is used in this State.
(ii) Interest income, commissions, fees, gains on
disposition, and other receipts from assets in the
nature of loans that are secured primarily by real
estate or tangible personal property are from sources
in this State if the security is located in this State.
(iii) Interest income, commissions, fees, gains on
disposition, and other receipts from consumer loans
that are not secured by real or tangible personal
property are from sources in this State if the debtor
is a resident of this State.
(iv) Interest income, commissions, fees, gains on
disposition, and other receipts from commercial loans
and installment obligations that are not secured by
real or tangible personal property are from sources in
this State if the proceeds of the loan are to be

applied in this State. If it cannot be determined
where the funds are to be applied, the income and
receipts are from sources in this State if the office
of the borrower from which the loan was negotiated in
the regular course of business is located in this
State. If the location of this office cannot be
determined, the income and receipts shall be excluded
from the numerator and denominator of the sales
factor.
(v) Interest income, fees, gains on disposition,
service charges, merchant discount income, and other
receipts from credit card receivables are from sources
in this State if the card charges are regularly billed
to a customer in this State.
(vi) Receipts from the performance of services,
including, but not limited to, fiduciary, advisory,
and brokerage services, are in this State if the
services are received in this State within the meaning
of subparagraph (a)(3)(C-5)(iv) of this Section.
(vii) Receipts from the issuance of travelers
checks and money orders are from sources in this State
if the checks and money orders are issued from a
location within this State.
(viii) Receipts from investment assets and
activities and trading assets and activities are
included in the receipts factor as follows:

(1) Interest, dividends, net gains (but not
less than zero) and other income from investment
assets and activities from trading assets and
activities shall be included in the receipts
factor. Investment assets and activities and
trading assets and activities include, but are not
limited to: investment securities; trading account
assets; federal funds; securities purchased and
sold under agreements to resell or repurchase;
options; futures contracts; forward contracts;
notional principal contracts such as swaps;
equities; and foreign currency transactions. With
respect to the investment and trading assets and
activities described in subparagraphs (A) and (B)
of this paragraph, the receipts factor shall
include the amounts described in such
subparagraphs.
(A) The receipts factor shall include the
amount by which interest from federal funds
sold and securities purchased under resale
agreements exceeds interest expense on federal
funds purchased and securities sold under
repurchase agreements.
(B) The receipts factor shall include the
amount by which interest, dividends, gains and
other income from trading assets and

activities, including, but not limited to,
assets and activities in the matched book, in
the arbitrage book, and foreign currency
transactions, exceed amounts paid in lieu of
interest, amounts paid in lieu of dividends,
and losses from such assets and activities.
(2) The numerator of the receipts factor
includes interest, dividends, net gains (but not
less than zero), and other income from investment
assets and activities and from trading assets and
activities described in paragraph (1) of this
subsection that are attributable to this State.
(A) The amount of interest, dividends, net
gains (but not less than zero), and other
income from investment assets and activities
in the investment account to be attributed to
this State and included in the numerator is
determined by multiplying all such income from
such assets and activities by a fraction, the
numerator of which is the gross income from
such assets and activities which are properly
assigned to a fixed place of business of the
taxpayer within this State and the denominator
of which is the gross income from all such
assets and activities.
(B) The amount of interest from federal

funds sold and purchased and from securities
purchased under resale agreements and
securities sold under repurchase agreements
attributable to this State and included in the
numerator is determined by multiplying the
amount described in subparagraph (A) of
paragraph (1) of this subsection from such
funds and such securities by a fraction, the
numerator of which is the gross income from
such funds and such securities which are
properly assigned to a fixed place of business
of the taxpayer within this State and the
denominator of which is the gross income from
all such funds and such securities.
(C) The amount of interest, dividends,
gains, and other income from trading assets
and activities, including, but not limited to,
assets and activities in the matched book, in
the arbitrage book and foreign currency
transactions (but excluding amounts described
in subparagraphs (A) or (B) of this
paragraph), attributable to this State and
included in the numerator is determined by
multiplying the amount described in
subparagraph (B) of paragraph (1) of this
subsection by a fraction, the numerator of

which is the gross income from such trading
assets and activities which are properly
assigned to a fixed place of business of the
taxpayer within this State and the denominator
of which is the gross income from all such
assets and activities.
(D) Properly assigned, for purposes of
this paragraph (2) of this subsection, means
the investment or trading asset or activity is
assigned to the fixed place of business with
which it has a preponderance of substantive
contacts. An investment or trading asset or
activity assigned by the taxpayer to a fixed
place of business without the State shall be
presumed to have been properly assigned if:
(i) the taxpayer has assigned, in the
regular course of its business, such asset
or activity on its records to a fixed
place of business consistent with federal
or state regulatory requirements;
(ii) such assignment on its records is
based upon substantive contacts of the
asset or activity to such fixed place of
business; and
(iii) the taxpayer uses such records
reflecting assignment of such assets or

activities for the filing of all state and
local tax returns for which an assignment
of such assets or activities to a fixed
place of business is required.
(E) The presumption of proper assignment
of an investment or trading asset or activity
provided in subparagraph (D) of paragraph (2)
of this subsection may be rebutted upon a
showing by the Department, supported by a
preponderance of the evidence, that the
preponderance of substantive contacts
regarding such asset or activity did not occur
at the fixed place of business to which it was
assigned on the taxpayer's records. If the
fixed place of business that has a
preponderance of substantive contacts cannot
be determined for an investment or trading
asset or activity to which the presumption in
subparagraph (D) of paragraph (2) of this
subsection does not apply or with respect to
which that presumption has been rebutted, that
asset or activity is properly assigned to the
state in which the taxpayer's commercial
domicile is located. For purposes of this
subparagraph (E), it shall be presumed,
subject to rebuttal, that taxpayer's

commercial domicile is in the state of the
United States or the District of Columbia to
which the greatest number of employees are
regularly connected with the management of the
investment or trading income or out of which
they are working, irrespective of where the
services of such employees are performed, as
of the last day of the taxable year.
(4) (Blank).
(5) (Blank).
(c-1) Federally regulated exchanges. For taxable years
ending on or after December 31, 2012, business income of a
federally regulated exchange shall, at the option of the
federally regulated exchange, be apportioned to this State by
multiplying such income by a fraction, the numerator of which
is its business income from sources within this State, and the
denominator of which is its business income from all sources.
For purposes of this subsection, the business income within
this State of a federally regulated exchange is the sum of the
following:
(1) Receipts attributable to transactions executed on
a physical trading floor if that physical trading floor is
located in this State.
(2) Receipts attributable to all other matching,
execution, or clearing transactions, including without
limitation receipts from the provision of matching,

execution, or clearing services to another entity,
multiplied by (i) for taxable years ending on or after
December 31, 2012 but before December 31, 2013, 63.77%;
and (ii) for taxable years ending on or after December 31,
2013, 27.54%.
(3) All other receipts not governed by subparagraphs
(1) or (2) of this subsection (c-1), to the extent the
receipts would be characterized as "sales in this State"
under item (3) of subsection (a) of this Section.
"Federally regulated exchange" means (i) a "registered
entity" within the meaning of 7 U.S.C. Section 1a(40)(A), (B),
or (C), (ii) an "exchange" or "clearing agency" within the
meaning of 15 U.S.C. Section 78c (a)(1) or (23), (iii) any such
entities regulated under any successor regulatory structure to
the foregoing, and (iv) all taxpayers who are members of the
same unitary business group as a federally regulated exchange,
determined without regard to the prohibition in Section
1501(a)(27) of this Act against including in a unitary
business group taxpayers who are ordinarily required to
apportion business income under different subsections of this
Section; provided that this subparagraph (iv) shall apply only
if 50% or more of the business receipts of the unitary business
group determined by application of this subparagraph (iv) for
the taxable year are attributable to the matching, execution,
or clearing of transactions conducted by an entity described
in subparagraph (i), (ii), or (iii) of this paragraph.

In no event shall the Illinois apportionment percentage
computed in accordance with this subsection (c-1) for any
taxpayer for any tax year be less than the Illinois
apportionment percentage computed under this subsection (c-1)
for that taxpayer for the first full tax year ending on or
after December 31, 2013 for which this subsection (c-1)
applied to the taxpayer.
(d) Transportation services. For taxable years ending
before December 31, 2008, business income derived from
furnishing transportation services shall be apportioned to
this State in accordance with paragraphs (1) and (2):
(1) Such business income (other than that derived from
transportation by pipeline) shall be apportioned to this
State by multiplying such income by a fraction, the
numerator of which is the revenue miles of the person in
this State, and the denominator of which is the revenue
miles of the person everywhere. For purposes of this
paragraph, a revenue mile is the transportation of 1
passenger or 1 net ton of freight the distance of 1 mile
for a consideration. Where a person is engaged in the
transportation of both passengers and freight, the
fraction above referred to shall be determined by means of
an average of the passenger revenue mile fraction and the
freight revenue mile fraction, weighted to reflect the
person's
(A) relative railway operating income from total

passenger and total freight service, as reported to
the Interstate Commerce Commission, in the case of
transportation by railroad, and
(B) relative gross receipts from passenger and
freight transportation, in case of transportation
other than by railroad.
(2) Such business income derived from transportation
by pipeline shall be apportioned to this State by
multiplying such income by a fraction, the numerator of
which is the revenue miles of the person in this State, and
the denominator of which is the revenue miles of the
person everywhere. For the purposes of this paragraph, a
revenue mile is the transportation by pipeline of 1 barrel
of oil, 1,000 cubic feet of gas, or of any specified
quantity of any other substance, the distance of 1 mile
for a consideration.
(3) For taxable years ending on or after December 31,
2008, business income derived from providing
transportation services other than airline services shall
be apportioned to this State by using a fraction, (a) the
numerator of which shall be (i) all receipts from any
movement or shipment of people, goods, mail, oil, gas, or
any other substance (other than by airline) that both
originates and terminates in this State, plus (ii) that
portion of the person's gross receipts from movements or
shipments of people, goods, mail, oil, gas, or any other

substance (other than by airline) that originates in one
state or jurisdiction and terminates in another state or
jurisdiction, that is determined by the ratio that the
miles traveled in this State bears to total miles
everywhere and (b) the denominator of which shall be all
revenue derived from the movement or shipment of people,
goods, mail, oil, gas, or any other substance (other than
by airline). Where a taxpayer is engaged in the
transportation of both passengers and freight, the
fraction above referred to shall first be determined
separately for passenger miles and freight miles. Then an
average of the passenger miles fraction and the freight
miles fraction shall be weighted to reflect the
taxpayer's:
(A) relative railway operating income from total
passenger and total freight service, as reported to
the Surface Transportation Board, in the case of
transportation by railroad; and
(B) relative gross receipts from passenger and
freight transportation, in case of transportation
other than by railroad.
(4) For taxable years ending on or after December 31,
2008, business income derived from furnishing airline
transportation services shall be apportioned to this State
by multiplying such income by a fraction, the numerator of
which is the revenue miles of the person in this State, and

the denominator of which is the revenue miles of the
person everywhere. For purposes of this paragraph, a
revenue mile is the transportation of one passenger or one
net ton of freight the distance of one mile for a
consideration. If a person is engaged in the
transportation of both passengers and freight, the
fraction above referred to shall be determined by means of
an average of the passenger revenue mile fraction and the
freight revenue mile fraction, weighted to reflect the
person's relative gross receipts from passenger and
freight airline transportation.
(e) Combined apportionment. Where 2 or more persons are
engaged in a unitary business as described in subsection
(a)(27) of Section 1501, a part of which is conducted in this
State by one or more members of the group, the business income
attributable to this State by any such member or members shall
be apportioned by means of the combined apportionment method.
(f) Alternative allocation. If the allocation and
apportionment provisions of subsections (a) through (e) and of
subsection (h) do not, for taxable years ending before
December 31, 2008, fairly represent the extent of a person's
business activity in this State, or, for taxable years ending
on or after December 31, 2008, fairly represent the market for
the person's goods, services, or other sources of business
income, the person may petition for, or the Director may,
without a petition, permit or require, in respect of all or any

part of the person's business activity, if reasonable:
(1) Separate accounting;
(2) The exclusion of any one or more factors;
(3) The inclusion of one or more additional factors
which will fairly represent the person's business
activities or market in this State; or
(4) The employment of any other method to effectuate
an equitable allocation and apportionment of the person's
business income.
(g) Cross reference. For allocation of business income by
residents, see Section 301(a).
(h) For tax years ending on or after December 31, 1998, the
apportionment factor of persons who apportion their business
income to this State under subsection (a) shall be equal to:
(1) for tax years ending on or after December 31, 1998
and before December 31, 1999, 16 2/3% of the property
factor plus 16 2/3% of the payroll factor plus 66 2/3% of
the sales factor;
(2) for tax years ending on or after December 31, 1999
and before December 31, 2000, 8 1/3% of the property
factor plus 8 1/3% of the payroll factor plus 83 1/3% of
the sales factor;
(3) for tax years ending on or after December 31,
2000, the sales factor.
If, in any tax year ending on or after December 31, 1998 and
before December 31, 2000, the denominator of the payroll,

property, or sales factor is zero, the apportionment factor
computed in paragraph (1) or (2) of this subsection for that
year shall be divided by an amount equal to 100% minus the
percentage weight given to each factor whose denominator is
equal to zero.
(Source: P.A. 100-201, eff. 8-18-17; 101-31, eff. 6-28-19;
101-585, eff. 8-26-19; revised 9-12-19.)
(35 ILCS 5/710) (from Ch. 120, par. 7-710)
Sec. 710. Withholding from lottery, wagering, and gambling
winnings.
(a) In general.
(1) Any person making a payment to a resident or
nonresident of winnings under the Illinois Lottery Law and
not required to withhold Illinois income tax from such
payment under Subsection (b) of Section 701 of this Act
because those winnings are not subject to Federal income
tax withholding, must withhold Illinois income tax from
such payment at a rate equal to the percentage tax rate for
individuals provided in subsection (b) of Section 201,
provided that withholding is not required if such payment
of winnings is less than $1,000.
(2) In the case of an assignment of a lottery prize
under Section 13.1 of the Illinois Lottery Law, any person
making a payment of the purchase price after December 31,
2013, shall withhold from the amount of each payment at a

rate equal to the percentage tax rate for individuals
provided in subsection (b) of Section 201.
(3) Any person making a payment after December 31,
2019 to a resident or nonresident of winnings from
pari-mutuel wagering conducted at a wagering facility
licensed under the Illinois Horse Racing Act of 1975 or
from gambling games conducted on a riverboat or in a
casino or organization gaming facility licensed under the
Illinois Gambling Act must withhold Illinois income tax
from such payment at a rate equal to the percentage tax
rate for individuals provided in subsection (b) of Section
201, provided that the person making the payment is
required to withhold under Section 3402(q) of the Internal
Revenue Code.
(4) Any person making a payment after December 31,
2021 to a resident or nonresident of winnings from sports
wagering conducted in accordance with the Sports Wagering
Act must withhold Illinois income tax from such payment at
a rate equal to the percentage tax rate for individuals
provided in subsection (b) of Section 201, provided that
the person making the payment is required to withhold
under Section 3402(q) of the Internal Revenue Code.
(b) Credit for taxes withheld. Any amount withheld under
Subsection (a) shall be a credit against the Illinois income
tax liability of the person to whom the payment of winnings was
made for the taxable year in which that person incurred an

