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| [ Introduced ] | [ Engrossed ] | [ House Amendment 001 ] |
92_SB0055sam001
LRB9203552SMdvam01
1 AMENDMENT TO SENATE BILL 55
2 AMENDMENT NO. . Amend Senate Bill 55 by replacing
3 the title with the following:
4 "AN ACT concerning taxes."; and
5 by replacing everything after the enacting clause with the
6 following:
7 "Section 5. The Use Tax Act is amended by adding Section
8 3-46 as follows:
9 (35 ILCS 105/3-46 new)
10 Sec. 3-46. Bad Debts.
11 (a) A retailer is relieved from liability for the tax
12 under this Act that became due and payable, insofar as the
13 measure of the tax is represented by accounts that have been
14 found to be worthless and charged off for income tax purposes
15 by the retailer or, if the retailer is not required to file
16 income tax returns, charged off in accordance with generally
17 accepted accounting principles. A retailer that has
18 previously paid the tax may, under rules adopted by the
19 Department, take as a deduction the amount found worthless
20 and charged off by the retailer. If these accounts are
21 thereafter in whole or in part collected by the retailer, the
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1 amount collected shall be included in the first return filed
2 after the collection and the tax shall be paid with the
3 return. For purposes of this subdivision, the term
4 "retailer" includes any entity affiliated with the retailer
5 under Section 1504 of Title 26 of the United States Code.
6 (b) (1) In the case of accounts held by a lender, a
7 retailer or lender who makes a proper election under
8 subdivision (b)(4) shall be entitled to a deduction or
9 refund of the tax that the retailer has previously
10 reported and paid if all of the following conditions are
11 met:
12 (A) No deduction is claimed or allowed for any
13 portion of the account for which a previous
14 deduction was claimed or allowed.
15 (B) The accounts have been found worthless and
16 written off by the lender in accordance with the
17 requirements of subsection (a).
18 (C) The account was written off as a bad debt
19 on or after January 1, 2001.
20 (D) The party electing to claim the deduction
21 or refund under subdivision (b)(4) files a claim in
22 a manner prescribed by the Department.
23 (2) If the retailer or the lender thereafter
24 collects in whole or in part any accounts, one of the
25 following shall apply:
26 (A) If the retailer is entitled to the
27 deduction or refund under the election specified in
28 subdivision (b)(4), the retailer shall include the
29 amount collected in its first return filed after the
30 collection and pay tax on that amount with the
31 return.
32 (B) If the lender is entitled to the deduction
33 or refund under the election specified in
34 subdivision (b)(4), the lender shall pay the tax to
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1 the Department.
2 (3) For purposes of this subsection (b), the term
3 "lender" means any of the following:
4 (A) Any person who holds a retail account
5 which that person purchased directly from a retailer
6 who reported the tax.
7 (B) Any person who holds a retail account
8 pursuant to that person's contract directly with the
9 retailer who reported the tax.
10 (C) Any person who is either an affiliated
11 entity, under Section 1504 of Title 26 of the United
12 States Code, of a person described in subdivision
13 (3)(A) or (3)(B), or an assignee of a person
14 described in subdivision (3)(A) or (3)(B).
15 (4) Prior to claiming any deduction or refund under
16 this subsection (b), the retailer who reported the tax
17 and the lender shall file an election with the
18 Department, signed by both parties, designating which
19 party is entitled to claim the deduction or refund. This
20 election may not be amended or revoked unless a new
21 election, signed by both parties, is filed with the
22 Department.
23 (5) A lender as defined above may have its
24 deduction or refund for bad debts claimed on a return
25 filed by an affiliated retailer.
26 Section 10. The Service Use Tax Act is amended by adding
27 Section 3-41 as follows:
28 (35 ILCS 110/3-41 new)
29 Sec. 3-41. Bad debts.
30 (a) A retailer is relieved from liability for the tax
31 under this Act that became due and payable, insofar as the
32 measure of the tax is represented by accounts that have been
-4- LRB9203552SMdvam01
1 found to be worthless and charged off for income tax purposes
2 by the retailer or, if the retailer is not required to file
3 income tax returns, charged off in accordance with generally
4 accepted accounting principles. A retailer that has
5 previously paid the tax may, under rules adopted by the
6 Department, take as a deduction the amount found worthless
7 and charged off by the retailer. If these accounts are
8 thereafter in whole or in part collected by the retailer, the
9 amount collected shall be included in the first return filed
10 after the collection and the tax shall be paid with the
11 return. For purposes of this subdivision, the term
12 "retailer" includes any entity affiliated with the retailer
13 under Section 1504 of Title 26 of the United States Code.
