HB3128 97TH GENERAL ASSEMBLY

LRB097 08168 KMW 48292 b

97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB3128

Introduced 2/23/2011, by Rep. Karen A. Yarbrough

SYNOPSIS AS INTRODUCED:

55 ILCS 5/5-1006.3 new
65 ILCS 5/8-11-6b

Amends the Counties Code. Creates the Home Rule County Soft Drink Retailers' Occupation Tax. Provides that home rule counties may impose a tax upon all persons engaged in the business of selling soft drinks, including those who sell fountain soft drinks. Sets forth requirements for the tax and provides that it shall not take effect prior to the first day of the third month following the passage of the ordinance imposing the tax and receipt of a certified copy of the ordinance by the Department of Revenue. Requires that a certificate of registration must be issued by the Illinois Department of Revenue to a retailer in order to permit the registrant to engage in a business that sells soft drinks. Provides that a certified copy of any ordinance imposing or discontinuing any soft drink tax or effecting a change in the rate of that tax shall be filed with the Department of Revenue. Amends the Illinois Municipal Code. Provides that a home rule municipality may impose a tax upon all persons engaged in the business of selling soft drinks, including those who sell fountain soft drinks. Effective January 1, 2012.

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 Counties Code is amended by adding Section 5-1006.3 as follows:

(55 ILCS 5/5-1006.3 new)

Sec. 5-1006.3. Home rule soft drink taxes.

(a) The county board of a home rule county may impose a tax, which shall not take effect prior to the first day of the third month following the passage of the ordinance imposing the tax and receipt of a certified copy of the ordinance by the Department of Revenue, upon all persons engaged in the business of selling soft drinks (other than fountain soft drinks) at retail in the county based on the gross receipts from those sales made in the course of such business. If imposed, the tax shall only be in 1/4% increments and shall not exceed 3%. For purposes of this subsection, the term "soft drink" has the meaning set forth in Section 2-10 of the Retailers' Occupation Tax Act, as may be amended from time to time, except that the term shall not be limited to drinks contained in a closed or sealed bottle, can, carton or container; the term "fountain soft drinks" means soft drinks which are prepared by the retail seller of the soft drinks by mixing syrup or concentrate with water, by hand or through a soft drink dispensing machine, at or near the point and time of sale to the retail purchaser; and the term "soft drink dispensing machine" means a device which mixes soft drink syrup or concentrate with water and dispenses the mixture into an open container as a ready to drink soft drink.

The tax imposed under this subsection and all civil penalties that may be assessed as an incident to that tax shall be collected and enforced by the Illinois Department of Revenue. The Department shall have full power to administer and enforce this subsection, to collect all taxes and penalties so collected in the manner provided in this subsection, and to determine all rights to credit memoranda arising on account of the erroneous payment of tax or penalty under this subsection. In the administration of and compliance with this subsection, the Department and persons who are subject to this subsection shall have the same rights, remedies, privileges, immunities, powers and duties, shall be subject to the same conditions, restrictions, limitations, penalties, exclusions, exemptions, and definitions of terms, and shall employ the same modes of procedure applicable to the Retailers' Occupation Tax as are prescribed in Sections 1, 2 through 2-65 (in respect to all provisions of those Sections other than the State rate of taxes), 2c, 2h, 2i, 3 (except as to the disposition of taxes and penalties collected), 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i, 5j, 6, 6a, 6b, 6c, 7, 8, 9, 10, 11, 12, 13 and, on and after January 1, 1994, all applicable provisions of the Uniform Penalty and Interest Act that are not inconsistent with this subsection, as fully as if provisions contained in those Sections of the Retailers' Occupation Tax Act were set forth in this subsection.

Persons subject to any tax imposed under the authority granted by this subsection may reimburse themselves for their seller's tax liability under this subsection by separately stating that tax as an additional charge, which charge may be stated in combination, in a single amount, with State taxes that sellers are required to collect under the Use Tax Act pursuant to bracket schedules as the Department may prescribe. The retailer filing the return shall, at the time of filing the return, pay to the Department the amount of tax imposed under this subsection, less the discount of 1.75%, which is allowed to reimburse the retailer for the expenses incurred in keeping records, preparing the filing returns, remitting the tax, and supplying data to the Department on request.

Whenever the Department determines that a refund should be made under this subsection to a claimant instead of issuing a credit memoranda, the Department shall notify the State Comptroller, who shall cause a warrant to be drawn for the amount specified and to the person named in the notification from the Department. The refund shall be paid by the State Treasurer out of the Home Rule County Soft Drink Retailers' Occupation Tax Fund.