Illinois income tax liability with respect to those winnings.
(Source: P.A. 101-31, eff. 6-28-19.)
(35 ILCS 5/902) (from Ch. 120, par. 9-902)
Sec. 902. Notice and Demand.
(a) In general. Except as provided in subsection (b) the
Director shall, as soon as practicable after an amount payable
under this Act is deemed assessed (as provided in Section
903), give notice to each person liable for any unpaid portion
of such assessment, stating the amount unpaid and demanding
payment thereof. In the case of tax deemed assessed with the
filing of a return, the Director shall give notice no later
than 3 years after the date the return was filed. Upon receipt
of any notice and demand there shall be paid at the place and
time stated in such notice the amount stated in such notice.
Such notice shall be left at the dwelling or usual place of
business of such person or shall be sent by mail to the
person's last known address.
(b) Judicial review. In the case of a deficiency deemed
assessed under Section 903(a)(2) after the filing of a
protest, notice and demand shall not be made with respect to
such assessment until all proceedings in court for the review
of such assessment have terminated or the time for the taking
thereof has expired without such proceedings being instituted.
(c) Action for recovery of taxes. At any time that the
Department might commence proceedings for a levy under Section

1109, regardless of whether a notice of lien was filed under
the provisions of Section 1103, it may bring an action in any
court of competent jurisdiction within or without this State
in the name of the people of this State to recover the amount
of any taxes, penalties and interest due and unpaid under this
Act. In such action, the certificate of the Department showing
the amount of the delinquency shall be prima facie evidence of
the correctness of such amount, its assessment and of the
compliance by the Department with all the provisions of this
Act.
(d) Sales or transfers outside the usual course of
business-Report-Payment of Tax - Rights and duties of
purchaser or transferee - penalty. If any taxpayer, outside
the usual course of his business, sells or transfers the major
part of any one or more of (A) the stock of goods which he is
engaged in the business of selling, or (B) the furniture or
fixtures, or (C) the machinery and equipment, or (D) the real
property, of any business that is subject to the provisions of
this Act, the purchaser or transferee of such assets shall, no
later than 10 business days before after the sale or transfer,
file a notice of sale or transfer of business assets with the
Chicago office of the Department disclosing the name and
address of the seller or transferor, the name and address of
the purchaser or transferee, the date of the sale or transfer,
a copy of the sales contract and financing agreements which
shall include a description of the property sold or

transferred, the amount of the purchase price or a statement
of other consideration for the sale or transfer, and the terms
for payment of the purchase price, and such other information
as the Department may reasonably require. If the purchaser or
transferee fails to file the above described notice of sale
with the Department within the prescribed time, the purchaser
or transferee shall be personally liable to the Department for
the amount owed hereunder by the seller or transferor but
unpaid, up to the amount of the reasonable value of the
property acquired by the purchaser or transferee. The
purchaser or transferee shall pay the Department the amount of
tax, penalties, and interest owed by the seller or transferor
under this Act, to the extent they have not been paid by the
seller or transferor. The seller or transferor, or the
purchaser or transferee, at least 10 business days before the
date of the sale or transfer, may notify the Department of the
intended sale or transfer and request the Department to make a
determination as to whether the seller or transferor owes any
tax, penalty or interest due under this Act. The Department
shall take such steps as may be appropriate to comply with such
request.
Any order issued by the Department pursuant to this
Section to withhold from the purchase price shall be issued
within 10 business days after the Department receives
notification of a sale as provided in this Section. The
purchaser or transferee shall withhold such portion of the

purchase price as may be directed by the Department, but not to
exceed a minimum amount varying by type of business, as
determined by the Department pursuant to regulations, plus
twice the outstanding unpaid liabilities and twice the average
liability of preceding filings times the number of unfiled
returns which were not filed when due, to cover the amount of
all tax, penalty, and interest due and unpaid by the seller or
transferor under this Act or, if the payment of money or
property is not involved, shall withhold the performance of
the condition that constitutes the consideration for the sale
or transfer. Within 60 business days after issuance of the
initial order to withhold, the Department shall provide
written notice to the purchaser or transferee of the actual
amount of all taxes, penalties and interest then due and
whether or not additional amounts may become due as a result of
unpaid taxes required to be withheld by an employer, returns
which were not filed when due, pending assessments and audits
not completed. The purchaser or transferee shall continue to
withhold the amount directed to be withheld by the initial
order or such lesser amount as is specified by the final
withholding order or to withhold the performance of the
condition which constitutes the consideration for the sale or
transfer until the purchaser or transferee receives from the
Department a certificate showing that no unpaid tax, penalty
or interest is due from the seller or transferor under this
Act.

The purchaser or transferee is relieved of any duty to
continue to withhold from the purchase price and of any
liability for tax, penalty, or interest due hereunder from the
seller or transferor if the Department fails to notify the
purchaser or transferee in the manner provided herein of the
amount to be withheld within 10 business days after the sale or
transfer has been reported to the Department or within 60
business days after issuance of the initial order to withhold,
as the case may be. The Department shall have the right to
determine amounts claimed on an estimated basis to allow for
periods for which returns were not filed when due, pending
assessments and audits not completed, however the purchaser or
transferee shall be personally liable only for the actual
amount due when determined.
If the seller or transferor has failed to pay the tax,
penalty, and interest due from him hereunder and the
Department makes timely claim therefor against the purchaser
or transferee as hereinabove provided, then the purchaser or
transferee shall pay to the Department the amount so withheld
from the purchase price. If the purchaser or transferee fails
to comply with the requirements of this Section, the purchaser
or transferee shall be personally liable to the Department for
the amount owed hereunder by the seller or transferor up to the
amount of the reasonable value of the property acquired by the
purchaser or transferee.
Any person who shall acquire any property or rights

thereto which, at the time of such acquisition, is subject to a
valid lien in favor of the Department, shall be personally
liable to the Department for a sum equal to the amount of
taxes, penalties and interests, secured by such lien, but not
to exceed the reasonable value of such property acquired by
him.
(Source: P.A. 94-776, eff. 5-19-06.)
(35 ILCS 5/905) (from Ch. 120, par. 9-905)
Sec. 905. Limitations on Notices of Deficiency.
(a) In general. Except as otherwise provided in this Act:
(1) A notice of deficiency shall be issued not later
than 3 years after the date the return was filed, and
(2) No deficiency shall be assessed or collected with
respect to the year for which the return was filed unless
such notice is issued within such period.
(a-5) Notwithstanding any other provision of this Act to
the contrary, for any taxable year included in a claim for
credit or refund for which the statute of limitations for
issuing a notice of deficiency under this Act will expire less
than 6 months after the date a taxpayer files the claim for
credit or refund, the statute of limitations is automatically
extended for 6 months from the date it would have otherwise
expired.
(b) Substantial omission of items.
(1) Omission of more than 25% of income. If the

taxpayer omits from base income an amount properly
includible therein which is in excess of 25% of the amount
of base income stated in the return, a notice of
deficiency may be issued not later than 6 years after the
return was filed. For purposes of this paragraph, there
shall not be taken into account any amount which is
omitted in the return if such amount is disclosed in the
return, or in a statement attached to the return, in a
manner adequate to apprise the Department of the nature
and the amount of such item.
(2) Reportable transactions. If a taxpayer fails to
include on any return or statement for any taxable year
any information with respect to a reportable transaction,
as required under Section 501(b) of this Act, a notice of
deficiency may be issued not later than 6 years after the
return is filed with respect to the taxable year in which
the taxpayer participated in the reportable transaction
and said deficiency is limited to the non-disclosed item.
(3) Withholding. If an employer omits from a return
required under Section 704A of this Act for any period
beginning on or after January 1, 2013, an amount required
to be withheld and to be reported on that return which is
in excess of 25% of the total amount of withholding
required to be reported on that return, a notice of
deficiency may be issued not later than 6 years after the
return was filed.

(c) No return or fraudulent return. If no return is filed
or a false and fraudulent return is filed with intent to evade
the tax imposed by this Act, a notice of deficiency may be
issued at any time. For purposes of this subsection (c), any
taxpayer who is required to join in the filing of a return
filed under the provisions of subsection (e) of Section 502 of
this Act for a taxable year ending on or after December 31,
2013 and who is not included on that return and does not file
its own return for that taxable year shall be deemed to have
failed to file a return; provided that the amount of any
proposed assessment set forth in a notice of deficiency issued
under this subsection (c) shall be limited to the amount of any
increase in liability under this Act that should have reported
on the return required under the provisions of subsection (e)
of Section 502 of this Act for that taxable year resulting from
proper inclusion of that taxpayer on that return.
(d) Failure to report federal change. If a taxpayer fails
to notify the Department in any case where notification is
required by Section 304(c) or 506(b), or fails to report a
change or correction which is treated in the same manner as if
it were a deficiency for federal income tax purposes, a notice
of deficiency may be issued (i) at any time or (ii) on or after
August 13, 1999, at any time for the taxable year for which the
notification is required or for any taxable year to which the
taxpayer may carry an Article 2 credit, or a Section 207 loss,
earned, incurred, or used in the year for which the

notification is required; provided, however, that the amount
of any proposed assessment set forth in the notice shall be
limited to the amount of any deficiency resulting under this
Act from the recomputation of the taxpayer's net income,
Article 2 credits, or Section 207 loss earned, incurred, or
used in the taxable year for which the notification is
required after giving effect to the item or items required to
be reported.
(e) Report of federal change.
(1) Before August 13, 1999, in any case where
notification of an alteration is given as required by
Section 506(b), a notice of deficiency may be issued at
any time within 2 years after the date such notification
is given, provided, however, that the amount of any
proposed assessment set forth in such notice shall be
limited to the amount of any deficiency resulting under
this Act from recomputation of the taxpayer's net income,
net loss, or Article 2 credits for the taxable year after
giving effect to the item or items reflected in the
reported alteration.
(2) On and after August 13, 1999, in any case where
notification of an alteration is given as required by
Section 506(b), a notice of deficiency may be issued at
any time within 2 years after the date such notification
is given for the taxable year for which the notification
is given or for any taxable year to which the taxpayer may

carry an Article 2 credit, or a Section 207 loss, earned,
incurred, or used in the year for which the notification
is given, provided, however, that the amount of any
proposed assessment set forth in such notice shall be
limited to the amount of any deficiency resulting under
this Act from recomputation of the taxpayer's net income,
Article 2 credits, or Section 207 loss earned, incurred,
or used in the taxable year for which the notification is
given after giving effect to the item or items reflected
in the reported alteration.
(f) Extension by agreement. Where, before the expiration
of the time prescribed in this Section for the issuance of a
notice of deficiency, both the Department and the taxpayer
shall have consented in writing to its issuance after such
time, such notice may be issued at any time prior to the
expiration of the period agreed upon. In the case of a taxpayer
who is a partnership, Subchapter S corporation, or trust and
who enters into an agreement with the Department pursuant to
this subsection on or after January 1, 2003, a notice of
deficiency may be issued to the partners, shareholders, or
beneficiaries of the taxpayer at any time prior to the
expiration of the period agreed upon. Any proposed assessment
set forth in the notice, however, shall be limited to the
amount of any deficiency resulting under this Act from
recomputation of items of income, deduction, credits, or other
amounts of the taxpayer that are taken into account by the

partner, shareholder, or beneficiary in computing its
liability under this Act. The period so agreed upon may be
extended by subsequent agreements in writing made before the
expiration of the period previously agreed upon.
(g) Erroneous refunds. In any case in which there has been
an erroneous refund of tax payable under this Act, a notice of
deficiency may be issued at any time within 2 years from the
making of such refund, or within 5 years from the making of
such refund if it appears that any part of the refund was
induced by fraud or the misrepresentation of a material fact,
provided, however, that the amount of any proposed assessment
set forth in such notice shall be limited to the amount of such
erroneous refund.
Beginning July 1, 1993, in any case in which there has been
a refund of tax payable under this Act attributable to a net
loss carryback as provided for in Section 207, and that refund
is subsequently determined to be an erroneous refund due to a
reduction in the amount of the net loss which was originally
carried back, a notice of deficiency for the erroneous refund
amount may be issued at any time during the same time period in
which a notice of deficiency can be issued on the loss year
creating the carryback amount and subsequent erroneous refund.
The amount of any proposed assessment set forth in the notice
shall be limited to the amount of such erroneous refund.
(h) Time return deemed filed. For purposes of this Section
a tax return filed before the last day prescribed by law

(including any extension thereof) shall be deemed to have been
filed on such last day.
(i) Request for prompt determination of liability. For
purposes of subsection (a)(1), in the case of a tax return
required under this Act in respect of a decedent, or by his
estate during the period of administration, or by a
corporation, the period referred to in such Subsection shall
be 18 months after a written request for prompt determination
of liability is filed with the Department (at such time and in
such form and manner as the Department shall by regulations
prescribe) by the executor, administrator, or other fiduciary
representing the estate of such decedent, or by such
corporation, but not more than 3 years after the date the
return was filed. This subsection shall not apply in the case
of a corporation unless:
(1) (A) such written request notifies the Department
that the corporation contemplates dissolution at or before
the expiration of such 18-month period, (B) the
dissolution is begun in good faith before the expiration
of such 18-month period, and (C) the dissolution is
completed;
(2) (A) such written request notifies the Department
that a dissolution has in good faith been begun, and (B)
the dissolution is completed; or
(3) a dissolution has been completed at the time such
written request is made.

(j) Withholding tax. In the case of returns required under
Article 7 of this Act (with respect to any amounts withheld as
tax or any amounts required to have been withheld as tax) a
notice of deficiency shall be issued not later than 3 years
after the 15th day of the 4th month following the close of the
calendar year in which such withholding was required.
(k) Penalties for failure to make information reports. A
notice of deficiency for the penalties provided by Subsection
1405.1(c) of this Act may not be issued more than 3 years after
the due date of the reports with respect to which the penalties
are asserted.
(l) Penalty for failure to file withholding returns. A
notice of deficiency for penalties provided by Section 1004 of
this Act for taxpayer's failure to file withholding returns
may not be issued more than three years after the 15th day of
the 4th month following the close of the calendar year in which
the withholding giving rise to taxpayer's obligation to file
those returns occurred.
(m) Transferee liability. A notice of deficiency may be
issued to a transferee relative to a liability asserted under
Section 1405 during time periods defined as follows:
1) Initial Transferee. In the case of the liability of
an initial transferee, up to 2 years after the expiration
of the period of limitation for assessment against the
transferor, except that if a court proceeding for review
of the assessment against the transferor has begun, then

up to 2 years after the return of the certified copy of the
judgment in the court proceeding.
2) Transferee of Transferee. In the case of the
liability of a transferee, up to 2 years after the
expiration of the period of limitation for assessment
against the preceding transferee, but not more than 3
years after the expiration of the period of limitation for
assessment against the initial transferor; except that if,
before the expiration of the period of limitation for the
assessment of the liability of the transferee, a court
proceeding for the collection of the tax or liability in
respect thereof has been begun against the initial
transferor or the last preceding transferee, as the case
may be, then the period of limitation for assessment of
the liability of the transferee shall expire 2 years after
the return of the certified copy of the judgment in the
court proceeding.
(n) Notice of decrease in net loss. On and after August 23,
2002, no notice of deficiency shall be issued as the result of
a decrease determined by the Department in the net loss
incurred by a taxpayer in any taxable year ending prior to
December 31, 2002 under Section 207 of this Act unless the
Department has notified the taxpayer of the proposed decrease
within 3 years after the return reporting the loss was filed or
within one year after an amended return reporting an increase
in the loss was filed, provided that in the case of an amended

