Public Act 098-1080
 
HB5684 EnrolledLRB098 16363 HLH 51426 b

    AN ACT concerning finance.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. If and only if House Bill 2317 of the 98th
General Assembly becomes law, then the Use Tax Act is amended
by changing Section 2 as follows:
 
    (35 ILCS 105/2)  (from Ch. 120, par. 439.2)
    Sec. 2. "Use" means the exercise by any person of any right
or power over tangible personal property incident to the
ownership of that property, except that it does not include the
sale of such property in any form as tangible personal property
in the regular course of business to the extent that such
property is not first subjected to a use for which it was
purchased, and does not include the use of such property by its
owner for demonstration purposes: Provided that the property
purchased is deemed to be purchased for the purpose of resale,
despite first being used, to the extent to which it is resold
as an ingredient of an intentionally produced product or
by-product of manufacturing. "Use" does not mean the
demonstration use or interim use of tangible personal property
by a retailer before he sells that tangible personal property.
For watercraft or aircraft, if the period of demonstration use
or interim use by the retailer exceeds 18 months, the retailer
shall pay on the retailers' original cost price the tax imposed
by this Act, and no credit for that tax is permitted if the
watercraft or aircraft is subsequently sold by the retailer.
"Use" does not mean the physical incorporation of tangible
personal property, to the extent not first subjected to a use
for which it was purchased, as an ingredient or constituent,
into other tangible personal property (a) which is sold in the
regular course of business or (b) which the person
incorporating such ingredient or constituent therein has
undertaken at the time of such purchase to cause to be
transported in interstate commerce to destinations outside the
State of Illinois: Provided that the property purchased is
deemed to be purchased for the purpose of resale, despite first
being used, to the extent to which it is resold as an
ingredient of an intentionally produced product or by-product
of manufacturing.
    "Watercraft" means a Class 2, Class 3, or Class 4
watercraft as defined in Section 3-2 of the Boat Registration
and Safety Act, a personal watercraft, or any boat equipped
with an inboard motor.
    "Purchase at retail" means the acquisition of the ownership
of or title to tangible personal property through a sale at
retail.
    "Purchaser" means anyone who, through a sale at retail,
acquires the ownership of tangible personal property for a
valuable consideration.
    "Sale at retail" means any transfer of the ownership of or
title to tangible personal property to a purchaser, for the
purpose of use, and not for the purpose of resale in any form
as tangible personal property to the extent not first subjected
to a use for which it was purchased, for a valuable
consideration: Provided that the property purchased is deemed
to be purchased for the purpose of resale, despite first being
used, to the extent to which it is resold as an ingredient of
an intentionally produced product or by-product of
manufacturing. For this purpose, slag produced as an incident
to manufacturing pig iron or steel and sold is considered to be
an intentionally produced by-product of manufacturing. "Sale
at retail" includes any such transfer made for resale unless
made in compliance with Section 2c of the Retailers' Occupation
Tax Act, as incorporated by reference into Section 12 of this
Act. Transactions whereby the possession of the property is
transferred but the seller retains the title as security for
payment of the selling price are sales.
    "Sale at retail" shall also be construed to include any
Illinois florist's sales transaction in which the purchase
order is received in Illinois by a florist and the sale is for
use or consumption, but the Illinois florist has a florist in
another state deliver the property to the purchaser or the
purchaser's donee in such other state.
    Nonreusable tangible personal property that is used by
persons engaged in the business of operating a restaurant,
cafeteria, or drive-in is a sale for resale when it is
transferred to customers in the ordinary course of business as
part of the sale of food or beverages and is used to deliver,
package, or consume food or beverages, regardless of where
consumption of the food or beverages occurs. Examples of those
items include, but are not limited to nonreusable, paper and
plastic cups, plates, baskets, boxes, sleeves, buckets or other
containers, utensils, straws, placemats, napkins, doggie bags,
and wrapping or packaging materials that are transferred to
customers as part of the sale of food or beverages in the
ordinary course of business.
    The purchase, employment and transfer of such tangible
personal property as newsprint and ink for the primary purpose
of conveying news (with or without other information) is not a
purchase, use or sale of tangible personal property.
