103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB4438

 

Introduced 1/16/2024, by Rep. Norine K. Hammond

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 173/5-10
35 ILCS 615/1  from Ch. 120, par. 467.16
35 ILCS 640/2-4

    Amends the Gas Use Tax Law. Exempts certain business enterprises from taxation under the Act. Amends the Gas Revenue Tax Act. Provides that the definition of "gross receipts" does not include consideration received from certain business enterprises. Amends the Electricity Excise Tax Law. Provides that the tax under the Act is not imposed with respect to any use by the purchaser in the process of manufacturing or assembling tangible personal property for wholesale or for retail sale or lease. Effective immediately.


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A BILL FOR

 

HB4438LRB103 36261 HLH 66358 b

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 Gas Use Tax Law is amended by changing
5Section 5-10 as follows:
 
6    (35 ILCS 173/5-10)
7    Sec. 5-10. Imposition of tax. Beginning October 1, 2003, a
8tax is imposed upon the privilege of using in this State gas
9obtained in a purchase of out-of-state gas at the rate of 2.4
10cents per therm or 5% of the purchase price for the billing
11period, whichever is the lower rate. Such tax rate shall be
12referred to as the "self-assessing purchaser tax rate".
13Beginning with bills issued by delivering suppliers on and
14after October 1, 2003, purchasers may elect an alternative tax
15rate of 2.4 cents per therm to be paid under the provisions of
16Section 5-15 of this Law to a delivering supplier maintaining
17a place of business in this State. Such tax rate shall be
18referred to as the "alternate tax rate".
19    The tax imposed under this Section shall not apply to gas
20used by business enterprises certified under Section 9-222.1
21of the Public Utilities Act, as amended, to the extent of such
22exemption and during the period of time specified by the
23Department of Commerce and Economic Opportunity.

 

 

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1    The tax imposed under this Section does not apply to gas
2used by any business enterprise that is properly assigned or
3included within one of the following Standard Industrial
4Classifications, as designated in the 1987 Standard Industrial
5Classification Manual prepared by the federal Office of
6Management and Budget: 10; 12; 13; 14; 21; 22; 23; 24; 25; 26;
727; 28; 29; 30; 31; 32; 33; 34; 35; 36; 37; 38; or 39.
8(Source: P.A. 93-31, eff. 10-1-03; 94-793, eff. 5-19-06.)
 
9    Section 10. The Gas Revenue Tax Act is amended by changing
10Section 1 as follows:
 
11    (35 ILCS 615/1)  (from Ch. 120, par. 467.16)
12    Sec. 1. For the purposes of this Act: "Gross receipts"
13means the consideration received for gas distributed,
14supplied, furnished or sold to persons for use or consumption
15and not for resale, and for all services (including the
16transportation or storage of gas for an end-user) rendered in
17connection therewith, and shall include cash, services and
18property of every kind or nature, and shall be determined
19without any deduction on account of the cost of the service,
20product or commodity supplied, the cost of materials used,
21labor or service costs, or any other expense whatsoever.
22However, "gross receipts" shall not include receipts from:
23        (i) any minimum or other charge for gas or gas service
24    where the customer has taken no therms of gas;

 

 

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1        (ii) any charge for a dishonored check;
2        (iii) any finance or credit charge, penalty or charge
3    for delayed payment, or discount for prompt payment;
4        (iv) any charge for reconnection of service or for
5    replacement or relocation of facilities;
6        (v) any advance or contribution in aid of
7    construction;
8        (vi) repair, inspection or servicing of equipment
9    located on customer premises;
10        (vii) leasing or rental of equipment, the leasing or
11    rental of which is not necessary to distributing,
12    furnishing, supplying, selling, transporting or storing
13    gas;
14        (viii) any sale to a customer if the taxpayer is
15    prohibited by federal or State constitution, treaty,
16    convention, statute or court decision from recovering the
17    related tax liability from such customer;
18        (ix) any charges added to customers' bills pursuant to
19    the provisions of Section 9-221 or Section 9-222 of the
20    Public Utilities Act, as amended, or any charges added to
21    customers' bills by taxpayers who are not subject to rate
22    regulation by the Illinois Commerce Commission for the
23    purpose of recovering any of the tax liabilities or other
24    amounts specified in such provisions of such Act; and
25        (x) prior to October 1, 2003, any charge for gas or gas
26    services to a customer who acquired contractual rights for