return, a decrease proposed by the Department more than 3
years after the original return was filed may not exceed the
increase claimed by the taxpayer on the original return.
(Source: P.A. 98-496, eff. 1-1-14.)
Section 15. The Use Tax Act is amended by changing Section
21 as follows:
(35 ILCS 105/21) (from Ch. 120, par. 439.21)
Sec. 21. As to any claim for credit or refund filed with
the Department on and after January 1 but on or before June 30
of any given year, no amount of tax or penalty or interest
erroneously paid (either in total or partial liquidation of a
tax or penalty or interest under this Act) more than 3 years
prior to such January 1 shall be credited or refunded, and as
to any such claim filed on and after July 1 but on or before
December 31 of any given year, no amount of tax or penalty or
interest erroneously paid (either in total or partial
liquidation of a tax or penalty or interest under this Act)
more than 3 years prior to such July 1 shall be credited or
refunded. Notwithstanding any other provision of this Act to
the contrary, for any period included in a claim for credit or
refund for which the statute of limitations for issuing a
notice of tax liability under this Act will expire less than 6
months after the date a taxpayer files the claim for credit or
refund, the statute of limitations is automatically extended

for 6 months from the date it would have otherwise expired. No
claim shall be allowed for any amount paid to the Department,
whether paid voluntarily or involuntarily, if paid in total or
partial liquidation of an assessment which had become final
before the claim for credit or refund to recover the amount so
paid is filed with the Department, or if paid in total or
partial liquidation of a judgment or order of court.
(Source: P.A. 79-1366; 79-1365.)
Section 20. The Service Occupation Tax Act is amended by
changing Section 19 as follows:
(35 ILCS 115/19) (from Ch. 120, par. 439.119)
Sec. 19. As to any claim for credit or refund filed with
the Department on or after each January 1 and July 1, no amount
of tax or penalty or interest erroneously paid (either in
total or partial liquidation of a tax or penalty or interest
under this Act) more than 3 years prior to such January 1 and
July 1, respectively, shall be credited or refunded, except
that if both the Department and taxpayer have agreed to an
extension of time to issue a notice of tax liability as
provided in Section 4 of the Retailers' Occupation Tax Act,
such claim may be filed at any time prior to the expiration of
the period agreed upon. Notwithstanding any other provision of
this Act to the contrary, for any period included in a claim
for credit or refund for which the statute of limitations for

issuing a notice of tax liability under this Act will expire
less than 6 months after the date a taxpayer files the claim
for credit or refund, the statute of limitations is
automatically extended for 6 months from the date it would
have otherwise expired. No claim shall be allowed for any
amount paid to the Department, whether paid voluntarily or
involuntarily, if paid in total or partial liquidation of an
assessment which had become final before the claim for credit
or refund to recover the amount so paid is filed with the
Department, or if paid in total or partial liquidation of a
judgment or order of court.
(Source: P.A. 90-562, eff. 12-16-97.)
Section 25. The Retailers' Occupation Tax Act is amended
by changing Sections 2a and 6 as follows:
(35 ILCS 120/2a) (from Ch. 120, par. 441a)
Sec. 2a. It is unlawful for any person to engage in the
business of selling tangible personal property at retail in
this State without a certificate of registration from the
Department. Application for a certificate of registration
shall be made to the Department upon forms furnished by it.
Each such application shall be signed and verified and shall
state: (1) the name and social security number of the
applicant; (2) the address of his principal place of business;
(3) the address of the principal place of business from which

he engages in the business of selling tangible personal
property at retail in this State and the addresses of all other
places of business, if any (enumerating such addresses, if
any, in a separate list attached to and made a part of the
application), from which he engages in the business of selling
tangible personal property at retail in this State; (4) the
name and address of the person or persons who will be
responsible for filing returns and payment of taxes due under
this Act; (5) in the case of a publicly traded corporation, the
name and title of the Chief Financial Officer, Chief Operating
Officer, and any other officer or employee with responsibility
for preparing tax returns under this Act, and, in the case of
all other corporations, the name, title, and social security
number of each corporate officer; (6) in the case of a limited
liability company, the name, social security number, and FEIN
number of each manager and member; and (7) such other
information as the Department may reasonably require. The
application shall contain an acceptance of responsibility
signed by the person or persons who will be responsible for
filing returns and payment of the taxes due under this Act. If
the applicant will sell tangible personal property at retail
through vending machines, his application to register shall
indicate the number of vending machines to be so operated. If
requested by the Department at any time, that person shall
verify the total number of vending machines he or she uses in
his or her business of selling tangible personal property at

retail.
The Department shall provide by rule for an expedited
business registration process for remote retailers required to
register and file under subsection (b) of Section 2 who use a
certified service provider to file their returns under this
Act. Such expedited registration process shall allow the
Department to register a taxpayer based upon the same
registration information required by the Streamlined Sales Tax
Governing Board for states participating in the Streamlined
Sales Tax Project.
The Department may deny a certificate of registration to
any applicant if a person who is named as the owner, a partner,
a manager or member of a limited liability company, or a
corporate officer of the applicant on the application for the
certificate of registration is or has been named as the owner,
a partner, a manager or member of a limited liability company,
or a corporate officer on the application for the certificate
of registration of another retailer that is in default for
moneys due under this Act or any other tax or fee Act
administered by the Department. For purposes of this paragraph
only, in determining whether a person is in default for moneys
due, the Department shall include only amounts established as
a final liability within the 23 20 years prior to the date of
the Department's notice of denial of a certificate of
registration.
The Department may require an applicant for a certificate

of registration hereunder to, at the time of filing such
application, furnish a bond from a surety company authorized
to do business in the State of Illinois, or an irrevocable bank
letter of credit or a bond signed by 2 personal sureties who
have filed, with the Department, sworn statements disclosing
net assets equal to at least 3 times the amount of the bond to
be required of such applicant, or a bond secured by an
assignment of a bank account or certificate of deposit, stocks
or bonds, conditioned upon the applicant paying to the State
of Illinois all moneys becoming due under this Act and under
any other State tax law or municipal or county tax ordinance or
resolution under which the certificate of registration that is
issued to the applicant under this Act will permit the
applicant to engage in business without registering separately
under such other law, ordinance or resolution. In making a
determination as to whether to require a bond or other
security, the Department shall take into consideration whether
the owner, any partner, any manager or member of a limited
liability company, or a corporate officer of the applicant is
or has been the owner, a partner, a manager or member of a
limited liability company, or a corporate officer of another
retailer that is in default for moneys due under this Act or
any other tax or fee Act administered by the Department; and
whether the owner, any partner, any manager or member of a
limited liability company, or a corporate officer of the
applicant is or has been the owner, a partner, a manager or

member of a limited liability company, or a corporate officer
of another retailer whose certificate of registration has been
revoked within the previous 5 years under this Act or any other
tax or fee Act administered by the Department. If a bond or
other security is required, the Department shall fix the
amount of the bond or other security, taking into
consideration the amount of money expected to become due from
the applicant under this Act and under any other State tax law
or municipal or county tax ordinance or resolution under which
the certificate of registration that is issued to the
applicant under this Act will permit the applicant to engage
in business without registering separately under such other
law, ordinance, or resolution. The amount of security required
by the Department shall be such as, in its opinion, will
protect the State of Illinois against failure to pay the
amount which may become due from the applicant under this Act
and under any other State tax law or municipal or county tax
ordinance or resolution under which the certificate of
registration that is issued to the applicant under this Act
will permit the applicant to engage in business without
registering separately under such other law, ordinance or
resolution, but the amount of the security required by the
Department shall not exceed three times the amount of the
applicant's average monthly tax liability, or $50,000.00,
whichever amount is lower.
No certificate of registration under this Act shall be

issued by the Department until the applicant provides the
Department with satisfactory security, if required, as herein
provided for.
Upon receipt of the application for certificate of
registration in proper form, and upon approval by the
Department of the security furnished by the applicant, if
required, the Department shall issue to such applicant a
certificate of registration which shall permit the person to
whom it is issued to engage in the business of selling tangible
personal property at retail in this State. The certificate of
registration shall be conspicuously displayed at the place of
business which the person so registered states in his
application to be the principal place of business from which
he engages in the business of selling tangible personal
property at retail in this State.
No certificate of registration issued prior to July 1,
2017 to a taxpayer who files returns required by this Act on a
monthly basis or renewed prior to July 1, 2017 by a taxpayer
who files returns required by this Act on a monthly basis shall
be valid after the expiration of 5 years from the date of its
issuance or last renewal. No certificate of registration
issued on or after July 1, 2017 to a taxpayer who files returns
required by this Act on a monthly basis or renewed on or after
July 1, 2017 by a taxpayer who files returns required by this
Act on a monthly basis shall be valid after the expiration of
one year from the date of its issuance or last renewal. The

expiration date of a sub-certificate of registration shall be
that of the certificate of registration to which the
sub-certificate relates. Prior to July 1, 2017, a certificate
of registration shall automatically be renewed, subject to
revocation as provided by this Act, for an additional 5 years
from the date of its expiration unless otherwise notified by
the Department as provided by this paragraph. On and after
July 1, 2017, a certificate of registration shall
automatically be renewed, subject to revocation as provided by
this Act, for an additional one year from the date of its
expiration unless otherwise notified by the Department as
provided by this paragraph.
Where a taxpayer to whom a certificate of registration is
issued under this Act is in default to the State of Illinois
for delinquent returns or for moneys due under this Act or any
other State tax law or municipal or county ordinance
administered or enforced by the Department, the Department
shall, not less than 60 days before the expiration date of such
certificate of registration, give notice to the taxpayer to
whom the certificate was issued of the account period of the
delinquent returns, the amount of tax, penalty and interest
due and owing from the taxpayer, and that the certificate of
registration shall not be automatically renewed upon its
expiration date unless the taxpayer, on or before the date of
expiration, has filed and paid the delinquent returns or paid
the defaulted amount in full. A taxpayer to whom such a notice

is issued shall be deemed an applicant for renewal. The
Department shall promulgate regulations establishing
procedures for taxpayers who file returns on a monthly basis
but desire and qualify to change to a quarterly or yearly
filing basis and will no longer be subject to renewal under
this Section, and for taxpayers who file returns on a yearly or
quarterly basis but who desire or are required to change to a
monthly filing basis and will be subject to renewal under this
Section.
The Department may in its discretion approve renewal by an
applicant who is in default if, at the time of application for
renewal, the applicant files all of the delinquent returns or
pays to the Department such percentage of the defaulted amount
as may be determined by the Department and agrees in writing to
waive all limitations upon the Department for collection of
the remaining defaulted amount to the Department over a period
not to exceed 5 years from the date of renewal of the
certificate; however, no renewal application submitted by an
applicant who is in default shall be approved if the
immediately preceding renewal by the applicant was conditioned
upon the installment payment agreement described in this
Section. The payment agreement herein provided for shall be in
addition to and not in lieu of the security that may be
required by this Section of a taxpayer who is no longer
considered a prior continuous compliance taxpayer. The
execution of the payment agreement as provided in this Act

shall not toll the accrual of interest at the statutory rate.
The Department may suspend a certificate of registration
if the Department finds that the person to whom the
certificate of registration has been issued knowingly sold
contraband cigarettes.
A certificate of registration issued under this Act more
than 5 years before January 1, 1990 (the effective date of
Public Act 86-383) shall expire and be subject to the renewal
provisions of this Section on the next anniversary of the date
of issuance of such certificate which occurs more than 6
months after January 1, 1990 (the effective date of Public Act
86-383). A certificate of registration issued less than 5
years before January 1, 1990 (the effective date of Public Act
86-383) shall expire and be subject to the renewal provisions
of this Section on the 5th anniversary of the issuance of the
certificate.
If the person so registered states that he operates other
places of business from which he engages in the business of
selling tangible personal property at retail in this State,
the Department shall furnish him with a sub-certificate of
registration for each such place of business, and the
applicant shall display the appropriate sub-certificate of
registration at each such place of business. All
sub-certificates of registration shall bear the same
registration number as that appearing upon the certificate of
registration to which such sub-certificates relate.

If the applicant will sell tangible personal property at
retail through vending machines, the Department shall furnish
him with a sub-certificate of registration for each such
vending machine, and the applicant shall display the
appropriate sub-certificate of registration on each such
vending machine by attaching the sub-certificate of
registration to a conspicuous part of such vending machine. If
a person who is registered to sell tangible personal property
at retail through vending machines adds an additional vending
machine or additional vending machines to the number of
vending machines he or she uses in his or her business of
selling tangible personal property at retail, he or she shall
notify the Department, on a form prescribed by the Department,
to request an additional sub-certificate or additional
sub-certificates of registration, as applicable. With each
such request, the applicant shall report the number of
sub-certificates of registration he or she is requesting as
well as the total number of vending machines from which he or
she makes retail sales.
Where the same person engages in 2 or more businesses of
selling tangible personal property at retail in this State,
which businesses are substantially different in character or
engaged in under different trade names or engaged in under
other substantially dissimilar circumstances (so that it is
more practicable, from an accounting, auditing or bookkeeping
standpoint, for such businesses to be separately registered),

the Department may require or permit such person (subject to
the same requirements concerning the furnishing of security as
those that are provided for hereinbefore in this Section as to
each application for a certificate of registration) to apply
for and obtain a separate certificate of registration for each
such business or for any of such businesses, under a single
certificate of registration supplemented by related
sub-certificates of registration.
Any person who is registered under the Retailers'
Occupation Tax Act as of March 8, 1963, and who, during the
3-year period immediately prior to March 8, 1963, or during a
continuous 3-year period part of which passed immediately
before and the remainder of which passes immediately after
March 8, 1963, has been so registered continuously and who is
determined by the Department not to have been either
delinquent or deficient in the payment of tax liability during
that period under this Act or under any other State tax law or
municipal or county tax ordinance or resolution under which
the certificate of registration that is issued to the
registrant under this Act will permit the registrant to engage
in business without registering separately under such other
law, ordinance or resolution, shall be considered to be a
Prior Continuous Compliance taxpayer. Also any taxpayer who
has, as verified by the Department, faithfully and
continuously complied with the condition of his bond or other
security under the provisions of this Act for a period of 3

consecutive years shall be considered to be a Prior Continuous
Compliance taxpayer.
Every Prior Continuous Compliance taxpayer shall be exempt
from all requirements under this Act concerning the furnishing
of a bond or other security as a condition precedent to his
being authorized to engage in the business of selling tangible
personal property at retail in this State. This exemption
shall continue for each such taxpayer until such time as he may
be determined by the Department to be delinquent in the filing
of any returns, or is determined by the Department (either
through the Department's issuance of a final assessment which
has become final under the Act, or by the taxpayer's filing of
a return which admits tax that is not paid to be due) to be
delinquent or deficient in the paying of any tax under this Act
or under any other State tax law or municipal or county tax
ordinance or resolution under which the certificate of
registration that is issued to the registrant under this Act
will permit the registrant to engage in business without
registering separately under such other law, ordinance or
resolution, at which time that taxpayer shall become subject
to all the financial responsibility requirements of this Act
and, as a condition of being allowed to continue to engage in
the business of selling tangible personal property at retail,
may be required to post bond or other acceptable security with
the Department covering liability which such taxpayer may
thereafter incur. Any taxpayer who fails to pay an admitted or

established liability under this Act may also be required to
post bond or other acceptable security with this Department
guaranteeing the payment of such admitted or established
liability.
No certificate of registration shall be issued to any
person who is in default to the State of Illinois for moneys
due under this Act or under any other State tax law or
municipal or county tax ordinance or resolution under which
the certificate of registration that is issued to the
applicant under this Act will permit the applicant to engage
in business without registering separately under such other
law, ordinance or resolution.
Any person aggrieved by any decision of the Department
under this Section may, within 20 days after notice of such
decision, protest and request a hearing, whereupon the
Department shall give notice to such person of the time and
place fixed for such hearing and shall hold a hearing in
conformity with the provisions of this Act and then issue its
final administrative decision in the matter to such person. In
the absence of such a protest within 20 days, the Department's
decision shall become final without any further determination
being made or notice given.
With respect to security other than bonds (upon which the
Department may sue in the event of a forfeiture), if the
taxpayer fails to pay, when due, any amount whose payment such
security guarantees, the Department shall, after such

