101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB3563

 

Introduced 2/14/2020, by Sen. John F. Curran

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 505/13  from Ch. 120, par. 429

    Amends the Motor Fuel Tax Law. In a provision concerning refunds, allows claims for taxes paid for undyed diesel fuel used by vehicles operated by a municipal fire department or a fire protection district recognized by the Office of the State Fire Marshal. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Motor Fuel Tax Law is amended by changing
5Section 13 as follows:
 
6    (35 ILCS 505/13)  (from Ch. 120, par. 429)
7    Sec. 13. Refund of tax paid. Any person other than a
8distributor or supplier, who loses motor fuel through any cause
9or uses motor fuel (upon which he has paid the amount required
10to be collected under Section 2 of this Act) for any purpose
11other than operating a motor vehicle upon the public highways
12or waters, shall be reimbursed and repaid the amount so paid.
13    Any person who purchases motor fuel in Illinois and uses
14that motor fuel in another state and that other state imposes a
15tax on the use of such motor fuel shall be reimbursed and
16repaid the amount of Illinois tax paid under Section 2 of this
17Act on the motor fuel used in such other state. Reimbursement
18and repayment shall be made by the Department upon receipt of
19adequate proof of taxes directly paid to another state and the
20amount of motor fuel used in that state.
21    Claims based in whole or in part on taxes paid to another
22state shall include (i) a certified copy of the tax return
23filed with such other state by the claimant; (ii) a copy of

 

 

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1either the cancelled check paying the tax due on such return,
2or a receipt acknowledging payment of the tax due on such tax
3return; and (iii) such other information as the Department may
4reasonably require. This paragraph shall not apply to taxes
5paid on returns filed under Section 13a.3 of this Act.
6    Any person who purchases motor fuel use tax decals as
7required by Section 13a.4 and pays an amount of fees for such
8decals that exceeds the amount due shall be reimbursed and
9repaid the amount of the decal fees that are deemed by the
10department to be in excess of the amount due. Alternatively,
11any person who purchases motor fuel use tax decals as required
12by Section 13a.4 may credit any excess decal payment verified
13by the Department against amounts subsequently due for the
14purchase of additional decals, until such time as no excess
15payment remains.
16    Claims for such reimbursement must be made to the
17Department of Revenue, duly verified by the claimant (or by the
18claimant's legal representative if the claimant has died or
19become a person under legal disability), upon forms prescribed
20by the Department. The claim must state such facts relating to
21the purchase, importation, manufacture or production of the
22motor fuel by the claimant as the Department may deem
23necessary, and the time when, and the circumstances of its loss
24or the specific purpose for which it was used (as the case may
25be), together with such other information as the Department may
26reasonably require. No claim based upon idle time shall be

 

 

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1allowed. Claims for reimbursement for overpayment of decal fees
2shall be made to the Department of Revenue, duly verified by
3the claimant (or by the claimant's legal representative if the
4claimant has died or become a person under legal disability),
5upon forms prescribed by the Department. The claim shall state
6facts relating to the overpayment of decal fees, together with
7such other information as the Department may reasonably
8require. Claims for reimbursement of overpayment of decal fees
9paid on or after January 1, 2011 must be filed not later than
10one year after the date on which the fees were paid by the
11claimant. If it is determined that the Department should
12reimburse a claimant for overpayment of decal fees, the
13Department shall first apply the amount of such refund against
14any tax or penalty or interest due by the claimant under
15Section 13a of this Act.
16    Claims for full reimbursement for taxes paid on or before
17December 31, 1999 must be filed not later than one year after
18the date on which the tax was paid by the claimant. If,
19however, a claim for such reimbursement otherwise meeting the
20requirements of this Section is filed more than one year but
21less than 2 years after that date, the claimant shall be
22reimbursed at the rate of 80% of the amount to which he would
23have been entitled if his claim had been timely filed.
24    Claims for full reimbursement for taxes paid on or after
25January 1, 2000 must be filed not later than 2 years after the
26date on which the tax was paid by the claimant.