 

 

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1    the direct purchase of gas or gas services originating
2    from an out-of-state supplier or source on or before March
3    1, 1995, except for those charges solely related to the
4    local distribution of gas by a public utility. This
5    exemption includes any charge for gas or gas service,
6    except for those charges solely related to the local
7    distribution of gas by a public utility, to a customer who
8    maintained an account with a public utility (as defined in
9    Section 3-105 of the Public Utilities Act) for the
10    transportation of customer-owned gas on or before March 1,
11    1995. The provisions of this amendatory Act of 1997 are
12    intended to clarify, rather than change, existing law as
13    to the meaning and scope of this exemption. This exemption
14    (x) expires on September 30, 2003.
15    In case credit is extended, the amount thereof shall be
16included only as and when payments are received.
17    "Gross receipts" shall not include consideration received
18from business enterprises certified under Section 9-222.1 of
19the Public Utilities Act, as amended, to the extent of such
20exemption and during the period of time specified by the
21Department of Commerce and Economic Opportunity.
22    "Gross receipts" does not include consideration received
23from any business enterprise that is properly assigned or
24included within one of the following Standard Industrial
25Classifications, as designated in the 1987 Standard Industrial
26Classification Manual prepared by the federal Office of

 

 

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1Management and Budget: 10; 12; 13; 14; 21; 22; 23; 24; 25; 26;
227; 28; 29; 30; 31; 32; 33; 34; 35; 36; 37; 38; or 39.
3    "Department" means the Department of Revenue of the State
4of Illinois.
5    "Director" means the Director of Revenue for the
6Department of Revenue of the State of Illinois.
7    "Taxpayer" means a person engaged in the business of
8distributing, supplying, furnishing or selling gas for use or
9consumption and not for resale.
10    "Person" means any natural individual, firm, trust,
11estate, partnership, association, joint stock company, joint
12adventure, corporation, limited liability company, or a
13receiver, trustee, guardian or other representative appointed
14by order of any court, or any city, town, county or other
15political subdivision of this State.
16    "Invested capital" means that amount equal to (i) the
17average of the balances at the beginning and end of each
18taxable period of the taxpayer's total stockholder's equity
19and total long-term debt, less investments in and advances to
20all corporations, as set forth on the balance sheets included
21in the taxpayer's annual report to the Illinois Commerce
22Commission for the taxable period; (ii) multiplied by a
23fraction determined under Sections 301 and 304(a) of the
24"Illinois Income Tax Act" and reported on the Illinois income
25tax return for the taxable period ending in or with the taxable
26period in question. However, notwithstanding the income tax

 

 

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1return reporting requirement stated above, beginning July 1,
21979, no taxpayer's denominators used to compute the sales,
3property or payroll factors under subsection (a) of Section
4304 of the Illinois Income Tax Act shall include payroll,
5property or sales of any corporate entity other than the
6taxpayer for the purposes of determining an allocation for the
7invested capital tax. This amendatory Act of 1982, Public Act
882-1024, is not intended to and does not make any change in the
9meaning of any provision of this Act, it having been the intent
10of the General Assembly in initially enacting the definition
11of "invested capital" to provide for apportionment of the
12invested capital of each company, based solely upon the sales,
13property and payroll of that company.
14    "Taxable period" means each period which ends after the
15effective date of this Act and which is covered by an annual
16report filed by the taxpayer with the Illinois Commerce
17Commission.
18(Source: P.A. 93-31, eff. 10-1-03; 94-793, eff. 5-19-06.)
 
