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1 | AN ACT concerning revenue.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 1. Short title. This Act may be cited as the NCAA | ||||||||||||||||||||||||||
5 | Receipts Tax Act. | ||||||||||||||||||||||||||
6 | Section 5. Definitions. For the purposes of this Act: | ||||||||||||||||||||||||||
7 | "Department" means the Department of Revenue. | ||||||||||||||||||||||||||
8 | "Illinois gross receipts" means the consideration received | ||||||||||||||||||||||||||
9 | by the NCAA for (i) television and marketing rights fees, (ii) | ||||||||||||||||||||||||||
10 | championship revenues, and (iii) membership dues collected or | ||||||||||||||||||||||||||
11 | derived from the NCAA's activities in Illinois. The Illinois | ||||||||||||||||||||||||||
12 | gross receipts is determined without any deduction on account | ||||||||||||||||||||||||||
13 | of the cost of the service, product, or commodity supplied, the | ||||||||||||||||||||||||||
14 | cost of materials used, labor or service costs, or any other | ||||||||||||||||||||||||||
15 | expense whatsoever. | ||||||||||||||||||||||||||
16 | "NCAA" means the National Collegiate Athletic Association. | ||||||||||||||||||||||||||
17 | Section 10. Tax imposed. Beginning on July 1, 2007, a tax | ||||||||||||||||||||||||||
18 | is imposed on the NCAA at a rate of 10% of its Illinois gross | ||||||||||||||||||||||||||
19 | receipts. | ||||||||||||||||||||||||||
20 | Section 15. Returns. | ||||||||||||||||||||||||||
21 | (a) The NCAA must file annual gross receipts returns in |
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1 | acordance with this Section.
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2 | (b) On or before January 10 of each year, The NCAA must | ||||||
3 | file, with the Department, an estimated annual gross receipts | ||||||
4 | return containing an estimate of the amount of its Illinois | ||||||
5 | gross receipts for the calendar year commencing January 1 of | ||||||
6 | that year and a statement of the amount of tax due for that | ||||||
7 | calendar year on the basis of that estimate. | ||||||
8 | The NCAA may also file revised returns containing updated | ||||||
9 | estimates and updated amounts of tax due during the calendar | ||||||
10 | year. These revised returns, if filed, form the basis for | ||||||
11 | quarterly payments due during the remainder of the calendar | ||||||
12 | year. | ||||||
13 | (c) On or before March 31 of each year, the NCAA must file | ||||||
14 | an amended return showing the actual amount of Illinois gross | ||||||
15 | receipts shown by the company's books and records as of | ||||||
16 | December 31 of the previous year. | ||||||
17 | (d) All returns submitted under this Section must contain, | ||||||
18 | or be verified by, a written declaration by an appropriate | ||||||
19 | officer of the NCAA that the return is made under the penalties | ||||||
20 | of perjury. The Department may audit each return submitted | ||||||
21 | submitted under this Section and, as set forth under Section | ||||||
22 | 25, may take any measures that are necessary to ascertain the | ||||||
23 | correctness of the returns submitted. The Department has the | ||||||
24 | power to direct the filing of a corrected return by the NCAA if | ||||||
25 | it has filed an incorrect return or failed to submit a return. | ||||||
26 | The signing of a fraudulent return under this Section is |
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1 | perjury, as defined in Section 32-2 of the Criminal Code of | ||||||
2 | 1961. | ||||||
3 | (e) All estimated, revised, and amended returns under this | ||||||
4 | Section must be in the form and manner required by the | ||||||
5 | Department. | ||||||
6 | Section 20. Payment of the tax; penalties. | ||||||
7 | (a) The NCAA must pay at least 25% of the annual amount of | ||||||
8 | tax due under Section 10 to the Department on or before the | ||||||
9 | 10th day of January, April, July, and October of the calendar | ||||||
10 | year subject to tax. | ||||||
11 | (b) If an adjustment in the amount of tax due is necessary | ||||||
12 | as a result of the filing of an amended or corrected return | ||||||
13 | under subsection (b) or subsection (c) of Section 15, then: | ||||||
14 | (1) the NCAA must pay the amount of any deficiency, | ||||||
15 | together with the amended or corrected return; or | ||||||
16 | (2) the amount of any excess must, after the filing of | ||||||
17 | a claim for credit by the NCAA, be returned to the NCAA in | ||||||
18 | the form of a credit memorandum in the amount of the excess | ||||||
19 | or must be refunded to the NCAA in accordance with the | ||||||
20 | provisions of subsection (e). If, however, the deficiency | ||||||
21 | or excess is less than $1, then the NCAA need not pay the | ||||||
22 | deficiency and may not claim a credit. | ||||||
23 | (c) Each installment or required payment of the tax imposed | ||||||
24 | by Section 10 becomes delinquent at midnight of the date that | ||||||
25 | it is due. The failure to make a payment as required by this |
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1 | Section results in the imposition of a late payment penalty, an | ||||||
2 | underestimation penalty, or both, as provided by this | ||||||
3 | subsection. | ||||||
4 | The late payment penalty is the greater of:
(1) $25 for | ||||||
5 | each day that
the installment or required payment is unpaid or
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6 | (2) an amount equal to the difference between what
should have | ||||||
7 | been paid on the due date, based upon the most recently filed | ||||||
8 | estimated, annual, or amended return, and what was actually | ||||||
9 | paid, multiplied by 1% for each day that the installment or | ||||||
10 | required payment goes unpaid. This penalty may be assessed as | ||||||
11 | soon as the installment or required payment becomes delinquent.
