Section 470.133  Manufacturing Illinois Chips for Real Opportunity (MICRO) Act Project Site Exemption

a)         A public utility shall not charge customers, who are certified by the Department of Commerce and Economic Opportunity ("DCEO") under Section 110-95 of the Manufacturing Illinois Chips for Real Opportunity (MICRO) Act ("MICRO Act") (35 ILCS 45/110-95), an additional charge equal to the total amount of tax imposed under Section 2 of the Gas Revenue Tax Act (35 ILCS 615/2), to the extent of such exemption and during the period in which such exemption is in effect.  [220 ILCS 5/9-222]

b)         To be eligible for this exemption, DCEO must certify a taxpayer for this exemption.  To become certified, the taxpayer must meet the qualifications under paragraphs (1), (2), and (4) of subsection (c) of Section 110-20 of the MICRO Act (35 ILCS 45/110-20) and has entered into an agreement with DCEO under the MICRO Act.  The taxpayer must meet any other criteria for certification set by DCEO.  DCEO will determine the period during which the exemption is in effect, which shall not exceed 30 years from the date of the taxpayer's initial receipt of certification from DCEO.  [35 ILCS 45/110-95]

(Source:  Added at 48 Ill. Reg. 16561, effective November 4, 2024)

Section 470.135  Books and Records

a)         A taxpayer must make and maintain complete records covering receipts from all sources, including receipts from transactions not included in the measure of the tax.  A taxpayer's records are required clearly to indicate the complete information required by the returns.  In general, those records and accounts shall be kept in the American language and upon such basis as will facilitate verification of the entries on the returns required by the Act.  Books and records shall include copies of original invoices or bills issued to customers covering services within the Act.

b)         The Act requires that all books and records and other papers and documents required by the Act to be kept shall be kept in the American language and shall, at all times during business hours of the day, be subject to inspection by the Department or its duly authorized agents and employees.  Books and records reflecting gross receipts received during any period with respect to which the Department is authorized to establish liability as provided in Sections 4 and 5 of the Act (approximately 3˝ years) shall be preserved until the expiration of that period unless the Department, in writing, authorized their destruction or disposal at an earlier date. [35 ILCS 615/7]

(Source:  Amended at 43 Ill. Reg. 7463, effective June 18, 2019)

Section 470.140  Claims to Recover Erroneously Paid Tax

a)         When a taxpayer has paid to the Department any tax or penalty or interest not due under the provisions of the Act, either as a result of a mistake of fact or an error of law, the taxpayer may file a claim for credit on the form provided by the Department for that purpose and available at www.tax.illinois.gov.  Upon receipt of the claim, the Department will examine the claim. Upon approval, the Department will issue a credit memorandum in the amount of the overpayment.  The credit memorandum may be applied by the taxpayer to discharge any liability for tax or penalty or interest due or to become due from the taxpayer under the Act.

b)         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.

c)         Beginning June 25, 2021, 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.  [35 ILCS 615/6].

d)         In no case may a taxpayer deduct, from the amount of tax to be remitted as shown by a return made to the Department, the amount of any overpayment of tax made during any prior period of time unless that deduction is supported by a duly issued credit memorandum.

e)         Credit memoranda issued to any taxpayer on account of any overpayment of taxes or penalties or interest under any other law shall not be used to discharge any liability for tax or penalty or interest under the Act.

f)         A credit memorandum issued under the Act may (subject to reasonable rules of the Department) be assigned by the person to whom the credit memorandum is issued to any other taxpayer under the Act.

g)         In case the Department determines that the claimant is entitled to a refund, that refund shall be made only from the appropriation available for that purpose.  If it appears unlikely that the amount appropriated would permit everyone having a claim allowed during the period covered by that appropriation to elect to receive a cash refund, the Department will make those refunds only in hardship cases (i.e., in cases in which the claimant cannot use a credit memorandum).  The two most likely situations in which this would be the case are when the claimant has discontinued business and when the claimant will have a small volume of liability to the Department in the foreseeable future, but receives such a large credit memorandum that it might take the claimant a long time to liquidate it by using it to pay current taxes.  In these instances, the claimant probably would have to sell the credit memorandum at a loss in order to realize anything from it within any reasonable period of time.