 

 

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1    The Department may make such investigation of the
2correctness of the facts stated in such claims as it deems
3necessary. When the Department has approved any such claim, it
4shall pay to the claimant (or to the claimant's legal
5representative, as such if the claimant has died or become a
6person under legal disability) the reimbursement provided in
7this Section, out of any moneys appropriated to it for that
8purpose.
9    Any distributor or supplier who has paid the tax imposed by
10Section 2 of this Act upon motor fuel lost or used by such
11distributor or supplier for any purpose other than operating a
12motor vehicle upon the public highways or waters may file a
13claim for credit or refund to recover the amount so paid. Such
14claims shall be filed on forms prescribed by the Department.
15Such claims shall be made to the Department, duly verified by
16the claimant (or by the claimant's legal representative if the
17claimant has died or become a person under legal disability),
18upon forms prescribed by the Department. The claim shall state
19such facts relating to the purchase, importation, manufacture
20or production of the motor fuel by the claimant as the
21Department may deem necessary and the time when the loss or
22nontaxable use occurred, and the circumstances of its loss or
23the specific purpose for which it was used (as the case may
24be), together with such other information as the Department may
25reasonably require. Claims must be filed not later than one
26year after the date on which the tax was paid by the claimant.

 

 

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1    The Department may make such investigation of the
2correctness of the facts stated in such claims as it deems
3necessary. When the Department approves a claim, the Department
4shall issue a refund or credit memorandum as requested by the
5taxpayer, to the distributor or supplier who made the payment
6for which the refund or credit is being given or, if the
7distributor or supplier has died or become incompetent, to such
8distributor's or supplier's legal representative, as such. The
9amount of such credit memorandum shall be credited against any
10tax due or to become due under this Act from the distributor or
11supplier who made the payment for which credit has been given.
12    Any credit or refund that is allowed under this Section
13shall bear interest at the rate and in the manner specified in
14the Uniform Penalty and Interest Act.
15    In case the distributor or supplier requests and the
16Department determines that the claimant is entitled to a
17refund, such refund shall be made only from such appropriation
18as may be available for that purpose. If it appears unlikely
19that the amount appropriated would permit everyone having a
20claim allowed during the period covered by such appropriation
21to elect to receive a cash refund, the Department, by rule or
22regulation, shall provide for the payment of refunds in
23hardship cases and shall define what types of cases qualify as
24hardship cases.
25    In any case in which there has been an erroneous refund of
26tax or fees payable under this Section, a notice of tax

 

 

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1liability may be issued at any time within 3 years from the
2making of that refund, or within 5 years from the making of
3that refund if it appears that any part of the refund was
4induced by fraud or the misrepresentation of material fact. The
5amount of any proposed assessment set forth by the Department
6shall be limited to the amount of the erroneous refund.
7    If no tax is due and no proceeding is pending to determine
8whether such distributor or supplier is indebted to the
9Department for tax, the credit memorandum so issued may be
10assigned and set over by the lawful holder thereof, subject to
11reasonable rules of the Department, to any other licensed
12distributor or supplier who is subject to this Act, and the
13amount thereof applied by the Department against any tax due or
14to become due under this Act from such assignee.
15    If the payment for which the distributor's or supplier's
16claim is filed is held in the protest fund of the State
17Treasury during the pendency of the claim for credit
18proceedings pursuant to the order of the court in accordance
19with Section 2a of the State Officers and Employees Money
20Disposition Act and if it is determined by the Department or by
21the final order of a reviewing court under the Administrative
22Review Law that the claimant is entitled to all or a part of
23the credit claimed, the claimant, instead of receiving a credit
24memorandum from the Department, shall receive a cash refund
25from the protest fund as provided for in Section 2a of the
26State Officers and Employees Money Disposition Act.

 

 

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1    If any person ceases to be licensed as a distributor or
2supplier while still holding an unused credit memorandum issued
3under this Act, such person may, at his election (instead of
4assigning the credit memorandum to a licensed distributor or
5licensed supplier under this Act), surrender such unused credit
6memorandum to the Department and receive a refund of the amount
7to which such person is entitled.
8    For claims based upon taxes paid on or before December 31,
92000, a claim based upon the use of undyed diesel fuel shall
10not be allowed except (i) if allowed under the following
11paragraph or (ii) for undyed diesel fuel used by a commercial
12vehicle, as that term is defined in Section 1-111.8 of the
13Illinois Vehicle Code, for any purpose other than operating the
14commercial vehicle upon the public highways and unlicensed
15commercial vehicles operating on private property. Claims
16shall be limited to commercial vehicles that are operated for
17both highway purposes and any purposes other than operating
18such vehicles upon the public highways.
19    For claims based upon taxes paid on or after January 1,
202000, a claim based upon the use of undyed diesel fuel shall
21not be allowed except (i) if allowed under the preceding
22paragraph or (ii) for claims for the following:
23        (1) Undyed diesel fuel used (i) in a manufacturing
24    process, as defined in Section 2-45 of the Retailers'
25    Occupation Tax Act, wherein the undyed diesel fuel becomes
26    a component part of a product or by-product, other than