The Department shall forthwith pay over to the State Treasurer, ex officio, as trustee, all taxes and penalties collected hereunder. On or before the 25th day of each calendar month, the Department shall prepare and certify to the Comptroller the amount to be paid to named counties, the counties to be those from which retailers have paid taxes or penalties hereunder to the Department during the second preceding calendar month. The amount to be paid to each county shall be the amount collected hereunder during the second preceding calendar month by the Department, less any amounts determined by the Department to be necessary for the payment of refunds, and less 4% for the first year the tax is in effect and 2% thereafter of such balance, which sum shall be deposited by the State Treasurer into the Tax Compliance and Administration Fund in the State treasury from which it shall be appropriated to the Department to cover the costs of the Department in administering and enforcing the provisions of this subsection. Within 10 days after receipt by the Comptroller of the certification, the Comptroller shall cause the orders to be drawn for the respective amount in accordance with the directions contained in such certification.

Nothing in this Section shall be construed to authorize a county to impose a tax upon the privilege of engaging in any business which under the Constitution of the United States may not be made the subject of taxation by the State.

A certificate of registration issued by the Illinois Department of Revenue to a retailer under the Retailers' Occupation Tax Act shall permit the registrant to engage in a business that is taxed under the tax imposed under this subsection and no additional registration shall be required under the ordinance imposing a tax or under this subsection.

A certified copy of any ordinance imposing or discontinuing any tax under this subsection or effecting a change in the rate of that tax shall be filed with the Department, whereupon the Department shall proceed to administer and enforce this subsection on behalf of such county as of the first day of the third month following the date of filing. This tax shall be known and cited as the Home Rule County Soft Drink Retailers' Occupation Tax.

(b) The county board of a home rule county may impose a tax, which shall not take effect prior to the first day of the third month following the passage of the ordinance imposing the tax and receipt of a certified copy of the ordinance by the Department of Revenue, on persons engaged in the business of selling fountain soft drinks at retail at a rate not to exceed 9% of the cost price of the fountain soft drinks at retail in such municipality. For purposes of this subsection, the term "soft drink" has the meaning set forth in Section 2-10 of the Retailers' Occupation Tax Act, as may be amended from time to time, except that the term shall not be limited to drinks contained in a closed or sealed bottle, can, carton, or container; the term "fountain soft drinks" means soft drinks which are prepared by the retail seller of the soft drinks by mixing soft drink syrup or concentrate with water, by hand or through a soft drink dispensing machine at or near the point and time of sale to the retail purchaser; the term "soft drink dispensing machine" means a device which mixes soft drink syrup or concentrate with water and dispenses such mixture into an open container as a ready to drink soft drink; the term "sold at retail" shall mean any transfer of the ownership or title to tangible personal property to a purchaser, for the purpose of use or consumption, and not for the purpose of resale, for valuable consideration; the term "cost price of the fountain soft drinks" means the consideration paid by the retail seller of the fountain soft drink, valued in money, whether paid in money or otherwise, including cash, credits and services, and shall be determined without any deduction on account of the supplier's cost of the property sold or on account or any other expenses incurred by the supplier, for the purchase of soft drink syrup or concentrate which is designed to be further mixed with water before it is consumed as a soft drink; and the term "supplier" means any person who makes sales of soft drink syrup or concentrate to a retail seller of fountain soft drinks for purposes of resale as fountain soft drinks. The tax authorized by this subsection shall be collected, enforced, and administered by the county imposing the tax. Persons subject to the tax may reimburse themselves for their tax liability hereunder by separately stating an amount equal to the tax as an additional charge to their retail purchasers or may include such amount as part of the selling price of the soft drink. The county imposing the tax shall provide for its collection from the person subject to the tax by requiring that the supplier to the person subject to the tax collect and remit the tax to the county. If the supplier fails to collect the tax or if the person subject to the tax fails to pay the tax to its supplier, the person subject to the tax shall make the tax payment directly to the county. Payment of the tax by the retailer to the supplier shall relieve the retailer of any further liability for the tax.

(c) If either tax imposed or authorized by this Section 5-1006.3 is repealed by the General Assembly or has its maximum rate reduced by the General Assembly, or is declared unlawful or unconstitutional on its face by any court of competent jurisdiction after all appeals have been exhausted or the time to appeal has expired, then this Section 5-1006.3 is automatically repealed and no longer effective without further action by the General Assembly.

Section 10. The Illinois Municipal Code is amended by changing Section 8-11-6b as follows:

(65 ILCS 5/8-11-6b)

Sec. 8-11-6b. Home rule soft drink taxes.