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12 | The underestimation penalty is calculated after the filing | ||||||
13 | of the amended return under subsection (b). It must be imposed | ||||||
14 | if the amount actually paid on any of the dates specified in | ||||||
15 | subsection (a) is not equal to at least 25% of the amount | ||||||
16 | actually due for the year. The amount of the underestimation | ||||||
17 | penalty is the greater of:
(1) $25 for each day that
the amount | ||||||
18 | due is unpaid or
(2) an amount equal to the difference between | ||||||
19 | what
should have been paid, based on the amended return, and | ||||||
20 | what was actually paid as of the date specified in subsection | ||||||
21 | (a), multiplied by a percentage equal to 1/365 of the sum of | ||||||
22 | 10% and multiplied by the rate of interest set forth under | ||||||
23 | Section 3-2 of the Uniform Penalty and Interest Act. No | ||||||
24 | underestimation penalty is assessed, however, if the amount | ||||||
25 | actually paid on or before each of the dates specified in | ||||||
26 | subsection (a) was based on an estimate of Illinois gross |
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1 | receipts at least equal to the actual Illinois gross receipts | ||||||
2 | for the previous year. | ||||||
3 | The Department may enforce the collection of any delinquent | ||||||
4 | installment or payment, or portion thereof by legal action or | ||||||
5 | in any other manner by which the collection of debts due the | ||||||
6 | State of Illinois may be enforced under the laws of this State. | ||||||
7 | The Director of Revenue may excuse the payment of an assessed | ||||||
8 | penalty or a portion of an assessed penalty if he determines | ||||||
9 | that enforced collection of the penalty as assessed would be | ||||||
10 | unjust.
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11 | (d) Credit memoranda issued under subsection (b) may be | ||||||
12 | applied for the 2-year period from the date of issuance against | ||||||
13 | the payment of any amount due during that period under the tax | ||||||
14 | imposed by Section 10. Any application of credit memoranda | ||||||
15 | after the period provided for in this subsection (d) is void.
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16 | (e) The Director of Revenue may make refund of taxes if he | ||||||
17 | or she determines that the NCAA will not be liable for payment | ||||||
18 | of those taxes during the next 24 months and if he or she | ||||||
19 | determines that the issuance of a credit memorandum would be | ||||||
20 | unjust. | ||||||
21 | (f) The Department must deposit all moneys received under | ||||||
22 | this Section into the Collegiate Athletic Revenue Fund, which | ||||||
23 | is created under Section 35 of this Act. | ||||||
24 | Section 25. Records; investigations | ||||||
25 | (a) The NCAA must keep any records, render any statements, |
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1 | make any returns and notices, and comply with any rule that the | ||||||
2 | Department may from time to time prescribe. Whenever, in the | ||||||
3 | judgment of the Director, it is necessary, he or she may | ||||||
4 | require any person, by notice served upon that person or by | ||||||
5 | rule, to make any return or notices, render any statements, or | ||||||
6 | keep any records that the Director deems sufficient to show | ||||||
7 | whether or not the NCAA is liable for tax under this Act. | ||||||
8 | (b) For the purpose of administering and enforcing the | ||||||
9 | provisions of this Act, the Department, or any officer or | ||||||
10 | employee of the Department designated in writing by the | ||||||
11 | Director of Revenue, may hold investigations and hearings | ||||||
12 | concerning any matters covered in this Act, may examine any | ||||||
13 | relevant books, papers, records, documents, or memoranda of the | ||||||
14 | NCAA or any person making payments to the NCAA, and may require | ||||||
15 | the attendance of that person or any officer or employee of | ||||||
16 | that person, or of any person having knowledge of the facts, | ||||||
17 | and may take testimony and require proof for its information. | ||||||
18 | Section 30. Payments to member-schools. | ||||||
19 | (a) It is unlawful for the NCAA to use the tax imposed | ||||||
20 | under this Act as a basis for reducing the amount of payments | ||||||
21 | for any reason to member-schools in Illinois. | ||||||
22 | (b) A violation of this Section constitutes a business | ||||||
23 | offense with a minimum fine of $5,000 plus $1,000 per day for a | ||||||
24 | continuing violation. |
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1 | Section 35. Distribution of tax proceeds. The Collegiate | ||||||
2 | Athletic Revenue Fund is created as a special fund in the State | ||||||
3 | treasury. Moneys in the Fund may be used only by the Board of | ||||||
4 | Higher Education, subject to appropriation, for disbursements | ||||||
5 | to State universities in accordance with this Section. On July | ||||||
6 | 1 of each year, or as soon thereafter as may be practical, the | ||||||
7 | Board of Higher Education must distribute the moneys in the | ||||||
8 | Fund to each State university pro rata based on the number of | ||||||
9 | students enrolled in each university. | ||||||
10 | Section 90. The State Finance Act is amended by adding | ||||||
11 | Section 5.675 as follows: | ||||||
12 | (30 ILCS 105/5.675 new) | ||||||
13 | Sec. 5.675. The Collegiate Athletic Revenue Fund.
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14 | Section 99. Effective date. This Act takes effect upon | ||||||
15 | becoming law.
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