19    Section 15. The Electricity Excise Tax Law is amended by
20changing Section 2-4 as follows:
 
21    (35 ILCS 640/2-4)
22    Sec. 2-4. Tax imposed.
23    (a) Except as provided in subsection (b), a tax is imposed
24on the privilege of using in this State electricity purchased

 

 

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1for use or consumption and not for resale, other than by
2municipal corporations owning and operating a local
3transportation system for public service, at the following
4rates per kilowatt-hour delivered to the purchaser:
5        (i) For the first 2000 kilowatt-hours used or consumed
6    in a month: 0.330 cents per kilowatt-hour;
7        (ii) For the next 48,000 kilowatt-hours used or
8    consumed in a month: 0.319 cents per kilowatt-hour;
9        (iii) For the next 50,000 kilowatt-hours used or
10    consumed in a month: 0.303 cents per kilowatt-hour;
11        (iv) For the next 400,000 kilowatt-hours used or
12    consumed in a month: 0.297 cents per kilowatt-hour;
13        (v) For the next 500,000 kilowatt-hours used or
14    consumed in a month: 0.286 cents per kilowatt-hour;
15        (vi) For the next 2,000,000 kilowatt-hours used or
16    consumed in a month: 0.270 cents per kilowatt-hour;
17        (vii) For the next 2,000,000 kilowatt-hours used or
18    consumed in a month: 0.254 cents per kilowatt-hour;
19        (viii) For the next 5,000,000 kilowatt-hours used or
20    consumed in a month: 0.233 cents per kilowatt-hour;
21        (ix) For the next 10,000,000 kilowatt-hours used or
22    consumed in a month: 0.207 cents per kilowatt-hour;
23        (x) For all electricity in excess of 20,000,000
24    kilowatt-hours used or consumed in a month: 0.202 cents
25    per kilowatt-hour.
26    Provided, that in lieu of the foregoing rates, the tax is

 

 

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1imposed on a self-assessing purchaser at the rate of 5.1% of
2the self-assessing purchaser's purchase price for all
3electricity distributed, supplied, furnished, sold,
4transmitted and delivered to the self-assessing purchaser in a
5month.
6    (b) A tax is imposed on the privilege of using in this
7State electricity purchased from a municipal system or
8electric cooperative, as defined in Article XVII of the Public
9Utilities Act, which has not made an election as permitted by
10either Section 17-200 or Section 17-300 of such Act, at the
11lesser of 0.32 cents per kilowatt hour of all electricity
12distributed, supplied, furnished, sold, transmitted, and
13delivered by such municipal system or electric cooperative to
14the purchaser or 5% of each such purchaser's purchase price
15for all electricity distributed, supplied, furnished, sold,
16transmitted, and delivered by such municipal system or
17electric cooperative to the purchaser, whichever is the lower
18rate as applied to each purchaser in each billing period.
19    (c) The tax imposed by this Section 2-4 is not imposed with
20respect to any use of electricity by business enterprises
21certified under Section 9-222.1 or 9-222.1A of the Public
22Utilities Act, as amended, to the extent of such exemption and
23during the time specified by the Department of Commerce and
24Economic Opportunity; or with respect to any transaction in
25interstate commerce, or otherwise, to the extent to which such
26transaction may not, under the Constitution and statutes of

 

 

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1the United States, be made the subject of taxation by this
2State.
3    (d) The tax imposed by this Section 2-4 is not imposed with
4respect to any use of electricity at a REV Illinois Project
5site that has received a certification for tax exemption from
6the Department of Commerce and Economic Opportunity pursuant
7to Section 95 of the Reimagining Energy and Vehicles in
8Illinois Act, to the extent of such exemption, which shall be
9no more than 10 years.
10    (e) The tax imposed by this Section 2-4 is not imposed with
11respect to any use of electricity at a project site that has
12received a certification for tax exemption from the Department
13of Commerce and Economic Opportunity pursuant to the
14Manufacturing Illinois Chips for Real Opportunity (MICRO) Act,
15to the extent of such exemption, which shall be no more than 10
16years.
17    (f) The tax imposed by this Section 2-4 is not imposed with
18respect to any use by the purchaser in the process of
19manufacturing or assembling tangible personal property for
20wholesale or for retail sale or lease.
21(Source: P.A. 102-669, eff. 11-16-21; 102-700, eff. 4-19-22;
22102-1125, eff. 2-3-23.)
 
23    Section 99. Effective date. This Act takes effect upon
24becoming law.