HB0826 101ST GENERAL ASSEMBLY

LRB101 00256 HLH 45260 b

101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB0826

Introduced , by Rep. Kelly M. Burke

SYNOPSIS AS INTRODUCED:

65 ILCS 5/8-11-2.7 new

Amends the Illinois Municipal Code. Creates the Municipal Gas Use Tax Law. Provides that beginning January 1, 2020, a municipality may impose a self-assessing purchaser tax rate of the lower of 2.4 cents per therm or 5% of the purchase price for the privilege of using in the municipality gas obtained in a purchase of out-of-state gas. Provides that, in the alternative, a purchaser may elect for a tax of 2.4 cents per therm that a delivering supplier maintaining a place of business in the State collects from the purchaser. Provides for registration requirements for self-assessing purchasers and delivering suppliers. Includes procedures for self-assessing purchasers and delivering suppliers to submit returns and to remit the tax to the Department of Revenue. Effective January 1, 2020.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning local government.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Municipal Code is amended by adding Section 8-11-2.7 as follows:

(65 ILCS 5/8-11-2.7 new)

Sec. 8-11-2.7. Municipal Gas Use Tax.

(a) This Section may be cited as the Municipal Gas Use Tax Law.

(b) As used in this Section:

"Delivering supplier" means a person engaged in the business of delivering gas to another person for use or consumption and not for resale, and who, in any case where more than one person participates in the delivery of gas to a specific purchaser, is the last of the suppliers engaged in delivering the gas prior to its receipt by the purchaser.

"Delivering supplier maintaining a place of business in this State" means any delivering supplier having or maintaining within this State, directly or by a subsidiary, an office, distribution facility, sales office, or other place of business, or any employee, agent, or other representative operating within this State under the authority of the delivering supplier or the delivering supplier's subsidiary, irrespective of whether the place of business or agent or other representative is located in this State permanently or temporarily, or whether the delivering supplier or the delivering supplier's subsidiary is licensed to do business in this State.

"Department" means the Department of Revenue.

"Gas" means any gaseous fuel distributed through a pipeline system.

"Person" means any natural individual, firm, trust, estate, partnership, association, joint stock company, joint adventure, corporation, or limited liability company, any receiver, trustee, guardian, or other representative appointed by order of any court, or any city, town, county, or other political subdivision of this State.

"Purchase of out-of-State gas" means a transaction for the purchase of gas from any supplier in a manner that does not subject the seller of that gas to liability under the Gas Revenue Tax Act.

"Purchase price" means the consideration paid for the distribution, supply, furnishing, sale, transportation, or delivery of gas to a person for use or consumption and not for resale, and for all services directly related to the production, transportation, or distribution of gas distributed, supplied, furnished, sold, transmitted, or delivered for use or consumption, including cash, services, and property of every kind and nature. "Purchase price" does not include consideration paid for:

(1) a charge for a dishonored check;

(2) a finance or credit charge, penalty, charge for delayed payment, or discount for prompt payment;

(3) a charge for reconnection of service or for replacement or relocation of facilities;

(4) an advance or contribution in aid of construction.

(5) repair, inspection, or servicing of equipment located on customer premises;

(6) leasing or rental of equipment, the leasing or rental of which is not necessary to furnishing, supplying, or selling gas;

(7) a purchase by a purchaser if the supplier is prohibited by a federal or State constitution, treaty, convention, statute, or court decision from recovering the related tax liability from such purchaser; or

(8) an amount added to a purchaser's bill because of changes made pursuant to the tax imposed by the municipality.

(c) The privilege of using or consuming gas acquired in a purchase at retail and used or consumed within the corporate limits of a municipality may be taxed at rates not to exceed the maximum rates, calculated on a monthly basis for each purchaser, as provided in this Section.

(d) Beginning January 1, 2020, a municipality may impose upon the privilege of using in the municipality gas obtained in a purchase of out-of-state gas at the rate of 2.4 cents per therm or 5% of the purchase price for the billing period, whichever is the lower rate. This tax rate is the self-assessing purchaser tax rate. Beginning with bills issued by delivering suppliers on and after January 1, 2020 to purchasers within a municipality imposing a tax pursuant to this Section, purchasers may elect an alternative tax rate of 2.4 cents per therm to be paid under the provisions of subsection (e) to a delivering supplier maintaining a place of business in this State. This tax rate is the alternate tax rate.