    "Selling price" means the consideration for a sale valued
in money whether received in money or otherwise, including
cash, credits, property other than as hereinafter provided, and
services, but not including the value of or credit given for
traded-in tangible personal property where the item that is
traded-in is of like kind and character as that which is being
sold, and shall be determined without any deduction on account
of the cost of the property sold, the cost of materials used,
labor or service cost or any other expense whatsoever, but does
not include interest or finance charges which appear as
separate items on the bill of sale or sales contract nor
charges that are added to prices by sellers on account of the
seller's tax liability under the "Retailers' Occupation Tax
Act", or on account of the seller's duty to collect, from the
purchaser, the tax that is imposed by this Act, or, except as
otherwise provided with respect to any cigarette tax imposed by
a home rule unit, on account of the seller's tax liability
under any local occupation tax administered by the Department,
or, except as otherwise provided with respect to any cigarette
tax imposed by a home rule unit on account of the seller's duty
to collect, from the purchasers, the tax that is imposed under
any local use tax administered by the Department. Effective
December 1, 1985, "selling price" shall include charges that
are added to prices by sellers on account of the seller's tax
liability under the Cigarette Tax Act, on account of the
seller's duty to collect, from the purchaser, the tax imposed
under the Cigarette Use Tax Act, and on account of the seller's
duty to collect, from the purchaser, any cigarette tax imposed
by a home rule unit.
    Notwithstanding any law to the contrary, for any motor
vehicle, as defined in Section 1-146 of the Vehicle Code, that
is sold on or after January 1, 2015 July 1, 2014 for the
purpose of leasing the vehicle for a defined period that is
longer than one year and (1) is a motor vehicle of the second
division that: (A) is a self-contained motor vehicle designed
or permanently converted to provide living quarters for
recreational, camping, or travel use, with direct walk through
access to the living quarters from the driver's seat; (B) is of
the van configuration designed for the transportation of not
less than 7 nor more than 16 passengers; or (C) has a gross
vehicle weight rating of 8,000 pounds or less or (2) is a motor
vehicle of the first division, "selling price" or "amount of
sale" means the consideration received by the lessor pursuant
to the lease contract, including amounts due at lease signing
and all monthly or other regular payments charged over the term
of the lease. Also included in the selling price is any amount
received by the lessor from the lessee for the leased vehicle
that is not calculated at the time the lease is executed,
including, but not limited to, excess mileage charges and
charges for excess wear and tear. For sales that occur in
Illinois, with respect to any amount received by the lessor
from the lessee for the leased vehicle that is not calculated
at the time the lease is executed, the lessor who purchased the
motor vehicle does not incur the tax imposed by the Use Tax Act
on those amounts, and the retailer who makes the retail sale of
the motor vehicle to the lessor is not required to collect the
tax imposed by this Act or to pay the tax imposed by the
Retailers' Occupation Tax Act on those amounts. However, the
lessor who purchased the motor vehicle assumes the liability
for reporting and paying the tax on those amounts directly to
the Department in the same form (Illinois Retailers' Occupation
Tax, and local retailers' occupation taxes, if applicable) in
which the retailer would have reported and paid such tax if the
retailer had accounted for the tax to the Department. For
amounts received by the lessor from the lessee that are not
calculated at the time the lease is executed, the lessor must
file the return and pay the tax to the Department by the due
date otherwise required by this Act for returns other than
transaction returns. If the retailer is entitled under this Act
to a discount for collecting and remitting the tax imposed
under this Act to the Department with respect to the sale of
the motor vehicle to the lessor, then the right to the discount
provided in this Act shall be transferred to the lessor with
respect to the tax paid by the lessor for any amount received
by the lessor from the lessee for the leased vehicle that is
not calculated at the time the lease is executed; provided that
the discount is only allowed if the return is timely filed and
for amounts timely paid. The "selling price" of a motor vehicle
that is sold on or after January 1, 2015 July 1, 2014 for the
purpose of leasing for a defined period of longer than one year
shall not be reduced by the value of or credit given for
traded-in tangible personal property owned by the lessor, nor
shall it be reduced by the value of or credit given for
traded-in tangible personal property owned by the lessee,
regardless of whether the trade-in value thereof is assigned by
the lessee to the lessor. In the case of a motor vehicle that
is sold for the purpose of leasing for a defined period of
longer than one year, the sale occurs at the time of the
delivery of the vehicle, regardless of the due date of any
lease payments. A lessor who incurs a Retailers' Occupation Tax
liability on the sale of a motor vehicle coming off lease may
not take a credit against that liability for the Use Tax the
lessor paid upon the purchase of the motor vehicle (or for any
tax the lessor paid with respect to any amount received by the
lessor from the lessee for the leased vehicle that was not
calculated at the time the lease was executed) if the selling
price of the motor vehicle at the time of purchase was
calculated using the definition of "selling price" as defined
in this paragraph. Notwithstanding any other provision of this
Act to the contrary, lessors shall file all returns and make
all payments required under this paragraph to the Department by
electronic means in the manner and form as required by the
Department. This paragraph does not apply to leases of motor
vehicles for which, at the time the lease is entered into, the
term of the lease is not a defined period, including leases
with a defined initial period with the option to continue the
lease on a month-to-month or other basis beyond the initial
defined period.