(a) Except as provided in Sections 8-11-1, 8-11-5 and 8-11-6, or as provided in this Section, no home rule municipality has the authority to impose, pursuant to its home rule authority, a tax on the sale, purchase, or use of soft drinks regardless of whether the measure of the tax is selling price, purchase price, gross receipts, unit of volumetric measure, or any other measure. For purposes of this subsection, the term "soft drink" has the meaning set forth in Section 2-10 of the Retailers' Occupation Tax Act, as may be amended from time to time, except that the term shall not be limited to drinks contained in a closed or sealed bottle, can, carton, or container. This Section is a denial and limitation, under subsection (g) of Section 6 of Article VII of the Illinois Constitution, on the power of home rule units to tax.

(b) The corporate authorities of a home rule municipality with a population in excess of 1,000,000 may impose a tax, which shall not take effect prior to the first day of the third month following the passage of the ordinance imposing the tax and receipt of a certified copy of the ordinance by the Department of Revenue April 1, 1994, upon all persons engaged in the business of selling soft drinks (other than fountain soft drinks) at retail in the municipality based on the gross receipts from those sales made in the course of such business. If imposed, the tax shall only be in 1/4% increments and shall not exceed 3%. For purposes of this subsection, the term "soft drink" has the meaning set forth in Section 2-10 of the Retailers' Occupation Tax Act, as may be amended from time to time, except that the term shall not be limited to drinks contained in a closed or sealed bottle, can, carton or container; the term "fountain soft drinks" means soft drinks which are prepared by the retail seller of the soft drinks by mixing syrup or concentrate with water, by hand or through a soft drink dispensing machine, at or near the point and time of sale to the retail purchaser; and the term "soft drink dispensing machine" means a device which mixes soft drink syrup or concentrate with water and dispenses the mixture into an open container as a ready to drink soft drink.

The tax imposed under this subsection and all civil penalties that may be assessed as an incident to that tax shall be collected and enforced by the Illinois Department of Revenue. The Department shall have full power to administer and enforce this subsection, to collect all taxes and penalties so collected in the manner provided in this subsection, and to determine all rights to credit memoranda arising on account of the erroneous payment of tax or penalty under this subsection. In the administration of and compliance with this subsection, the Department and persons who are subject to this subsection shall have the same rights, remedies, privileges, immunities, powers and duties, shall be subject to the same conditions, restrictions, limitations, penalties, exclusions, exemptions, and definitions of terms, and shall employ the same modes of procedure applicable to the Retailers' Occupation Tax as are prescribed in Sections 1, 2 through 2-65 (in respect to all provisions of those Sections other than the State rate of taxes), 2c, 2h, 2i, 3 (except as to the disposition of taxes and penalties collected), 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i, 5j, 6, 6a, 6b, 6c, 7, 8, 9, 10, 11, 12, 13 and, until January 1, 1994, 13.5 of the Retailers' Occupation Tax Act, and on and after January 1, 1994, all applicable provisions of the Uniform Penalty and Interest Act that are not inconsistent with this subsection, as fully as if provisions contained in those Sections of the Retailers' Occupation Tax Act were set forth in this subsection.

Persons subject to any tax imposed under the authority granted by this subsection may reimburse themselves for their seller's tax liability under this subsection by separately stating that tax as an additional charge, which charge may be stated in combination, in a single amount, with State taxes that sellers are required to collect under the Use Tax Act pursuant to bracket schedules as the Department may prescribe. The retailer filing the return shall, at the time of filing the return, pay to the Department the amount of tax imposed under this subsection, less the discount of 1.75%, which is allowed to reimburse the retailer for the expenses incurred in keeping records, preparing the filing returns, remitting the tax, and supplying data to the Department on request.

Whenever the Department determines that a refund should be made under this subsection to a claimant instead of issuing a credit memoranda, the Department shall notify the State Comptroller, who shall cause a warrant to be drawn for the amount specified and to the person named in the notification from the Department. The refund shall be paid by the State Treasurer out of the Home Rule Municipal Soft Drink Retailers' Occupation Tax Fund.