14 (b) (1) In the case of accounts held by a lender, a
15 retailer or lender who makes a proper election under
16 subdivision (b)(4) shall be entitled to a deduction or
17 refund of the tax that the retailer has previously
18 reported and paid if all of the following conditions are
19 met:
20 (A) No deduction is claimed or allowed for any
21 portion of the account for which a previous
22 deduction was claimed or allowed.
23 (B) The accounts have been found worthless and
24 written off by the lender in accordance with the
25 requirements of subsection (a).
26 (C) The account was written off as a bad debt
27 on or after January 1, 2001.
28 (D) The party electing to claim the deduction
29 or refund under subdivision (b)(4) files a claim in
30 a manner prescribed by the Department.
31 (2) If the retailer or the lender thereafter
32 collects in whole or in part any accounts, one of the
33 following shall apply:
34 (A) If the retailer is entitled to the
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1 deduction or refund under the election specified in
2 subdivision (b)(4), the retailer shall include the
3 amount collected in its first return filed after the
4 collection and pay tax on that amount with the
5 return.
6 (B) If the lender is entitled to the deduction
7 or refund under the election specified in
8 subdivision (b)(4), the lender shall pay the tax to
9 the Department.
10 (3) For purposes of this subsection (b), the term
11 "lender" means any of the following:
12 (A) Any person who holds a retail account
13 which that person purchased directly from a retailer
14 who reported the tax.
15 (B) Any person who holds a retail account
16 pursuant to that person's contract directly with the
17 retailer who reported the tax.
18 (C) Any person who is either an affiliated
19 entity, under Section 1504 of Title 26 of the United
20 States Code, of a person described in subdivision
21 (3)(A) or (3)(B), or an assignee of a person
22 described in subdivision (3)(A) or (3)(B).
23 (4) Prior to claiming any deduction or refund under
24 this subsection (b), the retailer who reported the tax
25 and the lender shall file an election with the
26 Department, signed by both parties, designating which
27 party is entitled to claim the deduction or refund. This
28 election may not be amended or revoked unless a new
29 election, signed by both parties, is filed with the
30 Department.
31 (5) A lender as defined above may have its
32 deduction or refund for bad debts claimed on a return
33 filed by an affiliated retailer.
-6- LRB9203552SMdvam01
1 Section 15. The Service Occupation Tax Act is amended by
2 adding Section 3-41 as follows:
3 (35 ILCS 115/3-41 new)
4 Sec. 3-41. Bad debts.
5 (a) A retailer is relieved from liability for the tax
6 under this Act that became due and payable, insofar as the
7 measure of the tax is represented by accounts that have been
8 found to be worthless and charged off for income tax purposes
9 by the retailer or, if the retailer is not required to file
10 income tax returns, charged off in accordance with generally
11 accepted accounting principles. A retailer that has
12 previously paid the tax may, under rules adopted by the
13 Department, take as a deduction the amount found worthless
14 and charged off by the retailer. If these accounts are
15 thereafter in whole or in part collected by the retailer, the
16 amount collected shall be included in the first return filed
17 after the collection and the tax shall be paid with the
18 return. For purposes of this subdivision, the term
19 "retailer" includes any entity affiliated with the retailer
20 under Section 1504 of Title 26 of the United States Code.
21 (b) (1) In the case of accounts held by a lender, a
22 retailer or lender who makes a proper election under
23 subdivision (b)(4) shall be entitled to a deduction or
24 refund of the tax that the retailer has previously
25 reported and paid if all of the following conditions are
26 met:
27 (A) No deduction is claimed or allowed for any
28 portion of the account for which a previous
29 deduction was claimed or allowed.
30 (B) The accounts have been found worthless and
31 written off by the lender in accordance with the
32 requirements of subsection (a).
33 (C) The account was written off as a bad debt
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1 on or after January 1, 2001.
2 (D) The party electing to claim the deduction
3 or refund under subdivision (b)(4) files a claim in
4 a manner prescribed by the Department.
5 (2) If the retailer or the lender thereafter
6 collects in whole or in part any accounts, one of the
7 following shall apply:
8 (A) If the retailer is entitled to the
9 deduction or refund under the election specified in
10 subdivision (b)(4), the retailer shall include the
11 amount collected in its first return filed after the
12 collection and pay tax on that amount with the
13 return.