    The phrase "like kind and character" shall be liberally
construed (including but not limited to any form of motor
vehicle for any form of motor vehicle, or any kind of farm or
agricultural implement for any other kind of farm or
agricultural implement), while not including a kind of item
which, if sold at retail by that retailer, would be exempt from
retailers' occupation tax and use tax as an isolated or
occasional sale.
    "Department" means the Department of Revenue.
    "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.
    "Retailer" means and includes every person engaged in the
business of making sales at retail as defined in this Section.
    A person who holds himself or herself out as being engaged
(or who habitually engages) in selling tangible personal
property at retail is a retailer hereunder with respect to such
sales (and not primarily in a service occupation)
notwithstanding the fact that such person designs and produces
such tangible personal property on special order for the
purchaser and in such a way as to render the property of value
only to such purchaser, if such tangible personal property so
produced on special order serves substantially the same
function as stock or standard items of tangible personal
property that are sold at retail.
    A person whose activities are organized and conducted
primarily as a not-for-profit service enterprise, and who
engages in selling tangible personal property at retail
(whether to the public or merely to members and their guests)
is a retailer with respect to such transactions, excepting only
a person organized and operated exclusively for charitable,
religious or educational purposes either (1), to the extent of
sales by such person to its members, students, patients or
inmates of tangible personal property to be used primarily for
the purposes of such person, or (2), to the extent of sales by
such person of tangible personal property which is not sold or
offered for sale by persons organized for profit. The selling
of school books and school supplies by schools at retail to
students is not "primarily for the purposes of" the school
which does such selling. This paragraph does not apply to nor
subject to taxation occasional dinners, social or similar
activities of a person organized and operated exclusively for
charitable, religious or educational purposes, whether or not
such activities are open to the public.
    A person who is the recipient of a grant or contract under
Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
serves meals to participants in the federal Nutrition Program
for the Elderly in return for contributions established in
amount by the individual participant pursuant to a schedule of
suggested fees as provided for in the federal Act is not a
retailer under this Act with respect to such transactions.
    Persons who engage in the business of transferring tangible
personal property upon the redemption of trading stamps are
retailers hereunder when engaged in such business.
    The isolated or occasional sale of tangible personal
property at retail by a person who does not hold himself out as
being engaged (or who does not habitually engage) in selling
such tangible personal property at retail or a sale through a
bulk vending machine does not make such person a retailer
hereunder. However, any person who is engaged in a business
which is not subject to the tax imposed by the "Retailers'
Occupation Tax Act" because of involving the sale of or a
contract to sell real estate or a construction contract to
improve real estate, but who, in the course of conducting such
business, transfers tangible personal property to users or
consumers in the finished form in which it was purchased, and
which does not become real estate, under any provision of a
construction contract or real estate sale or real estate sales
agreement entered into with some other person arising out of or
because of such nontaxable business, is a retailer to the
extent of the value of the tangible personal property so
transferred. If, in such transaction, a separate charge is made
for the tangible personal property so transferred, the value of
such property, for the purposes of this Act, is the amount so
separately charged, but not less than the cost of such property
to the transferor; if no separate charge is made, the value of
such property, for the purposes of this Act, is the cost to the
transferor of such tangible personal property.
    "Retailer maintaining a place of business in this State",
or any like term, means and includes any of the following
retailers:
        1. A retailer having or maintaining within this State,
    directly or by a subsidiary, an office, distribution house,
    sales house, warehouse or other place of business, or any
    agent or other representative operating within this State
    under the authority of the retailer or its subsidiary,
    irrespective of whether such place of business or agent or
    other representative is located here permanently or
    temporarily, or whether such retailer or subsidiary is
    licensed to do business in this State. However, the
    ownership of property that is located at the premises of a
    printer with which the retailer has contracted for printing
    and that consists of the final printed product, property
    that becomes a part of the final printed product, or copy
    from which the printed product is produced shall not result
    in the retailer being deemed to have or maintain an office,
    distribution house, sales house, warehouse, or other place
    of business within this State.