liability is admitted by the taxpayer or established by the
Department through the issuance of a final assessment that has
become final under the law, convert the security which that
taxpayer has furnished into money for the State, after first
giving the taxpayer at least 10 days' written notice, by
registered or certified mail, to pay the liability or forfeit
such security to the Department. If the security consists of
stocks or bonds or other securities which are listed on a
public exchange, the Department shall sell such securities
through such public exchange. If the security consists of an
irrevocable bank letter of credit, the Department shall
convert the security in the manner provided for in the Uniform
Commercial Code. If the security consists of a bank
certificate of deposit, the Department shall convert the
security into money by demanding and collecting the amount of
such bank certificate of deposit from the bank which issued
such certificate. If the security consists of a type of stocks
or other securities which are not listed on a public exchange,
the Department shall sell such security to the highest and
best bidder after giving at least 10 days' notice of the date,
time and place of the intended sale by publication in the
"State Official Newspaper". If the Department realizes more
than the amount of such liability from the security, plus the
expenses incurred by the Department in converting the security
into money, the Department shall pay such excess to the
taxpayer who furnished such security, and the balance shall be

paid into the State Treasury.
The Department shall discharge any surety and shall
release and return any security deposited, assigned, pledged
or otherwise provided to it by a taxpayer under this Section
within 30 days after:
(1) such taxpayer becomes a Prior Continuous
Compliance taxpayer; or
(2) such taxpayer has ceased to collect receipts on
which he is required to remit tax to the Department, has
filed a final tax return, and has paid to the Department an
amount sufficient to discharge his remaining tax
liability, as determined by the Department, under this Act
and under every other State tax law or municipal or county
tax ordinance or resolution under which the certificate of
registration issued under this Act permits the registrant
to engage in business without registering separately under
such other law, ordinance or resolution. The Department
shall make a final determination of the taxpayer's
outstanding tax liability as expeditiously as possible
after his final tax return has been filed; if the
Department cannot make such final determination within 45
days after receiving the final tax return, within such
period it shall so notify the taxpayer, stating its
reasons therefor.
(Source: P.A. 100-302, eff. 8-24-17; 100-303, eff. 8-24-17;
100-863, eff. 8-14-18; 101-31, eff. 6-28-19.)

(35 ILCS 120/6) (from Ch. 120, par. 445)
Sec. 6. Credit memorandum or refund. If it appears, after
claim therefor filed with the Department, that an amount of
tax or penalty or interest has been paid which was not due
under this Act, whether as the result of a mistake of fact or
an error of law, except as hereinafter provided, then the
Department shall issue a credit memorandum or refund to the
person who made the erroneous payment or, if that person died
or became a person under legal disability, to his or her legal
representative, as such. For purposes of this Section, the tax
is deemed to be erroneously paid by a retailer when the
manufacturer of a motor vehicle sold by the retailer accepts
the return of that automobile and refunds to the purchaser the
selling price of that vehicle as provided in the New Vehicle
Buyer Protection Act. When a motor vehicle is returned for a
refund of the purchase price under the New Vehicle Buyer
Protection Act, the Department shall issue a credit memorandum
or a refund for the amount of tax paid by the retailer under
this Act attributable to the initial sale of that vehicle.
Claims submitted by the retailer are subject to the same
restrictions and procedures provided for in this Act. If it is
determined that the Department should issue a credit
memorandum or refund, the Department may first apply the
amount thereof against any tax or penalty or interest due or to
become due under this Act or under the Use Tax Act, the Service

Occupation Tax Act, the Service Use Tax Act, any local
occupation or use tax administered by the Department, Section
4 of the Water Commission Act of 1985, subsections (b), (c) and
(d) of Section 5.01 of the Local Mass Transit District Act, or
subsections (e), (f) and (g) of Section 4.03 of the Regional
Transportation Authority Act, from the person who made the
erroneous payment. If no tax or penalty or interest is due and
no proceeding is pending to determine whether such person is
indebted to the Department for tax or penalty or interest, the
credit memorandum or refund shall be issued to the claimant;
or (in the case of a credit memorandum) the credit memorandum
may be assigned and set over by the lawful holder thereof,
subject to reasonable rules of the Department, to any other
person who is subject to this Act, the Use Tax Act, the Service
Occupation Tax Act, the Service Use Tax Act, any local
occupation or use tax administered by the Department, Section
4 of the Water Commission Act of 1985, subsections (b), (c) and
(d) of Section 5.01 of the Local Mass Transit District Act, or
subsections (e), (f) and (g) of Section 4.03 of the Regional
Transportation Authority Act, and the amount thereof applied
by the Department against any tax or penalty or interest due or
to become due under this Act or under the Use Tax Act, the
Service Occupation Tax Act, the Service Use Tax Act, any local
occupation or use tax administered by the Department, Section
4 of the Water Commission Act of 1985, subsections (b), (c) and
(d) of Section 5.01 of the Local Mass Transit District Act, or

subsections (e), (f) and (g) of Section 4.03 of the Regional
Transportation Authority Act, from such assignee. However, as
to any claim for credit or refund filed with the Department on
and after each January 1 and July 1 no amount of tax or penalty
or interest erroneously paid (either in total or partial
liquidation of a tax or penalty or amount of interest under
this Act) more than 3 years prior to such January 1 and July 1,
respectively, shall be credited or refunded, except that if
both the Department and the taxpayer have agreed to an
extension of time to issue a notice of tax liability as
provided in Section 4 of this Act, such claim may be filed at
any time prior to the expiration of the period agreed upon.
Notwithstanding any other provision of this Act to the
contrary, for any period included in a claim for credit or
refund for which the statute of limitations for issuing a
notice of tax liability under this Act will expire less than 6
months after the date a taxpayer files the claim for credit or
refund, the statute of limitations is automatically extended
for 6 months from the date it would have otherwise expired.
No claim may be allowed for any amount paid to the
Department, whether paid voluntarily or involuntarily, if paid
in total or partial liquidation of an assessment which had
become final before the claim for credit or refund to recover
the amount so paid is filed with the Department, or if paid in
total or partial liquidation of a judgment or order of court.
No credit may be allowed or refund made for any amount paid by

or collected from any claimant unless it appears (a) that the
claimant bore the burden of such amount and has not been
relieved thereof nor reimbursed therefor and has not shifted
such burden directly or indirectly through inclusion of such
amount in the price of the tangible personal property sold by
him or her or in any manner whatsoever; and that no
understanding or agreement, written or oral, exists whereby he
or she or his or her legal representative may be relieved of
the burden of such amount, be reimbursed therefor or may shift
the burden thereof; or (b) that he or she or his or her legal
representative has repaid unconditionally such amount to his
or her vendee (1) who bore the burden thereof and has not
shifted such burden directly or indirectly, in any manner
whatsoever; (2) who, if he or she has shifted such burden, has
repaid unconditionally such amount to his own vendee; and (3)
who is not entitled to receive any reimbursement therefor from
any other source than from his or her vendor, nor to be
relieved of such burden in any manner whatsoever. No credit
may be allowed or refund made for any amount paid by or
collected from any claimant unless it appears that the
claimant has unconditionally repaid, to the purchaser, any
amount collected from the purchaser and retained by the
claimant with respect to the same transaction under the Use
Tax Act.
Any credit or refund that is allowed under this Section
shall bear interest at the rate and in the manner specified in

the Uniform Penalty and Interest Act.
In case the Department determines that the claimant is
entitled to a refund, such refund shall be made only from the
Aviation Fuel Sales Tax Refund Fund or from such appropriation
as may be available for that purpose, as appropriate. If it
appears unlikely that the amount available would permit
everyone having a claim allowed during the period covered by
such appropriation or from the Aviation Fuel Sales Tax Refund
Fund, as appropriate, to elect to receive a cash refund, the
Department, by rule or regulation, shall provide for the
payment of refunds in hardship cases and shall define what
types of cases qualify as hardship cases.
If a retailer who has failed to pay retailers' occupation
tax on gross receipts from retail sales is required by the
Department to pay such tax, such retailer, without filing any
formal claim with the Department, shall be allowed to take
credit against such retailers' occupation tax liability to the
extent, if any, to which such retailer has paid an amount
equivalent to retailers' occupation tax or has paid use tax in
error to his or her vendor or vendors of the same tangible
personal property which such retailer bought for resale and
did not first use before selling it, and no penalty or interest
shall be charged to such retailer on the amount of such credit.
However, when such credit is allowed to the retailer by the
Department, the vendor is precluded from refunding any of that
tax to the retailer and filing a claim for credit or refund

with respect thereto with the Department. The provisions of
this amendatory Act shall be applied retroactively, regardless
of the date of the transaction.
(Source: P.A. 101-10, eff. 6-5-19.)
Section 30. The Cigarette Machine Operators' Occupation
Tax Act is amended by changing Section 1-55 as follows:
(35 ILCS 128/1-55)
Sec. 1-55. Claims; credit memorandum or refunds. If it
appears, after claim is filed with the Department, that an
amount of tax or penalty has been paid which was not due under
this Act, whether as the result of a mistake of fact or an
error of law, except as hereinafter provided, then the
Department shall issue a credit memorandum or refund to the
person who made the erroneous payment or, if that person has
died or become a person under legal disability, to his or her
legal representative.
If it is determined that the Department should issue a
credit or refund under this Act, the Department may first
apply the amount thereof against any amount of tax or penalty
due under this Act, the Cigarette Tax Act, the Cigarette Use
Tax Act, or the Tobacco Products Act of 1995 from the person
entitled to that credit or refund. For this purpose, if
proceedings are pending to determine whether or not any tax or
penalty is due under this Act or under the Cigarette Tax Act,

Cigarette Use Tax Act, or the Tobacco Products Act of 1995 from
the person, the Department may withhold issuance of the credit
or refund pending the final disposition of such proceedings
and may apply such credit or refund against any amount found to
be due to the Department under this Act, the Cigarette Tax Act,
the Cigarette Use Tax Act, or the Tobacco Products Act of 1995
as a result of such proceedings. The balance, if any, of the
credit or refund shall be issued to the person entitled
thereto.
If no tax or penalty is due and no proceeding is pending to
determine whether such taxpayer is indebted to the Department
for the payment of a tax or penalty, the credit memorandum or
refund shall be issued to the claimant; or (in the case of a
credit memorandum) the credit memorandum may be assigned and
set over by the lawful holder thereof, subject to reasonable
rules of the Department, to any other person who is subject to
this Act, the Cigarette Tax Act, the Cigarette Use Tax Act, or
the Tobacco Products Act of 1995, and the amount thereof shall
be applied by the Department against any tax or penalty due or
to become due under this Act, the Cigarette Tax Act, the
Cigarette Use Tax Act, or the Tobacco Products Act of 1995 from
such assignee.
As to any claim filed hereunder with the Department on and
after each January 1 and July 1, no amount of tax or penalty
erroneously paid (either in total or partial liquidation of a
tax or penalty under this Act) more than 3 years prior to such

January 1 and July 1, respectively, shall be credited or
refunded, except that, if both the Department and the taxpayer
have agreed to an extension of time to issue a notice of tax
liability under this Act, the claim may be filed at any time
prior to the expiration of the period agreed upon.
Notwithstanding any other provision of this Act to the
contrary, for any period included in a claim for credit or
refund for which the statute of limitations for issuing a
notice of tax liability under this Act will expire less than 6
months after the date a taxpayer files the claim for credit or
refund, the statute of limitations is automatically extended
for 6 months from the date it would have otherwise expired.
Any credit or refund that is allowed under this Act shall
bear interest at the rate and in the manner set forth in the
Uniform Penalty and Interest Act.
In case the Department determines that the claimant is
entitled to a refund, such refund shall be made only from
appropriations available for that purpose. If it appears
unlikely that the amount appropriated would permit everyone
having a claim allowed during the period covered by such
appropriation to elect to receive a cash refund, the
Department, by rule or regulation, shall provide for the
payment of refunds in hardship cases and shall define what
types of cases qualify as hardship cases.
The provisions of Sections 6a, 6b, and 6c of the
Retailers' Occupation Tax Act which are not inconsistent with

this Act shall apply, as far as practicable, to the subject
matter of this Act to the same extent as if such provisions
were included herein.
(Source: P.A. 97-688, eff. 6-14-12.)
Section 35. The Cigarette Tax Act is amended by changing
Section 9d as follows:
(35 ILCS 130/9d) (from Ch. 120, par. 453.9d)
Sec. 9d. If it appears, after claim therefor filed with
the Department, that an amount of tax or penalty has been paid
which was not due under this Act, whether as the result of a
mistake of fact or an error of law, except as hereinafter
provided, then the Department shall issue a credit memorandum
or refund to the person who made the erroneous payment or, if
that person has died or become a person under legal
disability, to his or her legal representative, as such.
If it is determined that the Department should issue a
credit or refund under this Act, the Department may first
apply the amount thereof against any amount of tax or penalty
due under this Act or under the Cigarette Use Tax Act from the
person entitled to such credit or refund. For this purpose, if
proceedings are pending to determine whether or not any tax or
penalty is due under this Act or under the Cigarette Use Tax
Act from such person, the Department may withhold issuance of
the credit or refund pending the final disposition of such

proceedings and may apply such credit or refund against any
amount found to be due to the Department under this Act or
under the Cigarette Use Tax Act as a result of such
proceedings. The balance, if any, of the credit or refund
shall be issued to the person entitled thereto.
If no tax or penalty is due and no proceeding is pending to
determine whether such taxpayer is indebted to the Department
for tax or penalty, the credit memorandum or refund shall be
issued to the claimant; or (in the case of a credit memorandum)
the credit memorandum may be assigned and set over by the
lawful holder thereof, subject to reasonable rules of the
Department, to any other person who is subject to this Act or
the Cigarette Use Tax Act, and the amount thereof shall be
applied by the Department against any tax or penalty due or to
become due under this Act or under the Cigarette Use Tax Act
from such assignee.
As to any claim filed hereunder with the Department on and
after each January 1 and July 1, no amount of tax or penalty
erroneously paid (either in total or partial liquidation of a
tax or penalty under this Act) more than 3 years prior to such
January 1 and July 1, respectively, shall be credited or
refunded, except that if both the Department and the taxpayer
have agreed to an extension of time to issue a notice of tax
liability under this Act, the claim may be filed at any time
prior to the expiration of the period agreed upon.
Notwithstanding any other provision of this Act to the

contrary, for any period included in a claim for credit or
refund for which the statute of limitations for issuing a
notice of tax liability under this Act will expire less than 6
months after the date a taxpayer files the claim for credit or
refund, the statute of limitations is automatically extended
for 6 months from the date it would have otherwise expired.
If the Department approves a claim for stamps affixed to a
product returned to a manufacturer or for replacement of
stamps, the credit memorandum shall not exceed the face value
of stamps originally affixed, and replacement stamps shall be
issued only in an amount equal to the value of the stamps
previously affixed. Higher denomination stamps shall not be
issued as replacements for lower value stamps. Distributors
must prove the face value of the stamps which have been
destroyed or returned to manufacturers when filing claims.
Any credit or refund that is allowed under this Act shall
bear interest at the rate and in the manner set forth in the
Uniform Penalty and Interest Act.
In case the Department determines that the claimant is
entitled to a refund, such refund shall be made only from such
appropriation as may be available for that purpose. If it
appears unlikely that the amount appropriated would permit
everyone having a claim allowed during the period covered by
such appropriation to elect to receive a cash refund, the
Department, by rule or regulation, shall provide for the
payment of refunds in hardship cases and shall define what

types of cases qualify as hardship cases.
If the Department approves a claim for the physical
replacement of cigarette tax stamps, the Department (subject
to the same limitations as those provided for hereinbefore in
this Section) may issue an assignable credit memorandum or
refund to the claimant or to the claimant's legal
representative.
The provisions of Sections 6a, 6b and 6c of the Retailers'
Occupation Tax Act which are not inconsistent with this Act,
shall apply, as far as practicable, to the subject matter of
this Act to the same extent as if such provisions were included
herein.
(Source: P.A. 90-491, eff. 1-1-98.)
Section 40. The Cigarette Use Tax Act is amended by
changing Section 14a as follows:
(35 ILCS 135/14a) (from Ch. 120, par. 453.44a)
Sec. 14a. If it appears, after claim therefor filed with
the Department, that an amount of tax or penalty has been paid
which was not due under this Act, whether as the result of a
mistake of fact or an error of law, except as hereinafter
provided, then the Department shall issue a credit memorandum
or refund to the person who made the erroneous payment or, if
that person has died or become a person under legal
disability, to his or her legal representative, as such.