(Source:  Amended at 47 Ill. Reg. 5811, effective April 4, 2023)

Section 470.145  Furnishing of Gas

a)         The tax applies with respect to the consideration received by a taxpayer for gas distributed, supplied, furnished or sold to any person in a taxable transaction for use or consumption and not for resale.  All such receipts are within the Act.  There is no limitation in the application of the tax to any particular use or consumption of these services.  However, for information concerning exemptions for transactions with certain kinds of customers, see Section 470.160.

b)         Gas furnished to other taxpayers engaged in the business of distributing, supplying, furnishing or selling to their customers the gas so received is for resale and is not within the Act.

c)         The furnishing of gas includes gas furnished for use or consumption and not for resale, whether furnished at a meter rate dependent upon the quantity furnished, at flat rates per unit period of time, for a flat amount per outlet, or upon any other basis independent of the quantity of gas supplied.

d)         Taxpayers are required to include in gross receipts by which they compute tax all consideration received for the furnishing of gas for use or consumption and not for resale, including flat fees, payments on contracts, minimum charges and the value of any other consideration for gas, including consideration in the form of property or services.

e)         Taxpayers  are not required to include in taxable gross receipts any amounts collected from others to reimburse the taxpayer for the tax imposed by the Gas Revenue Tax Act or to reimburse the taxpayer for tax imposed by any municipality under Section 8-11-2 of the Illinois Municipal Code [65 ILCS 5/8-11-2] on the business of distributing, supplying, furnishing or selling gas for use or consumption, including all charges the taxpayer is authorized by Section 9-222 of the Public Utilities Act [220 ILCS 5] to collect from customers in this connection.  In order to exclude those amounts from its gross receipts, the taxpayer must state separately on its bill for gas to the purchaser how much tax, as permitted by law, is being passed on to the purchaser in addition to the charge for gas, or if the taxpayer periodically sends the purchaser a rate chart showing, separately from the rate for gas, how much tax, as permitted by law, will be charged by the taxpayer to the purchaser on each bracket or amount of cubic feet or therms of gas.

f)         When a taxpayer furnishes gas he or she has acquired from other taxpayers for use or consumption and not for resale, and he or she bills the consumer for that gas, he or she must include in gross receipts by which the tax is computed the total receipts from the sale of the gas and not merely the amount of commissions he or she may earn for the distribution of the gas. The fact that a taxpayer has billed a consumer for gas distributed, supplied, furnished or sold to that consumer is prima facie evidence that the taxpayer distributed, supplied, furnished or sold services within the Act and is liable for tax with respect to those services.

(Source:  Amended at 43 Ill. Reg. 7463, effective June 18, 2019)

Section 470.150  Gas Sold to and by Building Operators

a)         Persons owning, operating or leasing buildings, who purchase gas services and rebill them as gas services to tenants, make the final sale or distribution of the services and become liable for tax measured by their gross receipts from the distributing, supplying, furnishing or selling of the services in question.  These persons are required, under the terms of the Act, to file returns and pay tax in the same manner as any other taxpayer.

b)         These persons shall show receipts from the services separately in their books and records.

c)         In order to enable persons selling gas to owners, operators or lessees of buildings to report accurately to the Department the amount of gas services sold for resale and the amount sold for use or consumption, the owners, operators or lessees should, at the end of each of their billing periods, report to the supplier the amount of gas (cubic feet or therms, as the case may be) consumed by the owner or building operator and not resold to tenants.  The owners, operators or lessees need not report to the Department the amount reported to the supplier.

d)         The sale of these services to persons owning, operating or leasing buildings constitutes the sale of services for the purpose of resale, if those persons bill them as gas services to tenants. The gross receipts from this particular type of sale may be deducted from receipts by which the seller for resale measures his or her tax under the Act.

e)         Sales by taxpayers to hotels and like businesses for use or consumption are taxable sales within the Act.

(Source:  Amended at 43 Ill. Reg. 7463, effective June 18, 2019)

Section 470.155  Transactions in Interstate Commerce

a)         The tax is not imposed upon any taxpayer with respect to any transaction in interstate commerce to the extent that the transactions may not, under the Constitution and statutes of the United States, be made the subject of taxation by this State.

b)         Insofar as the tax is imposed upon persons distributing, supplying, furnishing or selling gas for use or consumption and not for resale, the following general principles will apply in determining whether transactions are in interstate commerce:

1)         When a taxpayer delivers gas through continuous mains, lines or pipes from a point in Illinois to a point outside of Illinois, those transactions are interstate commerce, and the taxpayer is not liable for tax with respect to gross receipts from those transactions.

2)         When a taxpayer not engaged in business in this State delivers gas through continuous mains, lines or pipes from a point outside of Illinois to a point within Illinois, the transaction is interstate commerce, and the taxpayer is not liable for tax with respect to receipts from that transaction. However, if the company is engaged in the business in Illinois of distributing, supplying, furnishing or selling gas brought within this State for use or consumption and not for resale, the transactions do not constitute interstate commerce, and the tax will apply.