        1.1. Beginning July 1, 2011, a retailer having a
    contract with a person located in this State under which
    the person, for a commission or other consideration based
    upon the sale of tangible personal property by the
    retailer, directly or indirectly refers potential
    customers to the retailer by a link on the person's
    Internet website. The provisions of this paragraph 1.1
    shall apply only if the cumulative gross receipts from
    sales of tangible personal property by the retailer to
    customers who are referred to the retailer by all persons
    in this State under such contracts exceed $10,000 during
    the preceding 4 quarterly periods ending on the last day of
    March, June, September, and December.
        1.2. Beginning July 1, 2011, a retailer having a
    contract with a person located in this State under which:
            A. the retailer sells the same or substantially
        similar line of products as the person located in this
        State and does so using an identical or substantially
        similar name, trade name, or trademark as the person
        located in this State; and
            B. the retailer provides a commission or other
        consideration to the person located in this State based
        upon the sale of tangible personal property by the
        retailer.
    The provisions of this paragraph 1.2 shall apply only if
    the cumulative gross receipts from sales of tangible
    personal property by the retailer to customers in this
    State under all such contracts exceed $10,000 during the
    preceding 4 quarterly periods ending on the last day of
    March, June, September, and December.
        2. A retailer soliciting orders for tangible personal
    property by means of a telecommunication or television
    shopping system (which utilizes toll free numbers) which is
    intended by the retailer to be broadcast by cable
    television or other means of broadcasting, to consumers
    located in this State.
        3. A retailer, pursuant to a contract with a
    broadcaster or publisher located in this State, soliciting
    orders for tangible personal property by means of
    advertising which is disseminated primarily to consumers
    located in this State and only secondarily to bordering
    jurisdictions.
        4. A retailer soliciting orders for tangible personal
    property by mail if the solicitations are substantial and
    recurring and if the retailer benefits from any banking,
    financing, debt collection, telecommunication, or
    marketing activities occurring in this State or benefits
    from the location in this State of authorized installation,
    servicing, or repair facilities.
        5. A retailer that is owned or controlled by the same
    interests that own or control any retailer engaging in
    business in the same or similar line of business in this
    State.
        6. A retailer having a franchisee or licensee operating
    under its trade name if the franchisee or licensee is
    required to collect the tax under this Section.
        7. A retailer, pursuant to a contract with a cable
    television operator located in this State, soliciting
    orders for tangible personal property by means of
    advertising which is transmitted or distributed over a
    cable television system in this State.
        8. A retailer engaging in activities in Illinois, which
    activities in the state in which the retail business
    engaging in such activities is located would constitute
    maintaining a place of business in that state.
    "Bulk vending machine" means a vending machine, containing
unsorted confections, nuts, toys, or other items designed
primarily to be used or played with by children which, when a
coin or coins of a denomination not larger than $0.50 are
inserted, are dispensed in equal portions, at random and
without selection by the customer.
(Source: P.A. 95-723, eff. 6-23-08; 96-1544, eff. 3-10-11;
09800HB2317enr.)
 
    Section 10. If and only if House Bill 2317 of the 98th
General Assembly becomes law, then the Retailers' Occupation
Tax Act is amended by changing Section 1 as follows:
 
    (35 ILCS 120/1)  (from Ch. 120, par. 440)
    Sec. 1. Definitions. "Sale at retail" means any transfer of
the ownership of or title to tangible personal property to a
purchaser, for the purpose of use or consumption, and not for
the purpose of resale in any form as tangible personal property
to the extent not first subjected to a use for which it was
purchased, for a valuable consideration: Provided that the
property purchased is deemed to be purchased for the purpose of
resale, despite first being used, to the extent to which it is
resold as an ingredient of an intentionally produced product or
byproduct of manufacturing. For this purpose, slag produced as
an incident to manufacturing pig iron or steel and sold is
considered to be an intentionally produced byproduct of
manufacturing. Transactions whereby the possession of the
property is transferred but the seller retains the title as
security for payment of the selling price shall be deemed to be
sales.
    "Sale at retail" shall be construed to include any transfer
of the ownership of or title to tangible personal property to a
purchaser, for use or consumption by any other person to whom
such purchaser may transfer the tangible personal property
without a valuable consideration, and to include any transfer,
whether made for or without a valuable consideration, for
resale in any form as tangible personal property unless made in
compliance with Section 2c of this Act.