If it is determined that the Department should issue a
credit or refund under this Act, the Department may first
apply the amount thereof against any amount of tax or penalty
due under this Act or under the Cigarette Tax Act from the
person entitled to such credit or refund. For this purpose, if
proceedings are pending to determine whether or not any tax or
penalty is due under this Act or under the Cigarette Tax Act
from such person, the Department may withhold issuance of the
credit or refund pending the final disposition of such
proceedings and may apply such credit or refund against any
amount found to be due to the Department under this Act or
under the Cigarette Tax Act as a result of such proceedings.
The balance, if any, of the credit or refund shall be issued to
the person entitled thereto.
If no tax or penalty is due and no proceeding is pending to
determine whether such taxpayer is indebted to the Department
for tax or penalty, the credit memorandum or refund shall be
issued to the claimant; or (in the case of a credit memorandum)
may be assigned and set over by the lawful holder thereof,
subject to reasonable rules of the Department, to any other
person who is subject to this Act or the Cigarette Tax Act, and
the amount thereof shall be applied by the Department against
any tax or penalty due or to become due under this Act or under
the Cigarette Tax Act from such assignee.
As to any claim filed hereunder with the Department on and
after each January 1 and July 1, no amount of tax or penalty

erroneously paid (either in total or partial liquidation of a
tax or penalty under this Act) more than 3 years prior to such
January 1 and July 1, respectively, shall be credited or
refunded, except that if both the Department and the taxpayer
have agreed to an extension of time to issue a notice of tax
liability under this Act, the claim may be filed at any time
prior to the expiration of the period agreed upon.
Notwithstanding any other provision of this Act to the
contrary, for any period included in a claim for credit or
refund for which the statute of limitations for issuing a
notice of tax liability under this Act will expire less than 6
months after the date a taxpayer files the claim for credit or
refund, the statute of limitations is automatically extended
for 6 months from the date it would have otherwise expired.
In case the Department determines that the claimant is
entitled to a refund, such refund shall be made only from such
appropriation as may be available for that purpose. If it
appears unlikely that the amount appropriated would permit
everyone having a claim allowed during the period covered by
such appropriation to elect to receive a cash refund, the
Department, by rule or regulation, shall provide for the
payment of refunds in hardship cases and shall define what
types of cases qualify as hardship cases.
If the Department approves a claim for the physical
replacement of cigarette tax stamps, the Department (subject
to the same limitations as those provided for hereinbefore in

this Section) may issue an assignable credit memorandum or
refund to the claimant or to the claimant's legal
representative.
Any credit or refund that is allowed under this Act shall
bear interest at the rate and in the manner set forth in the
Uniform Penalty and Interest Act.
The provisions of Sections 6a, 6b and 6c of the
"Retailers' Occupation Tax Act", approved June 28, 1933, as
amended, in effect on the effective date of this amendatory
Act, as subsequently amended, which are not inconsistent with
this Act, shall apply, as far as practicable, to the subject
matter of this Act to the same extent as if such provisions
were included herein.
(Source: P.A. 90-491, eff. 1-1-98.)
Section 45. The Tobacco Products Tax Act of 1995 is
amended by changing Section 10-5 as follows:
(35 ILCS 143/10-5)
Sec. 10-5. Definitions. For purposes of this Act:
"Business" means any trade, occupation, activity, or
enterprise engaged in, at any location whatsoever, for the
purpose of selling tobacco products.
"Cigarette" has the meaning ascribed to the term in
Section 1 of the Cigarette Tax Act.
"Contraband little cigar" means:

(1) packages of little cigars containing 20 or 25
little cigars that do not bear a required tax stamp under
this Act;
(2) packages of little cigars containing 20 or 25
little cigars that bear a fraudulent, imitation, or
counterfeit tax stamp;
(3) packages of little cigars containing 20 or 25
little cigars that are improperly tax stamped, including
packages of little cigars that bear only a tax stamp of
another state or taxing jurisdiction; or
(4) packages of little cigars containing other than 20
or 25 little cigars in the possession of a distributor,
retailer or wholesaler, unless the distributor, retailer,
or wholesaler possesses, or produces within the time frame
provided in Section 10-27 or 10-28 of this Act, an invoice
from a stamping distributor, distributor, or wholesaler
showing that the tax on the packages has been or will be
paid.
"Correctional Industries program" means a program run by a
State penal institution in which residents of the penal
institution produce tobacco products for sale to persons
incarcerated in penal institutions or resident patients of a
State operated mental health facility.
"Department" means the Illinois Department of Revenue.
"Distributor" means any of the following:
(1) Any manufacturer or wholesaler in this State

engaged in the business of selling tobacco products who
sells, exchanges, or distributes tobacco products to
retailers or consumers in this State.
(2) Any manufacturer or wholesaler engaged in the
business of selling tobacco products from without this
State who sells, exchanges, distributes, ships, or
transports tobacco products to retailers or consumers
located in this State, so long as that manufacturer or
wholesaler has or maintains within this State, directly or
by subsidiary, an office, sales house, or other place of
business, or any agent or other representative operating
within this State under the authority of the person or
subsidiary, irrespective of whether the place of business
or agent or other representative is located here
permanently or temporarily.
(3) Any retailer who receives tobacco products on
which the tax has not been or will not be paid by another
distributor.
"Distributor" does not include any person, wherever
resident or located, who makes, manufactures, or fabricates
tobacco products as part of a Correctional Industries program
for sale to residents incarcerated in penal institutions or
resident patients of a State operated mental health facility.
"Electronic cigarette" means:
(1) any device that employs a battery or other
mechanism to heat a solution or substance to produce a

vapor or aerosol intended for inhalation, except for (A)
any device designed solely for use with cannabis that
contains a statement on the retail packaging that the
device is designed solely for use with cannabis and not
for use with tobacco or (B) any device that contains a
solution or substance that contains cannabis subject to
tax under the Compassionate Use of Medical Cannabis
Program Act or the Cannabis Regulation and Tax Act;
(2) any cartridge or container of a solution or
substance intended to be used with or in the device or to
refill the device, except for any cartridge or container
of a solution or substance that contains cannabis subject
to tax under the Compassionate Use of Medical Cannabis
Program Act or the Cannabis Regulation and Tax Act; or
(3) any solution or substance, whether or not it
contains nicotine, intended for use in the device, except
for any solution or substance that contains cannabis
subject to tax under the Compassionate Use of Medical
Cannabis Program Act or the Cannabis Regulation and Tax
Act.
The changes made to the definition of "electronic
cigarette" by this amendatory Act of the 102nd General
Assembly apply on and after June 28, 2019, but no claim for
credit or refund is allowed on or after the effective date of
this amendatory Act of the 102nd General Assembly for such
taxes paid during the period beginning June 28, 2019 and the

effective date of this amendatory Act of the 102nd General
Assembly.
"Electronic cigarette" includes, but is not limited to,
any electronic nicotine delivery system, electronic cigar,
electronic cigarillo, electronic pipe, electronic hookah, vape
pen, or similar product or device, and any component or part
that can be used to build the product or device. "Electronic
cigarette" does not include: cigarettes, as defined in Section
1 of the Cigarette Tax Act; any product approved by the United
States Food and Drug Administration for sale as a tobacco
cessation product, a tobacco dependence product, or for other
medical purposes that is marketed and sold solely for that
approved purpose; any asthma inhaler prescribed by a physician
for that condition that is marketed and sold solely for that
approved purpose; or any therapeutic product approved for use
under the Compassionate Use of Medical Cannabis Program Act.
"Little cigar" means and includes any roll, made wholly or
in part of tobacco, where such roll has an integrated
cellulose acetate filter and weighs less than 4 pounds per
thousand and the wrapper or cover of which is made in whole or
in part of tobacco.
"Manufacturer" means any person, wherever resident or
located, who manufactures and sells tobacco products, except a
person who makes, manufactures, or fabricates tobacco products
as a part of a Correctional Industries program for sale to
persons incarcerated in penal institutions or resident

patients of a State operated mental health facility.
Beginning on January 1, 2013, "moist snuff" means any
finely cut, ground, or powdered tobacco that is not intended
to be smoked, but shall not include any finely cut, ground, or
powdered tobacco that is intended to be placed in the nasal
cavity.
"Person" means any natural individual, firm, partnership,
association, joint stock company, joint venture, limited
liability company, or public or private corporation, however
formed, or a receiver, executor, administrator, trustee,
conservator, or other representative appointed by order of any
court.
"Place of business" means and includes any place where
tobacco products are sold or where tobacco products are
manufactured, stored, or kept for the purpose of sale or
consumption, including any vessel, vehicle, airplane, train,
or vending machine.
"Retailer" means any person in this State engaged in the
business of selling tobacco products to consumers in this
State, regardless of quantity or number of sales.
"Sale" means any transfer, exchange, or barter in any
manner or by any means whatsoever for a consideration and
includes all sales made by persons.
"Stamp" or "stamps" mean the indicia required to be
affixed on a package of little cigars that evidence payment of
the tax on packages of little cigars containing 20 or 25 little

cigars under Section 10-10 of this Act. These stamps shall be
the same stamps used for cigarettes under the Cigarette Tax
Act.
"Stamping distributor" means a distributor licensed under
this Act and also licensed as a distributor under the
Cigarette Tax Act or Cigarette Use Tax Act.
"Tobacco products" means any cigars, including little
cigars; cheroots; stogies; periques; granulated, plug cut,
crimp cut, ready rubbed, and other smoking tobacco; snuff
(including moist snuff) or snuff flour; cavendish; plug and
twist tobacco; fine-cut and other chewing tobaccos; shorts;
refuse scraps, clippings, cuttings, and sweeping of tobacco;
and other kinds and forms of tobacco, prepared in such manner
as to be suitable for chewing or smoking in a pipe or
otherwise, or both for chewing and smoking; but does not
include cigarettes as defined in Section 1 of the Cigarette
Tax Act or tobacco purchased for the manufacture of cigarettes
by cigarette distributors and manufacturers defined in the
Cigarette Tax Act and persons who make, manufacture, or
fabricate cigarettes as a part of a Correctional Industries
program for sale to residents incarcerated in penal
institutions or resident patients of a State operated mental
health facility.
Beginning on July 1, 2019, "tobacco products" also
includes electronic cigarettes.
"Wholesale price" means the established list price for

which a manufacturer sells tobacco products to a distributor,
before the allowance of any discount, trade allowance, rebate,
or other reduction. In the absence of such an established list
price, the manufacturer's invoice price at which the
manufacturer sells the tobacco product to unaffiliated
distributors, before any discounts, trade allowances, rebates,
or other reductions, shall be presumed to be the wholesale
price.
"Wholesaler" means any person, wherever resident or
located, engaged in the business of selling tobacco products
to others for the purpose of resale. "Wholesaler", when used
in this Act, does not include a person licensed as a
distributor under Section 10-20 of this Act unless expressly
stated in this Act.
(Source: P.A. 101-31, eff. 6-28-19; 101-593, eff. 12-4-19.)
Section 50. The Messages Tax Act is amended by changing
Section 6 as follows:
(35 ILCS 610/6) (from Ch. 120, par. 467.6)
Sec. 6. If it appears, after claim therefor filed with the
Department, that an amount of tax or penalty or interest has
been paid which was not due under this Act, whether as the
result of a mistake of fact or an error of law, except as
hereinafter provided, then the Department shall issue a credit
memorandum or refund to the person who made the erroneous

payment or, if that person has died or become a person under
legal disability, to his or her legal representative, as such.
If it is determined that the Department should issue a
credit or refund under this Act, the Department may first
apply the amount thereof against any amount of tax or penalty
or interest due hereunder from the person entitled to such
credit or refund. For this purpose, if proceedings are pending
to determine whether or not any tax or penalty or interest is
due under this Act from such person, the Department may
withhold issuance of the credit or refund pending the final
disposition of such proceedings and may apply such credit or
refund against any amount found to be due to the Department as
a result of such proceedings. The balance, if any, of the
credit or refund shall be issued to the person entitled
thereto.
If no tax or penalty or interest is due and no proceeding
is pending to determine whether such person is indebted to the
Department for tax or penalty or interest, the credit
memorandum or refund shall be issued to the claimant; or (in
the case of a credit memorandum) the credit memorandum may be
assigned and set over by the lawful holder thereof, subject to
reasonable rules of the Department, to any other person who is
subject to this Act, and the amount thereof shall be applied by
the Department against any tax or penalty or interest due or to
become due under this Act from such assignee.
As to any claim for credit or refund filed with the