The Department shall forthwith pay over to the State Treasurer, ex officio, as trustee, all taxes and penalties collected hereunder. On or before the 25th day of each calendar month, the Department shall prepare and certify to the Comptroller the amount to be paid to named municipalities, the municipalities to be those from which retailers have paid taxes or penalties hereunder to the Department during the second preceding calendar month. The amount to be paid to each municipality shall be the amount collected hereunder during the second preceding calendar month by the Department, less any amounts determined by the Department to be necessary for the payment of refunds, and less 4% for the first year the tax is in effect and 2% thereafter of such balance, which sum shall be deposited by the State Treasurer into the Tax Compliance and Administration Fund in the State treasury from which it shall be appropriated to the Department to cover the costs of the Department in administering and enforcing the provisions of this subsection. Within 10 days after receipt by the Comptroller of the certification, the Comptroller shall cause the orders to be drawn for the respective amount in accordance with the directions contained in such certification.

Nothing in this Section shall be construed to authorize a municipality to impose a tax upon the privilege of engaging in any business which under the Constitution of the United States may not be made the subject of taxation by the State.

A certificate of registration issued by the Illinois Department of Revenue to a retailer under the Retailers' Occupation Tax Act shall permit the registrant to engage in a business that is taxed under the tax imposed under this subsection and no additional registration shall be required under the ordinance imposing a tax or under this subsection.

A certified copy of any ordinance imposing or discontinuing any tax under this subsection or effecting a change in the rate of that tax shall be filed with the Department, whereupon the Department shall proceed to administer and enforce this subsection on behalf of such municipality as of the first day of February following the date of filing. This tax shall be known and cited as the Home Rule Municipal Soft Drink Retailers' Occupation Tax.

(c) The corporate authorities of a home rule municipality with a population in excess of 1,000,000 may impose a tax, which shall not take effect prior to the first day of the third month following the passage of the ordinance imposing the tax and receipt of a certified copy of the ordinance by the Department of Revenue April 1, 1994, on persons engaged in the business of selling fountain soft drinks at retail at a rate not to exceed 9% of the cost price of the fountain soft drinks at retail in such municipality. For purposes of this subsection, the term "soft drink" has the meaning set forth in Section 2-10 of the Retailers' Occupation Tax Act, as may be amended from time to time, except that the term shall not be limited to drinks contained in a closed or sealed bottle, can, carton, or container; the term "fountain soft drinks" means soft drinks which are prepared by the retail seller of the soft drinks by mixing soft drink syrup or concentrate with water, by hand or through a soft drink dispensing machine at or near the point and time of sale to the retail purchaser; the term "soft drink dispensing machine" means a device which mixes soft drink syrup or concentrate with water and dispenses such mixture into an open container as a ready to drink soft drink; the term "sold at retail" shall mean any transfer of the ownership or title to tangible personal property to a purchaser, for the purpose of use or consumption, and not for the purpose of resale, for valuable consideration; the term "cost price of the fountain soft drinks" means the consideration paid by the retail seller of the fountain soft drink, valued in money, whether paid in money or otherwise, including cash, credits and services, and shall be determined without any deduction on account of the supplier's cost of the property sold or on account or any other expenses incurred by the supplier, for the purchase of soft drink syrup or concentrate which is designed to be further mixed with water before it is consumed as a soft drink; and the term "supplier" means any person who makes sales of soft drink syrup or concentrate to a retail seller of fountain soft drinks for purposes of resale as fountain soft drinks. The tax authorized by this subsection shall be collected, enforced, and administered by the municipality imposing the tax. Persons subject to the tax may reimburse themselves for their tax liability hereunder by separately stating an amount equal to the tax as an additional charge to their retail purchasers or may include such amount as part of the selling price of the soft drink. The municipality imposing the tax shall provide for its collection from the person subject to the tax by requiring that the supplier to the person subject to the tax collect and remit the tax to the municipality. If the supplier fails to collect the tax or if the person subject to the tax fails to pay the tax to its supplier, the person subject to the tax shall make the tax payment directly to the municipality. Payment of the tax by the retailer to the supplier shall relieve the retailer of any further liability for the tax.

(d) If either tax imposed or authorized by this Section 8-11-6b is repealed by the General Assembly or has its maximum rate reduced by the General Assembly, or is declared unlawful or unconstitutional on its face by any court of competent jurisdiction after all appeals have been exhausted or the time to appeal has expired, then this Section 8-11-6b is automatically repealed and no longer effective without further action by the General Assembly.

(e) Notwithstanding the preemption of taxes on the sale, purchase or use of soft drinks, taxes on the sale, purchase, or use of soft drinks which had been imposed by a municipality prior to the effective date of this amendatory Act of 1993 are specifically authorized under this Section for sales made on or after the effective date of this amendatory Act of 1993 through March 31, 1994.

(Source: P.A. 88-507.)

Section 99. Effective date. This Act takes effect January 1, 2012.