    Sales of tangible personal property, which property, to the
extent not first subjected to a use for which it was purchased,
as an ingredient or constituent, goes into and forms a part of
tangible personal property subsequently the subject of a "Sale
at retail", are not sales at retail as defined in this Act:
Provided that the property purchased is deemed to be purchased
for the purpose of resale, despite first being used, to the
extent to which it is resold as an ingredient of an
intentionally produced product or byproduct of manufacturing.
    "Sale at retail" shall be construed to include any Illinois
florist's sales transaction in which the purchase order is
received in Illinois by a florist and the sale is for use or
consumption, but the Illinois florist has a florist in another
state deliver the property to the purchaser or the purchaser's
donee in such other state.
    Nonreusable tangible personal property that is used by
persons engaged in the business of operating a restaurant,
cafeteria, or drive-in is a sale for resale when it is
transferred to customers in the ordinary course of business as
part of the sale of food or beverages and is used to deliver,
package, or consume food or beverages, regardless of where
consumption of the food or beverages occurs. Examples of those
items include, but are not limited to nonreusable, paper and
plastic cups, plates, baskets, boxes, sleeves, buckets or other
containers, utensils, straws, placemats, napkins, doggie bags,
and wrapping or packaging materials that are transferred to
customers as part of the sale of food or beverages in the
ordinary course of business.
    The purchase, employment and transfer of such tangible
personal property as newsprint and ink for the primary purpose
of conveying news (with or without other information) is not a
purchase, use or sale of tangible personal property.
    A person whose activities are organized and conducted
primarily as a not-for-profit service enterprise, and who
engages in selling tangible personal property at retail
(whether to the public or merely to members and their guests)
is engaged in the business of selling tangible personal
property at retail with respect to such transactions, excepting
only a person organized and operated exclusively for
charitable, religious or educational purposes either (1), to
the extent of sales by such person to its members, students,
patients or inmates of tangible personal property to be used
primarily for the purposes of such person, or (2), to the
extent of sales by such person of tangible personal property
which is not sold or offered for sale by persons organized for
profit. The selling of school books and school supplies by
schools at retail to students is not "primarily for the
purposes of" the school which does such selling. The provisions
of this paragraph shall not apply to nor subject to taxation
occasional dinners, socials or similar activities of a person
organized and operated exclusively for charitable, religious
or educational purposes, whether or not such activities are
open to the public.
    A person who is the recipient of a grant or contract under
Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
serves meals to participants in the federal Nutrition Program
for the Elderly in return for contributions established in
amount by the individual participant pursuant to a schedule of
suggested fees as provided for in the federal Act is not
engaged in the business of selling tangible personal property
at retail with respect to such transactions.
    "Purchaser" means anyone who, through a sale at retail,
acquires the ownership of or title to tangible personal
property for a valuable consideration.
    "Reseller of motor fuel" means any person engaged in the
business of selling or delivering or transferring title of
motor fuel to another person other than for use or consumption.
No person shall act as a reseller of motor fuel within this
State without first being registered as a reseller pursuant to
Section 2c or a retailer pursuant to Section 2a.
    "Selling price" or the "amount of sale" means the
consideration for a sale valued in money whether received in
money or otherwise, including cash, credits, property, other
than as hereinafter provided, and services, but not including
the value of or credit given for traded-in tangible personal
property where the item that is traded-in is of like kind and
character as that which is being sold, and shall be determined
without any deduction on account of the cost of the property
sold, the cost of materials used, labor or service cost or any
other expense whatsoever, but does not include charges that are
added to prices by sellers on account of the seller's tax
liability under this Act, or on account of the seller's duty to
collect, from the purchaser, the tax that is imposed by the Use
Tax Act, or, except as otherwise provided with respect to any
cigarette tax imposed by a home rule unit, on account of the
seller's tax liability under any local occupation tax
administered by the Department, or, except as otherwise
provided with respect to any cigarette tax imposed by a home
rule unit on account of the seller's duty to collect, from the
purchasers, the tax that is imposed under any local use tax
administered by the Department. Effective December 1, 1985,
"selling price" shall include charges that are added to prices
by sellers on account of the seller's tax liability under the
Cigarette Tax Act, on account of the sellers' duty to collect,
from the purchaser, the tax imposed under the Cigarette Use Tax
Act, and on account of the seller's duty to collect, from the
purchaser, any cigarette tax imposed by a home rule unit.