Department on or after each January 1 and July 1, no amounts
erroneously paid more than 3 years prior to such January 1 and
July 1, respectively, shall be credited or refunded, except
that if both the Department and the taxpayer have agreed to an
extension of time to issue a notice of tax liability under this
Act, the claim may be filed at any time prior to the expiration
of the period agreed upon. Notwithstanding any other provision
of this Act to the contrary, for any period included in a claim
for credit or refund for which the statute of limitations for
issuing a notice of tax liability under this Act will expire
less than 6 months after the date a taxpayer files the claim
for credit or refund, the statute of limitations is
automatically extended for 6 months from the date it would
have otherwise expired.
Claims for credit or refund shall be filed upon forms
provided by the Department. As soon as practicable after any
claim for credit or refund is filed, the Department shall
examine the same and determine the amount of credit or refund
to which the claimant is entitled and shall notify the
claimant of such determination, which amount shall be prima
facie correct.
Any credit or refund that is allowed under this Act shall
bear interest at the rate and in the manner specified in the
Uniform Penalty and Interest Act.
In case the Department determines that the claimant is
entitled to a refund, such refund shall be made only from such

appropriation as may be available for that purpose. If it
appears unlikely that the amount appropriated would permit
everyone having a claim allowed during the period covered by
such appropriation to elect to receive a cash refund, the
Department, by rule or regulation, shall provide for the
payment of refunds in hardship cases and shall define what
types of cases qualify as hardship cases.
(Source: P.A. 90-491, eff. 1-1-98.)
Section 55. The Gas Revenue Tax Act is amended by changing
Section 6 as follows:
(35 ILCS 615/6) (from Ch. 120, par. 467.21)
Sec. 6. If it appears, after claim therefor filed with the
Department, that an amount of tax or penalty or interest has
been paid which was not due under this Act, whether as the
result of a mistake of fact or an error of law, except as
hereinafter provided, then the Department shall issue a credit
memorandum or refund to the person who made the erroneous
payment or, if that person has died or become a person under
legal disability, to his or her legal representative, as such.
If it is determined that the Department should issue a
credit or refund under this Act, the Department may first
apply the amount thereof against any amount of tax or penalty
or interest due hereunder from the person entitled to such
credit or refund. For this purpose, if proceedings are pending

to determine whether or not any tax or penalty or interest is
due under this Act from such person, the Department may
withhold issuance of the credit or refund pending the final
disposition of such proceedings and may apply such credit or
refund against any amount found to be due to the Department as
a result of such proceedings. The balance, if any, of the
credit or refund shall be issued to the person entitled
thereto.
If no tax or penalty or interest is due and no proceeding
is pending to determine whether such person is indebted to the
Department for tax or penalty or interest, the credit
memorandum or refund shall be issued to the claimant; or (in
the case of a credit memorandum) the credit memorandum may be
assigned and set over by the lawful holder thereof, subject to
reasonable rules of the Department, to any other person who is
subject to this Act, and the amount thereof shall be applied by
the Department against any tax or penalty or interest due or to
become due under this Act from such assignee.
As to any claim for credit or refund filed with the
Department on or after each January 1 and July 1, no amounts
erroneously paid more than 3 years prior to such January 1 and
July 1, respectively, shall be credited or refunded, except
that if both the Department and the taxpayer have agreed to an
extension of time to issue a notice of tax liability under this
Act, the claim may be filed at any time prior to the expiration
of the period agreed upon. Notwithstanding any other provision

of this Act to the contrary, for any period included in a claim
for credit or refund for which the statute of limitations for
issuing a notice of tax liability under this Act will expire
less than 6 months after the date a taxpayer files the claim
for credit or refund, the statute of limitations is
automatically extended for 6 months from the date it would
have otherwise expired.
Claims for credit or refund shall be filed upon forms
provided by the Department. As soon as practicable after any
claim for credit or refund is filed, the Department shall
examine the same and determine the amount of credit or refund
to which the claimant is entitled and shall notify the
claimant of such determination, which amount shall be prima
facie correct.
Any credit or refund that is allowed under this Act shall
bear interest at the rate and in the manner specified in the
Uniform Penalty and Interest Act.
In case the Department determines that the claimant is
entitled to a refund, such refund shall be made only from such
appropriation as may be available for that purpose. If it
appears unlikely that the amount appropriated would permit
everyone having a claim allowed during the period covered by
such appropriation to elect to receive a cash refund, the
Department, by rule or regulation, shall provide for the
payment of refunds in hardship cases and shall define what
types of cases qualify as hardship cases.

(Source: P.A. 90-491, eff. 1-1-98.)
Section 60. The Public Utilities Revenue Act is amended by
changing Section 6 as follows:
(35 ILCS 620/6) (from Ch. 120, par. 473)
Sec. 6. If it appears, after claim therefor filed with the
Department, that an amount of tax or penalty or interest has
been paid which was not due under this Act, whether as the
result of a mistake of fact or an error of law, except as
hereinafter provided, then the Department shall issue a credit
memorandum or refund to the person who made the erroneous
payment or, if that person has died or become a person under
legal disability, to his or her legal representative, as such.
If it is determined that the Department should issue a
credit or refund under this Act, the Department may first
apply the amount thereof against any amount of tax or penalty
or interest due hereunder from the person entitled to such
credit or refund. Any credit memorandum issued under the
Electricity Excise Tax Law may be applied against any
liability incurred under the tax previously imposed by Section
2 of this Act. For this purpose, if proceedings are pending to
determine whether or not any tax or penalty or interest is due
under this Act from such person, the Department may withhold
issuance of the credit or refund pending the final disposition
of such proceedings and may apply such credit or refund

against any amount found to be due to the Department as a
result of such proceedings. The balance, if any, of the credit
or refund shall be issued to the person entitled thereto.
If no tax or penalty or interest is due and no proceeding
is pending to determine whether such person is indebted to the
Department for tax or penalty or interest, the credit
memorandum or refund shall be issued to the claimant; or (in
the case of a credit memorandum) the credit memorandum may be
assigned and set over by the lawful holder thereof, subject to
reasonable rules of the Department, to any other person who is
subject to this Act, and the amount thereof shall be applied by
the Department against any tax or penalty or interest due or to
become due under this Act from such assignee.
As to any claim for credit or refund filed with the
Department on or after each January 1 and July 1, no amounts
erroneously paid more than 3 years prior to such January 1 and
July 1, respectively, shall be credited or refunded, except
that if both the Department and the taxpayer have agreed to an
extension of time to issue a notice of tax liability under this
Act, the claim may be filed at any time prior to the expiration
of the period agreed upon. Notwithstanding any other provision
of this Act to the contrary, for any period included in a claim
for credit or refund for which the statute of limitations for
issuing a notice of tax liability under this Act will expire
less than 6 months after the date a taxpayer files the claim
for credit or refund, the statute of limitations is

automatically extended for 6 months from the date it would
have otherwise expired.
Claims for credit or refund shall be filed upon forms
provided by the Department. As soon as practicable after any
claim for credit or refund is filed, the Department shall
examine the same and determine the amount of credit or refund
to which the claimant is entitled and shall notify the
claimant of such determination, which amount shall be prima
facie correct.
Any credit or refund that is allowed under this Act shall
bear interest at the rate and in the manner specified in the
Uniform Penalty and Interest Act.
In case the Department determines that the claimant is
entitled to a refund, such refund shall be made only from such
appropriation as may be available for that purpose. If it
appears unlikely that the amount appropriated would permit
everyone having a claim allowed during the period covered by
such appropriation to elect to receive a cash refund, the
Department, by rule or regulation, shall provide for the
payment of refunds in hardship cases and shall define what
types of cases qualify as hardship cases.
(Source: P.A. 90-491, eff. 1-1-98; 90-624, eff. 7-10-98.)
Section 65. The Water Company Invested Capital Tax Act is
amended by changing Section 6 as follows:

(35 ILCS 625/6) (from Ch. 120, par. 1416)
Sec. 6. If it appears, after claim therefor filed with the
Department, that an amount of tax or penalty or interest has
been paid which was not due under this Act, whether as the
result of a mistake of fact or an error of law, except as
hereinafter provided, then the Department shall issue a credit
memorandum or refund to the person who made the erroneous
payment or, if that person has died or become incompetent, to
his legal representative, as such.
If it is determined that the Department should issue a
credit or refund under this Act, the Department may first
apply the amount thereof against any amount of tax or penalty
or interest due hereunder from the person entitled to such
credit or refund. For this purpose, if proceedings are pending
to determine whether or not any tax or penalty or interest is
due under this Act from such person, the Department may
withhold issuance of the credit or refund pending the final
disposition of such proceedings and may apply such credit or
refund against any amount found to be due to the Department as
a result of such proceedings. The balance, if any, of the
credit or refund shall be issued to the person entitled
thereto.
If no tax or penalty or interest is due and no proceeding
is pending to determine whether such person is indebted to the
Department for tax or penalty or interest, the credit
memorandum or refund shall be issued to the claimant; or (in

the case of a credit memorandum) the credit memorandum may be
assigned and set over by the lawful holder thereof, subject to
reasonable rules of the Department, to any other person who is
subject to this Act, and the amount thereof shall be applied by
the Department against any tax or penalty or interest due or to
become due under this Act from such assignee.
As to any claim for credit or refund filed with the
Department on or after each January 1 and July 1, no amounts
erroneously paid more than 3 years prior to such January 1 and
July 1, respectively, shall be credited or refunded, except
that if both the Department and the taxpayer have agreed to an
extension of time to issue a notice of tax liability under this
Act, the claim may be filed at any time prior to the expiration
of the period agreed upon. Notwithstanding any other provision
of this Act to the contrary, for any period included in a claim
for credit or refund for which the statute of limitations for
issuing a notice of tax liability under this Act will expire
less than 6 months after the date a taxpayer files the claim
for credit or refund, the statute of limitations is
automatically extended for 6 months from the date it would
have otherwise expired.
Claims for credit or refund shall be filed upon forms
provided by the Department. As soon as practicable after any
claim for credit or refund is filed, the Department shall
examine the same and determine the amount of credit or refund
to which the claimant is entitled and shall notify the

claimant of such determination, which amount shall be prima
facie correct.
Any credit or refund that is allowed under this Section
shall bear interest at the rate and in the manner specified in
the Uniform Penalty and Interest Act.
In case the Department determines that the claimant is
entitled to a refund, such refund shall be made only from such
appropriation as may be available for that purpose. If it
appears unlikely that the amount appropriated would permit
everyone having a claim allowed during the period covered by
such appropriation to elect to receive a cash refund, the
Department, by rule or regulation, shall provide for the
payment of refunds in hardship cases and shall define what
types of cases qualify as hardship cases.
(Source: P.A. 90-491, eff. 1-1-98.)
Section 70. The Telecommunications Excise Tax Act is
amended by changing Section 10 as follows:
(35 ILCS 630/10) (from Ch. 120, par. 2010)
Sec. 10. If it shall appear that an amount of tax or
penalty or interest has been paid in error hereunder to the
Department by a taxpayer, as distinguished from the retailer,
whether such amount be paid through a mistake of fact or an
error of law, such taxpayer may file a claim for credit or
refund with the Department. If it shall appear that an amount

of tax or penalty or interest has been paid in error to the
Department hereunder by a retailer who is required or
authorized to collect and remit the tax imposed by this
Article, whether such amount be paid through a mistake of fact
or an error of law, such retailer may file a claim for credit
or refund with the Department, provided that no credit or
refund shall be allowed for any amount paid by any such
retailer unless it shall appear that he bore the burden of such
amount and did not shift the burden thereof to anyone else, or
unless it shall appear that he or she or his or her legal
representative has unconditionally repaid such amount to his
customer (1) who bore the burden thereof and has not shifted
such burden directly or indirectly in any manner whatsoever;
or (2) who, if he or she shifted such burden, has repaid
unconditionally such amount to his or her own customer; and
(3) who is not entitled to receive any reimbursement therefor
from any other source than from his retailer, nor to be
relieved of such burden in any other manner whatsoever.
If it is determined that the Department should issue a
credit or refund under this Article, the Department may first
apply the amount thereof against any amount of tax or penalty
or interest due hereunder from the person entitled to such
credit or refund. For this purpose, if proceedings are pending
to determine whether or not any tax or penalty or interest is
due under this Article from such person, the Department may
withhold issuance of the credit or refund pending the final

disposition of such proceedings and may apply such credit or
refund against any amount found to be due to the Department as
a result of such proceedings. The balance, if any, of the
credit or refund shall be issued to the person entitled
thereto.
If no tax or penalty or interest is due and no proceeding
is pending to determine whether such person is indebted to the
Department for tax or penalty or interest, the credit
memorandum or refund shall be issued to the claimant; or (in
the case of a credit memorandum) the credit memorandum may be
assigned and set over by the lawful holder thereof, subject to
reasonable rules of the Department, to any other person who is
subject to this Article, and the amount thereof shall be
applied by the Department against any tax or penalty or
interest due or to become due under this Article from such
assignee.
As to any claim for credit or refund filed with the
Department on or after each January 1 and July 1, no amounts
erroneously paid more than three years prior to such January 1
and July 1, respectively, shall be credited or refunded,
except that if both the Department and the taxpayer have
agreed to an extension of time to issue a notice of tax
liability under this Act, the claim may be filed at any time
prior to the expiration of the period agreed upon.
Notwithstanding any other provision of this Act to the
contrary, for any period included in a claim for credit or

refund for which the statute of limitations for issuing a
notice of tax liability under this Act will expire less than 6
months after the date a taxpayer files the claim for credit or
refund, the statute of limitations is automatically extended
for 6 months from the date it would have otherwise expired.
Claims for credit or refund shall be filed upon forms
provided by the Department. As soon as practicable after any
claim for credit or refund is filed, the Department shall
examine the same and determine the amount of credit or refund
to which the claimant is entitled and shall notify the
claimant of such determination, which amount shall be prima
facie correct.
A claim for credit or refund shall be considered to have
been filed with the Department on the date upon which it is
received by the Department. Upon receipt of any claim for
credit or refund filed under this Article, any officer or
employee of the Department, authorized in writing by the
Director of Revenue to acknowledge receipt of such claims on
behalf of the Department, shall execute on behalf of the
Department, and shall deliver or mail to the claimant or his
duly authorized agent, a written receipt, acknowledging that
the claim has been filed with the Department, describing the
claim in sufficient detail to identify it and stating the date
upon which the claim was received by the Department. Such
written receipt shall be prima facie evidence that the
Department received the claim described in such receipt and

shall be prima facie evidence of the date when such claim was
received by the Department. In the absence of such a written
receipt, the records of the Department as to when the claim was
received by the Department, or as to whether or not the claim
was received at all by the Department, shall be deemed to be
prima facie correct upon these questions in the event of any
dispute between the claimant (or his or her legal
representative) and the Department concerning these questions.
Any credit or refund that is allowed under this Article
shall bear interest at the rate and in the manner specified in
the Uniform Penalty and Interest Act.
In case the Department determines that the claimant is
entitled to a refund, such refund shall be made only from such
appropriation as may be available for that purpose. If it
appears unlikely that the amount appropriated would permit
everyone having a claim allowed during the period covered by
such appropriation to elect to receive a cash refund, the
Department by rule or regulation shall provide for the payment
of refunds in hardship cases and shall define what types of
cases qualify as hardship cases.
If a retailer who has failed to pay tax on gross charges
for telecommunications is required by the Department to pay
such tax, such retailer, without filing any formal claim with
the Department, shall be allowed to take credit against such
tax liability to the extent, if any, to which such retailer has
paid the tax to its vendor of the telecommunications which

such retailer purchased and used for resale, and no penalty or
interest shall be charged to such retailer on the amount of
such credit. However, when such credit is allowed to the
retailer by the Department, the vendor is precluded from
refunding any of the tax to the retailer and filing a claim for
credit or refund with respect thereto with the Department. The
provisions of this Section added by this amendatory Act of
1988 shall be applied retroactively, regardless of the date of
the transaction.
(Source: P.A. 90-491, eff. 1-1-98.)
Section 75. The Local Government Revenue Recapture Act is
amended by changing Sections 5-5, 5-10, 5-15, 5-20, 5-30,
5-35, 5-37, 10-15, 10-20, 10-30, 10-35, and 10-40 as follows:
(50 ILCS 355/5-5)
Sec. 5-5. Definitions. As used in this Article:
"Department" means the Department of Revenue.
"Family member" means the following, whether by whole
blood, half-blood, or adoption:
(1) a parent or step-parent;
(2) a child or step-child;
(3) a grandparent or step-grandparent;
(4) an aunt, uncle, great-aunt, or great-uncle;
(4.1) a niece, nephew, great-niece, or great-nephew;
(5) a sibling;