3)         When a taxpayer delivers gas through continuous mains, lines or pipes from one point in Illinois to a second point within Illinois, the transaction is not interstate commerce, and the taxpayer will be liable for tax with respect to receipts from that transaction.  This subsection (b)(3) applies irrespective of the fact that a portion of the continuous mains, lines or pipes of the taxpayer through which gas passes are situated outside Illinois.

c)         When a taxpayer distributes, supplies, furnishes or sells gas to a single customer under a contract calling for the delivery of gas partly within Illinois and partly outside of Illinois, the taxpayer is liable for tax with respect to that portion of gross receipts from the contract accruing from service furnished within this State.

(Source:  Amended at 43 Ill. Reg. 7463, effective June 18, 2019)

Section 470.160  Sales of Gas to the United States Government

a)         Taxpayers are not liable for tax with respect to their receipts from gas distributed, supplied, furnished or sold to the United States Government, including its unincorporated departments, agencies or instrumentalities. This would include sales to the United States Defense Department, the United States Postal Service and other unincorporated departments of the Federal Government; the Interstate Commerce Commission, the Federal Communications Commission, the Deparment of Energy, the Nuclear Regulatory Commission and other unincorporated commissions of the Federal Government; the National Transportation Safety Board, the Federal Aviation Administration, the Department of Transportation, the Federal Reserve Board and other unincorporated boards of the Federal Government.

b)         Taxpayers are, however, liable for tax with respect to their gross receipts from gas distributed, supplied, furnished or sold to any agency or instrumentality of the United States Government, which agency or instrumentality is a corporate entity.  This is true even though the gas may be used in the performance of governmental functions.  For example, receipts from gas distributed, supplied, furnished or sold to Federal Reserve or National Banks, the Commodity Credit Corporation, the Federal Deposit Insurance Corporation, the Federal Crop Insurance Corporation or other such incorporated federal agencies and instrumentalities engaged in the performance of governmental functions, are subject to tax.

(Source:  Amended at 43 Ill. Reg. 7463, effective June 18, 2019)

Section 470.165  Services Furnished the State of Illinois, its Departments, Agencies, Counties, Municipalities or Other Political Subdivisions

Taxpayers are liable for tax with respect to gross receipts from the furnishing of gas to the State of Illinois, its Departments, agencies, counties, municipalities, school districts, or other political subdivisions for use or consumption and not for resale.

(Source:  Amended at 43 Ill. Reg. 7463, effective June 18, 2019)

Section 470.170  Services Furnished to Religious, Scientific, Educational and Charitable Institutions

Taxpayers are liable for tax with respect to gross receipts from the furnishing of gas to any religious, scientific, educational or charitable institution for use or consumption and not for resale.

Section 470.171  Exclusion for Charges Made to Customers Who Acquired Contractual Rights to Purchase Out-of-State Gas or Gas Services Prior to March 1, 1995 (Repealed)

(Source:  Repealed at 43 Ill. Reg. 7463, effective June 18, 2019)

Section 470.172  Exclusion from Tax for Transactions Involving Customers Who Incur Gas Use Tax

a)         Transactions Subject to Gas Use Tax.  Beginning with charges billed on and after October 1, 2003, no tax is imposed under this Part on transactions with customers who incur a tax liability under the Gas Use Tax Law [35 ILCS 173] on those transactions. 

EXAMPLE:  A transaction with a customer for the transportation of out-of-state gas is not subject to tax under the Gas Revenue Tax Act, including, but not limited to, any transportation charges and any related service charges.

b)         Transactions Exempt from Gas Use Tax.  Transactions with customers that are exempt from tax under the Gas Use Tax Law or otherwise incur no tax liability under that statute remain subject to tax under this Part. 

EXAMPLE:  A customer is exempt from Gas Use Tax under one of the exemptions provided under Section 5-50 of the Gas Use Tax Law and makes an out-of-state purchase of gas.  The customer provides its delivering supplier in Illinois a copy of an exemption certificate as required under 86 Ill. Adm. Code 471.125.  The sale of the gas is not subject to Gas Revenue Tax liability; however, the transaction for the transportation of the gas and any related service charges remain subject to tax under this Part at the rate of 2.4 cents per therm or 5% of the gross receipts (whichever is less) for the customer's billing period. 