    Notwithstanding any law to the contrary, for any motor
vehicle, as defined in Section 1-146 of the Vehicle Code, that
is sold on or after January 1, 2015 July 1, 2014 for the
purpose of leasing the vehicle for a defined period that is
longer than one year and (1) is a motor vehicle of the second
division that: (A) is a self-contained motor vehicle designed
or permanently converted to provide living quarters for
recreational, camping, or travel use, with direct walk through
access to the living quarters from the driver's seat; (B) is of
the van configuration designed for the transportation of not
less than 7 nor more than 16 passengers; or (C) has a gross
vehicle weight rating of 8,000 pounds or less or (2) is a motor
vehicle of the first division, "selling price" or "amount of
sale" means the consideration received by the lessor pursuant
to the lease contract, including amounts due at lease signing
and all monthly or other regular payments charged over the term
of the lease. Also included in the selling price is any amount
received by the lessor from the lessee for the leased vehicle
that is not calculated at the time the lease is executed,
including, but not limited to, excess mileage charges and
charges for excess wear and tear. For sales that occur in
Illinois, with respect to any amount received by the lessor
from the lessee for the leased vehicle that is not calculated
at the time the lease is executed, the lessor who purchased the
motor vehicle does not incur the tax imposed by the Use Tax Act
on those amounts, and the retailer who makes the retail sale of
the motor vehicle to the lessor is not required to collect the
tax imposed by the Use Tax Act or to pay the tax imposed by this
Act on those amounts. However, the lessor who purchased the
motor vehicle assumes the liability for reporting and paying
the tax on those amounts directly to the Department in the same
form (Illinois Retailers' Occupation Tax, and local retailers'
occupation taxes, if applicable) in which the retailer would
have reported and paid such tax if the retailer had accounted
for the tax to the Department. For amounts received by the
lessor from the lessee that are not calculated at the time the
lease is executed, the lessor must file the return and pay the
tax to the Department by the due date otherwise required by
this Act for returns other than transaction returns. If the
retailer is entitled under this Act to a discount for
collecting and remitting the tax imposed under this Act to the
Department with respect to the sale of the motor vehicle to the
lessor, then the right to the discount provided in this Act
shall be transferred to the lessor with respect to the tax paid
by the lessor for any amount received by the lessor from the
lessee for the leased vehicle that is not calculated at the
time the lease is executed; provided that the discount is only
allowed if the return is timely filed and for amounts timely
paid. The "selling price" of a motor vehicle that is sold on or
after January 1, 2015 July 1, 2014 for the purpose of leasing
for a defined period of longer than one year shall not be
reduced by the value of or credit given for traded-in tangible
personal property owned by the lessor, nor shall it be reduced
by the value of or credit given for traded-in tangible personal
property owned by the lessee, regardless of whether the
trade-in value thereof is assigned by the lessee to the lessor.
In the case of a motor vehicle that is sold for the purpose of
leasing for a defined period of longer than one year, the sale
occurs at the time of the delivery of the vehicle, regardless
of the due date of any lease payments. A lessor who incurs a
Retailers' Occupation Tax liability on the sale of a motor
vehicle coming off lease may not take a credit against that
liability for the Use Tax the lessor paid upon the purchase of
the motor vehicle (or for any tax the lessor paid with respect
to any amount received by the lessor from the lessee for the
leased vehicle that was not calculated at the time the lease
was executed) if the selling price of the motor vehicle at the
time of purchase was calculated using the definition of
"selling price" as defined in this paragraph. Notwithstanding
any other provision of this Act to the contrary, lessors shall
file all returns and make all payments required under this
paragraph to the Department by electronic means in the manner
and form as required by the Department. This paragraph does not
apply to leases of motor vehicles for which, at the time the
lease is entered into, the term of the lease is not a defined
period, including leases with a defined initial period with the
option to continue the lease on a month-to-month or other basis
beyond the initial defined period.
    The phrase "like kind and character" shall be liberally
construed (including but not limited to any form of motor
vehicle for any form of motor vehicle, or any kind of farm or
agricultural implement for any other kind of farm or
agricultural implement), while not including a kind of item
which, if sold at retail by that retailer, would be exempt from
retailers' occupation tax and use tax as an isolated or
occasional sale.
    "Gross receipts" from the sales of tangible personal
property at retail means the total selling price or the amount
of such sales, as hereinbefore defined. In the case of charge
and time sales, the amount thereof shall be included only as
and when payments are received by the seller. Receipts or other
consideration derived by a seller from the sale, transfer or
assignment of accounts receivable to a wholly owned subsidiary
will not be deemed payments prior to the time the purchaser
makes payment on such accounts.