14 (B) If the lender is entitled to the deduction
15 or refund under the election specified in
16 subdivision (b)(4), the lender shall pay the tax to
17 the Department.
18 (3) For purposes of this subsection (b), the term
19 "lender" means any of the following:
20 (A) Any person who holds a retail account
21 which that person purchased directly from a retailer
22 who reported the tax.
23 (B) Any person who holds a retail account
24 pursuant to that person's contract directly with the
25 retailer who reported the tax.
26 (C) Any person who is either an affiliated
27 entity, under Section 1504 of Title 26 of the United
28 States Code, of a person described in subdivision
29 (3)(A) or (3)(B), or an assignee of a person
30 described in subdivision (3)(A) or (3)(B).
31 (4) Prior to claiming any deduction or refund under
32 this subsection (b), the retailer who reported the tax
33 and the lender shall file an election with the
34 Department, signed by both parties, designating which
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1 party is entitled to claim the deduction or refund. This
2 election may not be amended or revoked unless a new
3 election, signed by both parties, is filed with the
4 Department.
5 (5) A lender as defined above may have its
6 deduction or refund for bad debts claimed on a return
7 filed by an affiliated retailer.
8 Section 20. The Retailers' Occupation Tax Act is amended
9 by adding Section 3a as follows:
10 (35 ILCS 120/3a new)
11 Sec. 3a. Bad debts.
12 (a) A retailer is relieved from liability for the tax
13 under this Act that became due and payable, insofar as the
14 measure of the tax is represented by accounts that have been
15 found to be worthless and charged off for income tax purposes
16 by the retailer or, if the retailer is not required to file
17 income tax returns, charged off in accordance with generally
18 accepted accounting principles. A retailer that has
19 previously paid the tax may, under rules adopted by the
20 Department, take as a deduction the amount found worthless
21 and charged off by the retailer. If these accounts are
22 thereafter in whole or in part collected by the retailer, the
23 amount collected shall be included in the first return filed
24 after the collection and the tax shall be paid with the
25 return. For purposes of this subdivision, the term
26 "retailer" includes any entity affiliated with the retailer
27 under Section 1504 of Title 26 of the United States Code.
28 (b) (1) In the case of accounts held by a lender, a
29 retailer or lender who makes a proper election under
30 subdivision (b)(4) shall be entitled to a deduction or
31 refund of the tax that the retailer has previously
32 reported and paid if all of the following conditions are
-9- LRB9203552SMdvam01
1 met:
2 (A) No deduction is claimed or allowed for any
3 portion of the account for which a previous
4 deduction was claimed or allowed.
5 (B) The accounts have been found worthless and
6 written off by the lender in accordance with the
7 requirements of subsection (a).
8 (C) The account was written off as a bad debt
9 on or after January 1, 2001.
10 (D) The party electing to claim the deduction
11 or refund under subdivision (b)(4) files a claim in
12 a manner prescribed by the Department.
13 (2) If the retailer or the lender thereafter
14 collects in whole or in part any accounts, one of the
15 following shall apply:
16 (A) If the retailer is entitled to the
17 deduction or refund under the election specified in
18 subdivision (b)(4), the retailer shall include the
19 amount collected in its first return filed after the
20 collection and pay tax on that amount with the
21 return.
22 (B) If the lender is entitled to the deduction
23 or refund under the election specified in
24 subdivision (b)(4), the lender shall pay the tax to
25 the Department.
26 (3) For purposes of this subsection (b), the term
27 "lender" means any of the following:
28 (A) Any person who holds a retail account
29 which that person purchased directly from a retailer
30 who reported the tax.
31 (B) Any person who holds a retail account
32 pursuant to that person's contract directly with the
33 retailer who reported the tax.
34 (C) Any person who is either an affiliated
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1 entity, under Section 1504 of Title 26 of the United
2 States Code, of a person described in subdivision
3 (3)(A) or (3)(B), or an assignee of a person
4 described in subdivision (3)(A) or (3)(B).
5 (4) Prior to claiming any deduction or refund under
6 this subsection (b), the retailer who reported the tax
7 and the lender shall file an election with the
8 Department, signed by both parties, designating which
9 party is entitled to claim the deduction or refund. This
10 election may not be amended or revoked unless a new
11 election, signed by both parties, is filed with the
12 Department.
13 (5) A lender as defined above may have its
14 deduction or refund for bad debts claimed on a return
15 filed by an affiliated retailer.
16 Section 99. Effective date. This Act takes effect on
17 January 1, 2002.".