(Source:  Amended at 43 Ill. Reg. 7463, effective June 18, 2019)

Section 470.175  Meter Readings

a)         When a taxpayer distributes, supplies, furnishes or sells gas for use or consumption and not for resale through meters, the charge for the services furnished being dependent upon the quantities metered, and when the taxpayer has followed the custom and usage prior to the effective date of the Act of making meter readings with respect to any particular consumer each quarter, each half-year, every four months or at the end of any period of time other than each calendar month, the taxpayer will be permitted to follow its custom and usage with regard to meter readings and will not be required to make meter readings at the end of each calendar month.

b)         When a taxpayer files returns and pays tax upon a basis of the gross amount of billings or transactions, he or she should include in the measure of the tax the total amount of service under the Act billed within the period for which the return is filed, irrespective of the dates of meter readings.  When no services under the Act have been billed within any return period, this fact should be so indicated upon the return.

c)         When a taxpayer files returns and pays tax upon a basis of gross receipts, he or she should include in the gross receipts the total amount of receipts received during the period for which the taxpayer's return is filed with respect to services furnished, irrespective of the time that the services may have been furnished or meter readings made.

(Source:  Amended at 43 Ill. Reg. 7463, effective June 18, 2019)

Section 470.180  Services Furnished to Officers or Employees

A taxpayer is liable for tax with respect to gross receipts from services under the Act furnished to his or her officers or employees, whether at regular rates or at reduced rates.  This Section applies equally when the consideration for services under the Act so furnished takes the form of a deduction from or adjustment in wages or salaries payable to officers or employees, or when it takes the form of services rendered to the taxpayer by employees for which no specific compensation is paid.

(Source:  Amended at 43 Ill. Reg. 7463, effective June 18, 2019)

Section 470.185  Interdepartmental Transfers

a)         The furnishing of gas between the various departments of a taxpayer does not result in any liability for tax under the Act, notwithstanding that one department of the taxpayer receiving gas services is, for accounting purposes, charged with the value of the services by another department of the same taxpayer rendering those services.

b)         However, when services under the Act are rendered to a separate corporation or legal entity for use or consumption and not for resale, the taxpayer rendering the service is liable for tax with respect to his or her gross receipts from the transactions.

c)         It is immaterial that services under the Act so furnished by a taxpayer are furnished to his or her wholly-owned subsidiary, or that the two corporations may be wholly or partially under a common ownership or management.  The Department will not disregard separate corporate entities in applying the Act.

(Source:  Amended at 43 Ill. Reg. 7463, effective June 18, 2019)

Section 470.190  Discounts, Penalties and Finance or Interest Charges

a)         When taxpayers allow discounts from gross charges for services under the Act because of prompt payment of accounts, the amounts of the discounts are not included within gross receipts by which tax is computed.

b)         When taxpayers add and collect penalties or interest upon delinquent accounts or upon accounts involving installment payments, the amounts of the penalties or interest need not be included in gross receipts, provided that the amounts are separately itemized and billed to the persons to whom the services are furnished, and separately recorded in the books and records of the taxpayer.  If the amounts of the penalty, interest or finance charges are not separately billed and itemized to the person to whom the services are furnished and separately recorded in the books and records of the taxpayer, the total amount must be included in gross receipts by which the tax is computed.

c)         When a "gross amount" and "net amount" are billed to a customer on the same invoice for services furnished, the "net amount" representing the charge if paid within a stated period of time, the "gross amount" being the charge payable after the stated time has elapsed, the difference between the two amounts is deemed to be a penalty or interest charge separately billed.

(Source:  Amended at 43 Ill. Reg. 7463, effective June 18, 2019)

Section 470.195  Sales of Appliances, Equipment or Services Subject to Other Tax Acts

a)         Taxpayers should not include in receipts by which they compute their tax liability under the Act any receipts from the sale of tangible personal property for use or consumption with respect to which a tax is imposed under the Retailers' Occupation Tax Act [35 ILCS 120].  Taxpayers engaged in the sale of stoves, refrigerators, appliances, equipment or other tangible personal property to users or consumers are required to make a separate return under the Retailers' Occupation Tax Act on forms provided for that purpose and to pay the tax as prescribed by that Act.  These transactions should not be included in any returns made under the Gas Revenue Tax Act.

b)         Receipts that are subject to the Public Utilities Revenue Act [220 ILCS 620] and receipts that are subject to the Messages Tax Act [35 ILCS 610] will be reported in separate returns filed under those respective Acts and should not be included in returns filed under the Gas Revenue Tax Act.

(Source:  Amended at 43 Ill. Reg. 7463, effective June 18, 2019)