    "Department" means the Department of Revenue.
    "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.
    The isolated or occasional sale of tangible personal
property at retail by a person who does not hold himself out as
being engaged (or who does not habitually engage) in selling
such tangible personal property at retail, or a sale through a
bulk vending machine, does not constitute engaging in a
business of selling such tangible personal property at retail
within the meaning of this Act; provided that any person who is
engaged in a business which is not subject to the tax imposed
by this Act because of involving the sale of or a contract to
sell real estate or a construction contract to improve real
estate or a construction contract to engineer, install, and
maintain an integrated system of products, but who, in the
course of conducting such business, transfers tangible
personal property to users or consumers in the finished form in
which it was purchased, and which does not become real estate
or was not engineered and installed, under any provision of a
construction contract or real estate sale or real estate sales
agreement entered into with some other person arising out of or
because of such nontaxable business, is engaged in the business
of selling tangible personal property at retail to the extent
of the value of the tangible personal property so transferred.
If, in such a transaction, a separate charge is made for the
tangible personal property so transferred, the value of such
property, for the purpose of this Act, shall be the amount so
separately charged, but not less than the cost of such property
to the transferor; if no separate charge is made, the value of
such property, for the purposes of this Act, is the cost to the
transferor of such tangible personal property. Construction
contracts for the improvement of real estate consisting of
engineering, installation, and maintenance of voice, data,
video, security, and all telecommunication systems do not
constitute engaging in a business of selling tangible personal
property at retail within the meaning of this Act if they are
sold at one specified contract price.
    A person who holds himself or herself out as being engaged
(or who habitually engages) in selling tangible personal
property at retail is a person engaged in the business of
selling tangible personal property at retail hereunder with
respect to such sales (and not primarily in a service
occupation) notwithstanding the fact that such person designs
and produces such tangible personal property on special order
for the purchaser and in such a way as to render the property
of value only to such purchaser, if such tangible personal
property so produced on special order serves substantially the
same function as stock or standard items of tangible personal
property that are sold at retail.
    Persons who engage in the business of transferring tangible
personal property upon the redemption of trading stamps are
engaged in the business of selling such property at retail and
shall be liable for and shall pay the tax imposed by this Act
on the basis of the retail value of the property transferred
upon redemption of such stamps.
    "Bulk vending machine" means a vending machine, containing
unsorted confections, nuts, toys, or other items designed
primarily to be used or played with by children which, when a
coin or coins of a denomination not larger than $0.50 are
inserted, are dispensed in equal portions, at random and
without selection by the customer.
(Source: P.A. 95-723, eff. 6-23-08; 09800HB2317enr.)
 
    Section 15. The Illinois Vehicle Code is amended by
changing Section 5-501 as follows:
 
    (625 ILCS 5/5-501)  (from Ch. 95 1/2, par. 5-501)
    Sec. 5-501. Denial, suspension or revocation or
cancellation of a license.
    (a) The license of a person issued under this Chapter may
be denied, revoked or suspended if the Secretary of State finds
that the applicant, or the officer, director, shareholder
having a ten percent or greater ownership interest in the
corporation, owner, partner, trustee, manager, employee or the
licensee has:
        1. Violated this Act;
        2. Made any material misrepresentation to the
    Secretary of State in connection with an application for a
    license, junking certificate, salvage certificate, title
    or registration;
        3. Committed a fraudulent act in connection with
    selling, bartering, exchanging, offering for sale or
    otherwise dealing in vehicles, chassis, essential parts,
    or vehicle shells;
        4. As a new vehicle dealer has no contract with a
    manufacturer or enfranchised distributor to sell that new
    vehicle in this State;
        5. Not maintained an established place of business as
    defined in this Code;
        6. Failed to file or produce for the Secretary of State
    any application, report, document or other pertinent
    books, records, documents, letters, contracts, required to
    be filed or produced under this Code or any rule or
    regulation made by the Secretary of State pursuant to this
    Code;
        7. Previously had, within 3 years, such a license
    denied, suspended, revoked, or cancelled under the
    provisions of subsection (c)(2) of this Section;
        8. Has committed in any calendar year 3 or more
    violations, as determined in any civil or criminal
    proceeding, of any one or more of the following Acts:
            a. the "Consumer Finance Act";