 

 

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1    fuel or motor fuel, when the use of dyed diesel fuel in
2    that manufacturing process results in a product that is
3    unsuitable for its intended use or (ii) for testing
4    machinery and equipment in a manufacturing process, as
5    defined in Section 2-45 of the Retailers' Occupation Tax
6    Act, wherein the testing takes place on private property.
7        (2) Undyed diesel fuel used by a manufacturer on
8    private property in the research and development, as
9    defined in Section 1.29, of machinery or equipment intended
10    for manufacture.
11        (3) Undyed diesel fuel used by a single unit
12    self-propelled agricultural fertilizer implement, designed
13    for on and off road use, equipped with flotation tires and
14    specially adapted for the application of plant food
15    materials or agricultural chemicals.
16        (4) Undyed diesel fuel used by a commercial motor
17    vehicle for any purpose other than operating the commercial
18    motor vehicle upon the public highways. Claims shall be
19    limited to commercial motor vehicles that are operated for
20    both highway purposes and any purposes other than operating
21    such vehicles upon the public highways.
22        (5) Undyed diesel fuel used by a unit of local
23    government in its operation of an airport if the undyed
24    diesel fuel is used directly in airport operations on
25    airport property.
26        (6) Undyed diesel fuel used by refrigeration units that

 

 

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1    are permanently mounted to a semitrailer, as defined in
2    Section 1.28 of this Law, wherein the refrigeration units
3    have a fuel supply system dedicated solely for the
4    operation of the refrigeration units.
5        (7) Undyed diesel fuel used by power take-off equipment
6    as defined in Section 1.27 of this Law.
7        (8) Beginning on the effective date of this amendatory
8    Act of the 94th General Assembly, undyed diesel fuel used
9    by tugs and spotter equipment to shift vehicles or parcels
10    on both private and airport property. Any claim under this
11    item (8) may be made only by a claimant that owns tugs and
12    spotter equipment and operates that equipment on both
13    private and airport property. The aggregate of all credits
14    or refunds resulting from claims filed under this item (8)
15    by a claimant in any calendar year may not exceed $100,000.
16    A claim may not be made under this item (8) by the same
17    claimant more often than once each quarter. For the
18    purposes of this item (8), "tug" means a vehicle designed
19    for use on airport property that shifts custom-designed
20    containers of parcels from loading docks to aircraft, and
21    "spotter equipment" means a vehicle designed for use on
22    both private and airport property that shifts trailers
23    containing parcels between staging areas and loading
24    docks.
25        (9) Beginning on the effective date of this amendatory
26    Act of the 101st General Assembly, undyed diesel fuel used

 

 

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1    by vehicles operated by a municipal fire department or a
2    fire protection district recognized by the Office of the
3    State Fire Marshal. A claim may not be made under this item
4    (9) by the same claimant more often than once each calendar
5    quarter.
6    Any person who has paid the tax imposed by Section 2 of
7this Law upon undyed diesel fuel that is unintentionally mixed
8with dyed diesel fuel and who owns or controls the mixture of
9undyed diesel fuel and dyed diesel fuel may file a claim for
10refund to recover the amount paid. The amount of undyed diesel
11fuel unintentionally mixed must equal 500 gallons or more. Any
12claim for refund of unintentionally mixed undyed diesel fuel
13and dyed diesel fuel shall be supported by documentation
14showing the date and location of the unintentional mixing, the
15number of gallons involved, the disposition of the mixed diesel
16fuel, and any other information that the Department may
17reasonably require. Any unintentional mixture of undyed diesel
18fuel and dyed diesel fuel shall be sold or used only for
19non-highway purposes.
20    The Department shall promulgate regulations establishing
21specific limits on the amount of undyed diesel fuel that may be
22claimed for refund.
23    For purposes of claims for refund, "loss" means the
24reduction of motor fuel resulting from fire, theft, spillage,
25spoilage, leakage, or any other provable cause, but does not
26include a reduction resulting from evaporation, or shrinkage

 

 

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1due to temperature variations. In the case of losses due to
2fire or theft, the claimant must include fire department or
3police department reports and any other documentation that the
4Department may require.
5(Source: P.A. 100-1171, eff. 1-4-19.)
 
6    Section 99. Effective date. This Act takes effect upon
7becoming law.