(6) a spouse or domestic partner; and
(7) the spouse or domestic partner of any person
referenced in items (1) through (5).
"Financial information" means the information provided to
the municipality or county by the Department under Section 11
of the Retailers' Occupation Tax Act that is reported to the
Department by a business located in a given municipality or
county.
"Person" means an individual, sole proprietorship,
corporation, registered limited liability partnership, limited
liability company, partnership, professional service
corporation, or any other form of organization.
"Misallocation" means tax paid by the taxpayer and
allocated to one unit of local government that should have
been allocated to a different unit of local government. This
includes misallocations discovered by a unit of local
government through the tax location verification process under
Section 8-11-16 of the Illinois Municipal Code and
misallocations discovered by the Department other than through
an audit of the taxpayer. "Misallocation" does not, however,
include any amount reported by a taxpayer in an amended return
or any amount discovered in an audit of the taxpayer by the
Department or discovered in an audit of the taxpayer by a
qualified practitioner under Article 10 of this Act.
"Misallocation" also does not include amounts overpaid by the
taxpayer and therefore not owed to any unit of local

government, nor amounts underpaid by the taxpayer and
therefore not previously allocated to any unit of local
government.
"Monitoring disbursements" means keeping track of payments
from the Department by a municipality, county, or third party
for the limited purpose of tracking previous misallocations.
"Third party" means a person, partnership, corporation, or
other entity or individual registered to do business in
Illinois who contracts with a municipality or county to review
financial information related to the disbursement of local
taxes by the Department to the municipality or county.
(Source: P.A. 101-628, eff. 6-1-20.)
(50 ILCS 355/5-10)
Sec. 5-10. Contracts with third parties. A municipality or
county that receives a disbursement of tax proceeds from the
Department may contract with a third party for the purpose of
ensuring that the municipality or county receives the correct
disbursement from the Department and monitoring disbursements.
The third party may not contact the Department on behalf of the
municipality or county, but instead must work directly with
the municipality or county to acquire financial information. A
third party may, however, directly access a municipality's or
county's financial information that is provided by the
Department by electronic means under Section 11 of the
Retailers' Occupation Tax Act, provided that the third party

meets all other conditions under this Section for the receipt
of financial information. To be eligible to receive financial
information from the municipality or county, the third party
must:
(1) enter into a confidentiality agreement with the
municipality or county in the form and manner required by
the Department prior to receiving the financial
information;
(2) have an existing contract with the municipality or
county at the time the third party enters into the
confidentiality agreement with the municipality or county;
a copy of that existing contract must be on file with the
Department;
(3) abide by the same conditions as the municipality
or county with respect to the furnishing of financial
information under Section 11 of the Retailers' Occupation
Tax Act; and
(4) be registered with the Department as required by
Section 5-35 of this Act.
(Source: P.A. 101-628, eff. 6-1-20.)
(50 ILCS 355/5-15)
Sec. 5-15. Financial information. The third party may use
the financial information it receives from the contracting
municipality or county only for the purpose of providing
services to the municipality or county as specified in this

Act and may not use the information for any other purpose.
Electronic data submitted to third parties or by the
contracting municipality or county must be accessible only to
third parties who have entered into a confidentiality
agreement with the municipality or county or who have an
existing contract with the municipality or county.
(Source: P.A. 101-628, eff. 6-1-20.)
(50 ILCS 355/5-20)
Sec. 5-20. Retention, collection, disclosure, and
destruction of financial information.
(a) A third party in possession of a taxpayer's financial
information must permanently destroy that financial
information pursuant to this Act. The financial information
shall be destroyed upon the soonest of the following to occur:
(1) if the taxpayer is not referred to the Department,
within 30 days after receipt of the taxpayer's financial
information from either the municipality or county, unless
the third party is monitoring disbursements from the
Department on an ongoing basis for a municipality or
county, in which case, the financial information shall be
destroyed no later than 3 years after receipt; or
(2) within 30 days after the Department receives a
taxpayer audit referral from a third party referring the
taxpayer to the Department for additional review.
(b) No third party in possession of financial information

may sell, lease, trade, market, or otherwise utilize or profit
from a taxpayer's financial information. The , except for a
fee as negotiated by the municipality or county may, however,
negotiate a fee with the third party. The fee may be in the
form of a contingency fee for a percentage of the amount of
additional distributions the municipality or county receives
for no more than 3 years following the first disbursement to
the municipality or county as a result of the services of the
third party under this Act.
(c) No third party may permanently or temporarily collect,
capture, purchase, use, receive through trade, or otherwise
retain a taxpayer's financial information beyond the scope of
subsection (a) of this Section.
(d) No third party in possession of confidential
information may disclose, redisclose, share, or otherwise
disseminate a taxpayer's financial information.
(e) A third party must dispose of the materials containing
financial information in a manner that renders the financial
information unreadable, unusable, and undecipherable. Proper
disposal methods include, but are not limited to, the
following:
(1) in the case of paper documents, burning,
pulverizing, or shredding so that the information cannot
practicably be read or reconstructed; and
(2) in the case of electronic media and other
non-paper media containing information, destroying or

erasing so that information cannot practicably be read,
reconstructed, or otherwise utilized by the third party or
others.
(Source: P.A. 101-628, eff. 6-1-20.)
(50 ILCS 355/5-30)
Sec. 5-30. Posting results. Annually, the third party
shall provide the municipality or county with a final summary
of the review for publication. It is the responsibility of the
third party to ensure that this summary includes no personal
or identifying information of taxpayers and that all such
taxpayer information is kept confidential. If the summary
includes any discussion of tax revenue, it shall include only
aggregate amounts by tax type, and shall in no way include
information about an individual return or an individual
taxpayer, even with identifying information redacted. No
aggregated data may be published that includes taxpayer
information for 4 or fewer taxpayers. In addition, due to the
preliminary nature of such a summary based only on unaudited
financial information, no claim of specific tax savings or
revenue generation may be made in the summary.
(Source: P.A. 101-628, eff. 6-1-20.)
(50 ILCS 355/5-35)
Sec. 5-35. Third party registration.
(a) Beginning on January 1, 2021, no person shall engage

in business as a third party pursuant to this Act in this State
without first having registered with the Department.
Application for registration or renewal of registration shall
be made to the Department, by electronic means, in a form and
at the time prescribed by the Department. Each applicant for
registration or renewal of registration under this Section
shall furnish to the Department, in an electronic format
established by the Department, the following information:
(1) the name and address of the applicant;
(2) the address of the location at which the applicant
proposes to engage in business as a third party in this
State;
(3) valid and updated contact information;
(4) attestation of good standing to do business in
Illinois;
(5) a copy of each contract it has entered into with a
municipality or county; if an applicant has a contract
with a municipality or county prior to the effective date
of this Act, a copy of all existing contracts must be
provided;
(6) an annual certification of process letter that:
(A) is signed by an attorney or certified public
accountant licensed and authorized to practice in the
State of Illinois;
(B) contains findings that, after due diligence,
the author is of the opinion that:

(i) the third party's confidentiality
standards for storing encrypted data at rest,
using a cryptographic algorithm, conform to
Security Level 1 of the Federal Information
Processing Standard (FIPS) Publication 140-2, or
conform to similar security requirements contained
in any successor publication;
(ii) the third party uses multi-factor
authentication;
(iii) the third party uses HTTPS with at least
TLS 1.2 or its successor to protect the data files
while in transit between a browser and server;
(iv) the third party adheres to best practices
as recommended by the Open Web Application
Security Project (OWASP);
(v) the third party has a firewall which
protects against unauthorized use of the data; and
(vi) the third party shall maintain a physical
location in this State at all times; if, at any
time, the third party fails to have a physical
location in this State, the third party's
registration shall be revoked; and
(7) such other additional information as the
Department may require by rule.
The annual registration fee payable to the Department for
each third party shall be $15,000. The fee shall be deposited

into the Tax Compliance and Administration Fund and shall be
used for the cost of administering the certified audit pilot
project under Article 10.
Each applicant shall pay the fee to the Department at the
time of submitting its application or renewal to the
Department. The Department may require an applicant under this
Section to electronically file and pay the fee.
(b) The following are ineligible to register as a third
party under this Act:
(1) a person who has been convicted of a felony
related to financial crimes under any federal or State
law, if the Department, after investigation and a hearing
if requested by the applicant, determines that the person
has not been sufficiently rehabilitated to warrant the
public trust, including an individual or any employee,
officer, manager, member, partner, or director of an
entity that has been convicted as provided in this
paragraph (1);
(2) a person, if any employee, contractual employee,
officer, manager, or director thereof, or any person or
persons owning in the aggregate more than 5% thereof, is
employed by or appointed or elected to the corporate
authorities of any municipality or county in this State;
(3) a person, if any employee, contractual employee,
officer, manager, or director thereof, or any person or
persons owning in the aggregate more than 5% thereof, is

not or would not be eligible to receive a certificate of
registration under this Act or a license under the
Illinois Public Accounting Act for any reason;
(4) a person who is a family member of any person who
is employed by or appointed or elected to the corporate
authorities of any municipality or county in the State;
(5) a person who is a qualified practitioner, as
defined by Section 10-15 of this Act;
(6) a third party owned, in whole or in part, by any
entity that competes directly or indirectly with any
taxpayer whose financial information they are seeking or
receiving; and
(7) a third party owning in whole or in part, directly
or indirectly, any entity that competes, directly or
indirectly, with any taxpayer whose financial information
they are seeking or receiving.
(c) The Department shall begin accepting applications no
later than January 1, 2021. Upon receipt of an application and
registration fee in proper form from a person who is eligible
to register as a third party under this Act, the Department
shall issue, within 60 days after receipt of an application, a
certificate of registration to such applicant in such form as
prescribed by the Department. That certificate of registration
shall permit the applicant to whom it is issued to engage in
business as a third party under this Act. All certificates of
registration issued by the Department under this Section shall

be valid for a period not to exceed one year after issuance
unless sooner revoked or suspended as provided in this Act. No
certificate of registration issued under this Section is
transferable or assignable. A person who obtains a certificate
of registration as a third party who ceases to do business as
specified in the certificate of registration, or who never
commenced business, or whose certificate of registration is
suspended or revoked, shall immediately surrender the
certificate of registration to the Department.
(d) Any person aggrieved by any decision of the Department
under this Section may, within 60 days after notice of the
decision, protest and request a hearing. Upon receiving a
request for a hearing, the Department shall give written
notice to the person requesting the hearing of the time and
place fixed for the hearing and shall hold a hearing and then
issue its final administrative decision in the matter to that
person within 60 days after the date of the hearing or at a
later date upon agreement of all of the parties. In the absence
of a protest and request for a hearing within 60 days, the
Department's decision shall become final without any further
determination being made or notice given.
(e) All final decisions by the Department under this
Section are subject to judicial review under the provisions of
the Administrative Review Law.
(Source: P.A. 101-628, eff. 6-1-20.)

(50 ILCS 355/5-37)
Sec. 5-37. Insurance policy requirement. A third party is
required to file and maintain in force an insurance policy
issued by an insurance company authorized to transact fidelity
and surety business in the State of Illinois. The insurance
policy shall be for coverage of potential legal claims,
including, but by not limited to, penalties set forth under
Section 5-60, embezzlement, dishonesty, fraud, omissions or
errors, or other financial wrongdoing in the course of
providing services. The policy shall be in the form prescribed
by the Department in the sum of $500,000. The policy shall be
continuous in form and run concurrently with the original and
each renewal certification period unless terminated by the
insurance company. An insurance company may terminate a policy
and avoid further liability by filing a 60-day notice of
termination with the Department and at the same time sending
the same notice to the licensee. A licensee that receives a
notice of termination must promptly notify each municipality
and county with whom it has a contract under this Act of the
notice of termination. A license shall be canceled on the
termination date of the policy unless a new policy is filed
with the Department and becomes effective at the termination
date of the prior policy. If a policy has been canceled under
this Section, the third party must file a new application and
will be considered a new applicant if it obtains a new policy.
(Source: P.A. 101-628, eff. 6-1-20.)

(50 ILCS 355/10-15)
Sec. 10-15. Definitions. As used in this Article:
"Audit" means an agreed-upon procedures engagement in
accordance with Statements on Standards for the Attestation
Engagements (AICPA Professional Standards, AT-C Section 315
(Compliance Attestation Attest)).
"Certification program" means an instructional curriculum,
examination, and process for certification, recertification,
and revocation of certification of certified public
accountants that is administered by the Department with the
assistance of the Illinois CPA Society and that is officially
approved by the Department to ensure that a certified public
accountant possesses the necessary skills and abilities to
successfully perform an attestation engagement for a
limited-scope tax compliance review in a certified audit
project under this Act.
"Department" means the Department of Revenue.
"Family member" means the following, whether by whole
blood, half-blood, or adoption:
(1) a parent or step-parent;
(2) a child or step-child;
(3) a grandparent or step-grandparent;
(4) an aunt, uncle, great-aunt, or great-uncle;
(4.1) a niece, nephew, great-niece, or great-nephew;
(5) a sibling;

(6) a spouse or domestic partner; and
(7) the spouse or domestic partner of any person
referenced in items (1) through (5).
"Misallocation" means tax paid by the taxpayer and
allocated to one unit of local government that should have
been allocated to a different unit of local government. This
includes misallocations discovered by a unit of local
government through the tax location verification process under
Section 8-11-16 of the Illinois Municipal Code and
misallocations discovered by the Department other than through
an audit of the taxpayer. "Misallocation" does not, however,
include any amount reported by a taxpayer in an amended return
or any amount discovered in an audit of the taxpayer by the
Department or discovered in an audit of the taxpayer by a
qualified practitioner under Article 10 of this Act.
"Misallocation" also does not include amounts overpaid by the
taxpayer and therefore not owed to any unit of local
government, nor amounts underpaid by the taxpayer and
therefore not previously allocated to any unit of local
government.
"Participating taxpayer" means any person subject to the
revenue laws administered by the Department who is the subject
of a tax compliance referral by a municipality, county, or
third party, who enters into an engagement with a qualified
practitioner for a limited-scope tax compliance review under
this Act, and who is approved by the Department under the local

government revenue recapture certified audit pilot project.
"Qualified practitioner" means a certified public
accountant who is licensed or registered to perform
accountancy activities in Illinois under Section 8.05 of the
Illinois Public Accounting Act and who has met all
requirements for the local government revenue recapture
certified audit training course, achieved the required score
on the certification test as approved by the Department, and
been certified by the Department. "Qualified practitioner"
does not include a third party, as defined by Section 5-5 of
this Act, or any employee, contractual employee, officer,
manager, or director thereof, any person or persons owning in
the aggregate more than 5% of such third party, or a person who
is a family member of any person who is employed by or is an
appointed or elected member of any corporate authorities, as
defined in the Illinois Municipal Code.
(Source: P.A. 101-628, eff. 6-1-20; revised 8-20-20.)
(50 ILCS 355/10-20)
Sec. 10-20. Local government revenue recapture certified
audit project.
(a) The Department shall initiate a certified audit pilot
project to further enhance tax compliance reviews performed by
qualified practitioners and to encourage taxpayers to hire
qualified practitioners at their own expense to review and
report on certain aspects of their sales tax and use tax

compliance in cases where the Department has notified the
taxpayer that it has received a tax compliance referral from a
municipality, county, or third party under this Act. The
nature of the certified audit work performed by qualified
practitioners shall be agreed-upon procedures of a Compliance
Attestation in which the Department is the specified user of
the resulting report. Qualified practitioners are prohibited
from using information obtained from audit manuals, training
materials, or any other materials provided by the Department
under this Act for any purpose other than to perform the tax
compliance reviews under the certified audit pilot program
under this Act.
The tax compliance reviews shall be limited in scope and
may include only: (i) whether the taxpayer is reporting
receipts in the proper jurisdiction; (ii) whether tangible
personal property asset purchases that were used or consumed
by the taxpayer were taxed properly; (iii) an evaluation of
sales reported as exempt from tax; (iv) whether the proper tax
rate was charged; (v) whether the tax was properly reported as
retailers' occupation tax or use tax; and (vi) any other
factor that impacts the Department's allocation of sales and
use tax revenues to the jurisdiction in which the taxpayer
reports sales or use tax.
(b) As an incentive for taxpayers to incur the costs of a
certified audit, the Department shall abate penalties due on
any tax liabilities revealed by a certified audit, except that