            b. the "Consumer Installment Loan Act";
            c. the "Retail Installment Sales Act";
            d. the "Motor Vehicle Retail Installment Sales
        Act";
            e. "An Act in relation to the rate of interest and
        other charges in connection with sales on credit and
        the lending of money", approved May 24, 1879, as
        amended;
            f. "An Act to promote the welfare of wage-earners
        by regulating the assignment of wages, and prescribing
        a penalty for the violation thereof", approved July 1,
        1935, as amended;
            g. Part 8 of Article XII of the Code of Civil
        Procedure; or
            h. the "Consumer Fraud Act";
        9. Failed to pay any fees or taxes due under this Act,
    or has failed to transmit any fees or taxes received by him
    for transmittal by him to the Secretary of State or the
    State of Illinois;
        10. Converted an abandoned vehicle;
        11. Used a vehicle identification plate or number
    assigned to a vehicle other than the one to which
    originally assigned;
        12. Violated the provisions of Chapter 5 of this Act,
    as amended;
        13. Violated the provisions of Chapter 4 of this Act,
    as amended;
        14. Violated the provisions of Chapter 3 of this Act,
    as amended;
        15. Violated Section 21-2 of the Criminal Code of 1961
    or the Criminal Code of 2012, Criminal Trespass to
    Vehicles;
        16. Made or concealed a material fact in connection
    with his application for a license;
        17. Acted in the capacity of a person licensed or acted
    as a licensee under this Chapter without having a license
    therefor;
        18. Failed to pay, within 90 days after a final
    judgment, any fines assessed against the licensee pursuant
    to an action brought under Section 5-404;
        19. Failed to pay the Dealer Recovery Trust Fund fee
    under Section 5-102.7 of this Code;
        20. Failed to pay, within 90 days after notice has been
    given, any fine or fee owed as a result of an
    administrative citation issued by the Secretary under this
    Code.
    (b) In addition to other grounds specified in this Chapter,
the Secretary of State, on complaint of the Department of
Revenue, shall refuse the issuance or renewal of a license, or
suspend or revoke such license, for any of the following
violations of the "Retailers' Occupation Tax Act", the tax
imposed on corporations under subsection (b) of Section 201 of
the Illinois Income Tax Act, the Personal Property Tax
Replacement Income Tax imposed under subsections (c) and (d) of
Section 201 of the Illinois Income Tax Act, or the tax imposed
under Section 704A of the Illinois Income Tax Act:
        1. Failure to make a tax return;
        2. The filing of a fraudulent return;
        3. Failure to pay all or part of any tax or penalty
    finally determined to be due;
        4. Failure to comply with the bonding requirements of
    the "Retailers' Occupation Tax Act".
    (b-1) In addition to other grounds specified in this
Chapter, the Secretary of State, on complaint of the Motor
Vehicle Review Board, shall refuse the issuance or renewal of a
license, or suspend or revoke that license, if costs or fees
assessed under Section 29 or Section 30 of the Motor Vehicle
Franchise Act have remained unpaid for a period in excess of 90
days after the licensee received from the Motor Vehicle Board a
second notice and demand for the costs or fees. The Motor
Vehicle Review Board must send the licensee written notice and
demand for payment of the fees or costs at least 2 times, and
the second notice and demand must be sent by certified mail.
    (c) Cancellation of a license.
        1. The license of a person issued under this Chapter
    may be cancelled by the Secretary of State prior to its
    expiration in any of the following situations:
            A. When a license is voluntarily surrendered, by
        the licensed person; or
            B. If the business enterprise is a sole
        proprietorship, which is not a franchised dealership,
        when the sole proprietor dies or is imprisoned for any
        period of time exceeding 30 days; or
            C. If the license was issued to the wrong person or
        corporation, or contains an error on its face. If any
        person above whose license has been cancelled wishes to
        apply for another license, whether during the same
        license year or any other year, that person shall be
        treated as any other new applicant and the cancellation
        of the person's prior license shall not, in and of
        itself, be a bar to the issuance of a new license.
        2. The license of a person issued under this Chapter
    may be cancelled without a hearing when the Secretary of
    State is notified that the applicant, or any officer,
    director, shareholder having a 10 per cent or greater
    ownership interest in the corporation, owner, partner,
    trustee, manager, employee or member of the applicant or
    the licensee has been convicted of any felony involving the
    selling, bartering, exchanging, offering for sale, or
    otherwise dealing in vehicles, chassis, essential parts,
    vehicle shells, or ownership documents relating to any of
    the above items.
(Source: P.A. 97-480, eff. 10-1-11; 97-838, eff. 7-20-12;
97-1150, eff. 1-25-13.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.