(e) Beginning with bills issued on and after January 1, 2020, a delivering supplier maintaining a place of business in this State shall collect from the purchasers within a municipality imposing a tax pursuant to this Section who have elected the alternate tax rate provided in subsection (d) the tax that is imposed by the municipality at the alternate 2.4 cents per therm rate. The tax imposed at the alternate tax rate shall, when collected, be stated as a distinct and separate item apart from the selling price of the gas. The tax collected by a delivering supplier shall constitute a debt owed by that person to the municipality imposing the tax. Upon receipt by a delivering supplier of a copy of a certificate of registration issued to a self-assessing purchaser under subsection (f), the delivering supplier is relieved of the duty to collect the alternate tax from that self-assessing purchaser beginning with bills issued to that self-assessing purchaser 30 or more days after receipt of the copy of that certificate of registration.

(f) Any purchaser who does not elect the alternate tax rate to be paid to a delivering supplier shall register with the Department as a self-assessing purchaser and pay the tax imposed by subsection (d) directly to the Department at the self-assessing purchaser rate.

Application for a certificate of registration as a self-assessing purchaser shall be made to the Department on forms furnished by the Department and shall contain any reasonable information that the Department requires. The self-assessing purchaser shall disclose the name of the delivering supplier or suppliers who are delivering the gas upon which the self-assessing purchaser will be paying tax to the Department.

Upon receipt of an application for a certificate of registration in proper form, the Department shall issue to the applicant a certificate of registration as a self-assessing purchaser. The applicant shall provide a copy of the certificate of registration as a self-assessing purchaser to the applicant's delivering supplier or suppliers. A purchaser registering as a self-assessing purchaser may not revoke the registration for at least one year after registration.

(g) Except for purchasers who have chosen the alternate tax rate to be paid to a delivering supplier maintaining a place of business in this State, the tax imposed by the municipality pursuant to subsection (d) shall be paid to the Department directly by each self-assessing purchaser that is subject to the tax imposed by the municipality. Each self-assessing purchaser shall, on or before the 15th day of each month, make a return to the Department for the preceding calendar month, stating the following:

(1) the self-assessing purchaser's name and principal address;

(2) the total number of therms used by the self-assessing purchaser during the preceding calendar month and upon the basis of which the tax is imposed.

(3) the purchase price of gas used by the self-assessing purchaser during the preceding calendar month and upon the basis of which the tax is imposed;

(4) amount of tax (computed upon items (2) and (3)); and

(5) any other reasonable information the Department may require.

(h) A delivering supplier maintaining a place of business in this State who engages in the delivery of gas in this State shall register with the Department. A delivering supplier, if required to otherwise register pursuant to a tax imposed under Section 8-11-2 of this Code, need not obtain an additional certificate of registration under this Section, but shall be deemed to be sufficiently registered by virtue of that registration with the Department.

Application for a certificate of registration shall be made to the Department on forms furnished by the Department and shall contain any reasonable information the Department may require. Upon receipt of a completed application for a certificate of registration, the Department shall issue to the applicant a certificate of registration. The Department may deny a certificate of registration to any applicant if the applicant is in default for moneys due under this Section. A person aggrieved by a decision of the Department under this subsection may, within 20 days after notice of the decision, protest and request a hearing, whereupon the Department shall give notice to the person of the time and place fixed for the hearing, shall hold a hearing in conformity with the provisions of this Section, and then issue its final administrative decision in the matter to the person. In the absence of a protest within 20 days, the Department's decision shall become final without any further determination being made or notice given.

(i) A delivering supplier who is required under subsection (e) to collect the tax imposed by the municipality shall make a return to the Department on or before the 15th day of each month for the preceding calendar month stating the following:

(1) the delivering supplier's name;

(2) the address of the delivering supplier's principal place of business and the address of the principal place of business (if that is a different address) from which the delivering supplier engages in the business of delivering gas to persons for use or consumption and not for resale;

(3) the total number of therms of gas delivered to purchasers within a municipality imposing a tax pursuant to this Section during the preceding calendar month and upon the basis of which the tax is imposed;

(4) the amount of tax computed upon item (3); and

(5) any other reasonable information as the Department may require.

In making the return, the delivering supplier engaged in the business of delivering gas to persons for use or consumption and not for resale may use any reasonable method to derive reportable therms from the delivering supplier's billing and payment records.

Notwithstanding any other provision in this Section concerning the time within which a delivering supplier may file its return, in the case of a delivering supplier who ceases to engage in a kind of business that makes it responsible for filing returns with a municipality imposing a tax under this Section, the delivering supplier shall file a final return under this Section with the Department of the affected municipality not more than one month after discontinuing a kind of business that makes it responsible for filing returns with a municipality.

The delivering supplier making the return provided for in this Section shall, at the time of making the return, pay to the Department the amount of tax imposed by the municipality.

Section 99. Effective date. This Act takes effect January 1, 2020.