this authority to abate penalties shall not apply to any
liability for taxes that were collected by the participating
taxpayer but not remitted to the Department, nor shall the
Department have the authority to abate fraud penalties.
(c) The certified audit pilot project shall apply only to
taxpayers who have been notified that an audit referral has
been received by the Department under this Act and only to
occupation and use taxes administered and collected by the
Department.
(c-5) The Department shall charge a fee of $2,500 to each
participant in the certification program under this Article.
(d) The certified audit pilot project shall begin with
audit referrals received on and after January 1, 2021. Upon
obtaining proper certification, qualified practitioners may
initiate certified audits beginning January 1, 2021.
(Source: P.A. 101-628, eff. 6-1-20.)
(50 ILCS 355/10-30)
Sec. 10-30. Local government revenue recapture audit
referral.
(a) A third party shall not refer a taxpayer to the
Department for audit consideration unless the third party is
registered with the Department pursuant to Section 5-35.
(b) If, based on a review of the financial information
provided by the Department to a municipality or county, or
provided by a municipality or county to a registered third

party, the municipality or county discovers that a taxpayer
may have underpaid local retailers' or service occupation
taxes, then it may refer the matter to the Department for audit
consideration. The tax compliance referral may be made only by
the municipality, county, or third party and shall be made in
the form and manner required by the Department, including any
requirement that the referral be submitted electronically. The
tax compliance referral shall, at a minimum, include proof of
registration as a third party, a copy of a contract between the
third party and the county or municipality, the taxpayer's
name, Department account identification number, mailing
address, and business location, and the specific reason for
the tax compliance referral, including as much detail as
possible.
(c) The Department shall complete its evaluation of all
audit referrals under this Act within 90 60 days after receipt
of the referral and shall handle all audit referrals as
follows:
(1) the Department shall evaluate the referral to
determine whether it is sufficient to warrant further
action based on the information provided in the referral,
any other information the Department possesses, and audit
selection procedures of the Department;
(2) if the Department determines that the referral is
not actionable, then the Department shall notify the local
government that it has evaluated the referral and has

determined that no action is deemed necessary and provide
the local government with an explanation for that
decision, including, but not limited to an explanation
that (i) the Department has previously conducted an audit;
(ii) the Department is in the process of conducting an
investigation or other examination of the taxpayer's
records; (iii) the taxpayer has already been referred to
the Department and the Department determined an audit
referral is not actionable; (iv) the Department or a
qualified practitioner has previously conducted an audit
after referral under this Section 10-30; or (v) for just
cause;
(3) if the Department determines that the referral is
actionable, then it shall determine whether the taxpayer
is currently under audit or scheduled for audit by the
Department;
(A) if the taxpayer is not currently under audit
by the Department or scheduled for audit by the
Department, the Department shall determine whether it
will schedule the taxpayer for audit; and
(B) if the taxpayer is not under audit by the
Department or scheduled for audit by the Department
and the Department decides under subparagraph (A) not
to schedule the taxpayer for audit by the Department,
then the Department shall notify the taxpayer that the
Department has received an actionable audit referral

on the taxpayer and issue a notice to the taxpayer as
provided under subsection (d) of this Section.
(d) The notice to the taxpayer required by subparagraph
(B) of paragraph (3) of subsection (c) shall include, but not
be limited to, the following:
(1) that the taxpayer must either: (A) engage a
qualified practitioner, at the taxpayer's expense, to
complete a certified audit, limited in scope to the
taxpayer's Retailers' Occupation Tax, Use Tax, Service
Occupation Tax, or Service Use Tax liability, and the
taxpayer's liability for any local retailers' or service
occupation tax administered by the Department; or (B) be
subject to audit by the Department;
(2) that, as an incentive, for taxpayers who agree to
the limited-scope certified audit, the Department shall
abate penalties as provided in Section 10-20; and
(3) A statement that reads: "[INSERT THE NAME OF THE
ELECTED CHIEF EXECUTIVE OF THE CORPORATE AUTHORITY] has
contracted with [INSERT THIRD PARTY] to review your
Retailers' Occupation Tax, Use Tax, Service Occupation
Tax, Service Use Tax, and any local retailers' or service
occupation taxes reported to the Illinois Department of
Revenue ("Department"). [INSERT THE NAME OF THE ELECTED
CHIEF EXECUTIVE OF THE CORPORATE AUTHORITY] and [INSERT
THE THIRD PARTY] have selected and referred your business
to the Department for a certified audit of your Retailers'

Occupation Tax, Use Tax, Service Occupation Tax, Service
Use Tax, and any local retailers' or service occupation
taxes reported to the Department pursuant to the Local
Government Revenue Recapture Act. The purpose of the audit
is to verify that your business reported and submitted the
proper Retailers' Occupation Tax, Use Tax, Service
Occupation Tax, Service Use Tax, and any local retailers'
or service occupation taxes administered by the
Department. The Department is required to disclose your
confidential financial information to [INSERT THE NAME OF
THE ELECTED CHIEF EXECUTIVE OF THE CORPORATE AUTHORITY]
and [INSERT THE THIRD PARTY]. Additional information can
be accessed from the Department's website and publications
for a basic overview of your rights as a Taxpayer. If you
have questions regarding your business's referral to the
Department for audit, please contact [CORPORATE
AUTHORITY'S] mayor, village president, or any other person
serving as [CORPORATE AUTHORITY'S] chief executive officer
or chief financial officer. [INSERT THIRD PARTY] is
prohibited from discussing this matter with you directly
or indirectly in any manner regardless of who initiates
the contact. If [INSERT THIRD PARTY] contacts you, please
contact the Department.".
(e) Within 90 days after notice by the Department, the
taxpayer must respond by stating in writing whether it will or
will not arrange for the performance of a certified audit

under this Act. If the taxpayer states that it will arrange for
the performance of a certified audit, then it must do so within
60 days after responding to the Department or within 90 days
after notice by the Department, whichever comes first. If the
taxpayer states that it will not arrange for the performance
of a certified audit or if the taxpayer does not arrange for
the performance of a certified audit within 180 days after
notice by the Department, then the Department may schedule the
taxpayer for audit by the Department.
(f) The certified audit must not be a contingent-fee
engagement and must be completed in accordance with this
Article 10.
(Source: P.A. 101-628, eff. 6-1-20.)
(50 ILCS 355/10-35)
Sec. 10-35. Notification by qualified practitioner.
(a) A qualified practitioner hired by a taxpayer who
elects to perform a certified audit under Section 10-30 shall
notify the Department of an engagement to perform a certified
audit and shall provide the Department with the information
the Department deems necessary to identify the taxpayer, to
confirm that the taxpayer is not already under audit by the
Department, and to establish the basic nature of the
taxpayer's business and the taxpayer's potential exposure to
Illinois occupation and use tax laws. The information provided
in the notification shall be submitted in the form and manner

required by the Department and shall include the taxpayer's
name, federal employer identification number or social
security number, Department account identification number,
mailing address, and business location, and the specific
occupation and use taxes and period proposed to be covered by
the engagement for the certified audit. In addition, the
notice shall include the name, address, identification number,
contact person, and telephone number of the engaged firm. An
engagement for a qualified practitioner to perform a certified
audit under this Act shall not be authorized by the Department
unless the taxpayer received notice from the Department under
subparagraph (B) (b) of paragraph (3) of subsection (c) of
Section 10-30.
(b) If the taxpayer has received notice of an audit
referral from the Department and has not been issued a written
notice of intent to conduct an audit, the taxpayer shall be a
participating taxpayer and the Department shall so advise the
qualified practitioner in writing within 10 days after receipt
of the engagement notice. However, the Department may exclude
a taxpayer from a certified audit or may limit the taxes or
periods subject to the certified audit on the basis that: (i)
the Department has previously conducted an audit; (ii) the
Department is in the process of conducting an investigation or
other examination of the taxpayer's records; (iii) the
taxpayer has already been referred to the Department pursuant
to Section 10-30 and the Department determined an audit

referral is not actionable; (iv) the Department or a qualified
practitioner has previously conducted an audit under Section
10-30 of this Act; or (v) for just cause.
(c) Within 30 days after receipt of the notice of
qualification from the Department under subsection (b), the
qualified practitioner shall contact the Department and
submit, for review and agreement by the Department, a proposed
audit plan and procedures. The Department may extend the time
for submission of the plan and procedures for reasonable
cause. The qualified practitioner shall initiate action to
advise the Department that amendment or modification of the
plan and procedures is necessary if the qualified
practitioner's inspection reveals that the taxpayer's
circumstances or exposure to the revenue laws is substantially
different from those described in the engagement notice.
(Source: P.A. 101-628, eff. 6-1-20.)
(50 ILCS 355/10-40)
Sec. 10-40. Audit performance and review.
(a) Upon the Department's designation of the agreed-upon
procedures to be followed by a practitioner in a certified
audit, the qualified practitioner shall perform the engagement
and shall timely submit a completed report to the Department
in the form and manner required by the Department and
professional standards. The report shall affirm completion of
the agreed-upon procedures and shall provide any required

disclosures.
(b) The Department shall review the report of the
certified audit and shall accept it when it is determined to be
complete by the qualified practitioner. Once the report is
accepted by the Department, the Department shall issue a
notice of proposed assessment reflecting the determination of
any additional liability reflected in the report and shall
provide the taxpayer with all the normal payment, protest, and
appeal rights with respect to any the liability reflected in
the report, including the right to a review by the Informal
Conference Board. In cases in which the report indicates an
overpayment has been made, the taxpayer shall submit a
properly executed claim for credit or refund to the
Department. Otherwise, the certified audit report is a final
and conclusive determination with respect to the tax and
period covered. No additional assessment may be made by the
Department for the specific taxes and period referenced in the
report, except upon a showing of fraud or material
misrepresentation. This determination shall not prevent the
Department from collecting liabilities not covered by the
report or from conducting an audit or investigation and making
an assessment for additional tax, penalty, or interest for any
tax or period not covered by the report.
(c) Any A notice of proposed assessment issued by the
Department under this Act is subject to the statute of
limitations for assessments under the Retailers' Occupation

Tax Act, the Use Tax Act, the Service Occupation Tax Act, the
Service Use Tax Act, and any local retailers' or service
occupation tax, as appropriate, and local taxes collected on
assessments issued shall be allocated to units of local
government for the full period of the statute of limitations
in accordance with those Acts and any applicable local
retailers' or service occupation tax Act. The Department shall
provide notice in writing to the municipality or county and
the third party, if applicable, of any audit findings,
determinations, or collections once finalized, but limited to
the amount of additional liability, if any, for distribution
to the municipality or county as part of the municipality's or
county's share of the State Retailers' Occupation Tax or
Service Occupation Tax or under the municipality's or county's
locally imposed retailer's or service occupation tax.
Claims for credit or refund filed by taxpayers under this
Act are subject to the statute of limitations under the
Retailers' Occupation Tax Act, the Use Tax Act, the Service
Occupation Tax Act, the Service Use Tax Act, and any local
retailers' or service occupation tax Act, as appropriate, and
any credit or refund of local taxes allowed to the taxpayer
shall be de-allocated from units of local government for the
full period of the statute of limitations in accordance with
those Acts and any applicable local retailers' or service
occupation tax Act.
If a reallocation of tax from one unit of local government

to another occurs as a result of an amended return filed by a
taxpayer or an audit of a taxpayer, the Department shall make
the reallocation for the full period of the statute of
limitations under the Retailers' Occupation Tax Act, the Use
Tax Act, the Service Occupation Tax Act, the Service Use Tax
Act, and any applicable local retailer's or service occupation
tax Act.
With respect to misallocations discovered under this Act,
the Department shall increase or decrease the amount allocated
to a unit of local government by an amount necessary to offset
any misallocation of previous disbursements. The offset amount
shall be the amount erroneously disbursed within the previous
6 months from the time a misallocation is discovered.
(d) Under no circumstances may a person, including a
municipality or county or third party, other than the person
audited and his or her attorney, have any right to participate
in an appeal or other proceeding regarding the audit,
participate in settlement negotiations, challenge the validity
of any settlement between the Department and any person, or
review any materials, other than financial information as
otherwise provided in this Act, that are subject to the
confidentiality provisions of the underlying tax Act. In
addition, the Department's determination of whether to audit a
taxpayer or the result of the audit creates no justiciable
cause of action, and any adjudication related to this program
is limited to the taxpayer's rights in an administrative

hearing held by the Department, an administrative hearing held
by the Illinois Independent Tax Tribunal, or related to
payments made under protest as provided in Section 2a.1 of the
State Officers and Employees Money Disposition Act, as
appropriate.
(Source: P.A. 101-628, eff. 6-1-20.)
Section 80. The Liquor Control Act of 1934 is amended by
changing Section 8-3 as follows:
(235 ILCS 5/8-3) (from Ch. 43, par. 159a)
Sec. 8-3. If it appears, after claim therefor filed with
the Department, that an amount of tax or penalty or interest
has been paid which was not due under this Article, whether as
the result of a mistake of fact or an error of law, except as
hereinafter provided, then the Department shall issue a credit
memorandum or refund to the person who made the erroneous
payment or, if that person died or became a person under legal
disability, to his or her legal representative, as such.
If it is determined that the Department should issue a
credit or refund under this Article, the Department may first
apply the amount thereof against any amount of tax or penalty
or interest due hereunder from the person entitled to such
credit or refund. For this purpose, if proceedings are pending
to determine whether or not any tax or penalty or interest is
due under this Article from such person, the Department may

withhold issuance of the credit or refund pending the final
disposition of such proceedings and may apply such credit or
refund against any amount found to be due to the Department as
a result of such proceedings. The balance, if any, of the
credit or refund shall be issued to the person entitled
thereto.
If no tax or penalty or interest is due and no proceeding
is pending to determine whether such taxpayer is indebted to
the Department for tax or penalty or interest the credit
memorandum or refund shall be issued to the claimant; or (in
the case of a credit memorandum) the credit memorandum may be
assigned and set over by the lawful holder thereof, subject to
reasonable rules of the Department, to any other person who is
subject to this Article, and the amount thereof shall be
applied by the Department against any tax or penalty or
interest due or to become due under this Article from such
assignee.
As to any claim filed hereunder with the Department on and
after each January 1 and July 1, no amount of tax or penalty or
interest, erroneously paid (either in total or partial
liquidation of a tax or penalty or interest under this
Article) more than 3 years prior to such January 1 and July 1,
respectively, shall be credited or refunded. Notwithstanding
any other provision of this Act to the contrary, for any period
included in a claim for credit or refund for which the statute
of limitations for issuing a notice of tax liability under

this Act will expire less than 6 months after the date a
taxpayer files the claim for credit or refund, the statute of
limitations is automatically extended for 6 months from the
date it would have otherwise expired.
Any credit or refund that is allowed under this Act shall
bear interest at the rate and in the manner specified in the
Uniform Penalty and Interest Act.
In case the Department determines that the claimant is
entitled to a refund, such refund shall be made only from such
appropriation as may be available for that purpose. If it
appears unlikely that the amount appropriated would permit
everyone having a claim allowed during the period covered by
such appropriation to elect to receive a cash refund, the
Department, by rule or regulation, shall provide for the
payment of refunds in hardship cases and shall define what
types of cases qualify as hardship cases.
(Source: P.A. 87-205.)