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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 5. The Use Tax Act is amended by changing Section 2 |
5 | | as follows:
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6 | | (35 ILCS 105/2) (from Ch. 120, par. 439.2)
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7 | | Sec. 2. "Use" means the exercise by any person of any right |
8 | | or power over
tangible personal property incident to the |
9 | | ownership of that property,
except that it does not include the |
10 | | sale of such property in any form as
tangible personal property |
11 | | in the regular course of business to the extent
that such |
12 | | property is not first subjected to a use for which it was
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13 | | purchased, and does not include the use of such property by its |
14 | | owner for
demonstration purposes: Provided that the property |
15 | | purchased is deemed to
be purchased for the purpose of resale, |
16 | | despite first being used, to the
extent to which it is resold |
17 | | as an ingredient of an intentionally produced
product or |
18 | | by-product of manufacturing. "Use" does not mean the |
19 | | demonstration
use or interim use of tangible personal property |
20 | | by a retailer before he sells
that tangible personal property. |
21 | | For watercraft or aircraft, if the period of
demonstration use |
22 | | or interim use by the retailer exceeds 18 months,
the retailer
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23 | | shall pay on the retailers' original cost price the tax imposed |
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1 | | by this Act,
and no credit for that tax is permitted if the |
2 | | watercraft or aircraft is
subsequently sold by the retailer. |
3 | | "Use" does not mean the physical
incorporation of tangible |
4 | | personal property, to the extent not first subjected
to a use |
5 | | for which it was purchased, as an ingredient or constituent, |
6 | | into
other tangible personal property (a) which is sold in the |
7 | | regular course of
business or (b) which the person |
8 | | incorporating such ingredient or constituent
therein has |
9 | | undertaken at the time of such purchase to cause to be |
10 | | transported
in interstate commerce to destinations outside the |
11 | | State of Illinois: Provided
that the property purchased is |
12 | | deemed to be purchased for the purpose of
resale, despite first |
13 | | being used, to the extent to which it is resold as an
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14 | | ingredient of an intentionally produced product or by-product |
15 | | of manufacturing.
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16 | | "Watercraft" means a Class 2, Class 3, or Class 4 |
17 | | watercraft as defined in
Section 3-2 of the Boat Registration |
18 | | and Safety Act, a personal watercraft, or
any boat equipped |
19 | | with an inboard motor.
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20 | | "Purchase at retail" means the acquisition of the ownership |
21 | | of or title
to tangible personal property through a sale at |
22 | | retail.
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23 | | "Purchaser" means anyone who, through a sale at retail, |
24 | | acquires the
ownership of tangible personal property for a |
25 | | valuable consideration.
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26 | | "Sale at retail" means any transfer of the ownership of or |
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1 | | title to
tangible personal property to a purchaser, for the |
2 | | purpose of use, and not
for the purpose of resale in any form |
3 | | as tangible personal property to the
extent not first subjected |
4 | | to a use for which it was purchased, for a
valuable |
5 | | consideration: Provided that the property purchased is deemed |
6 | | to
be purchased for the purpose of resale, despite first being |
7 | | used, to the
extent to which it is resold as an ingredient of |
8 | | an intentionally produced
product or by-product of |
9 | | manufacturing. For this purpose, slag produced as
an incident |
10 | | to manufacturing pig iron or steel and sold is considered to be
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11 | | an intentionally produced by-product of manufacturing. "Sale |
12 | | at retail"
includes any such transfer made for resale unless |
13 | | made in compliance with
Section 2c of the Retailers' Occupation |
14 | | Tax Act, as incorporated by
reference into Section 12 of this |
15 | | Act. Transactions whereby the possession
of the property is |
16 | | transferred but the seller retains the title as security
for |
17 | | payment of the selling price are sales.
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18 | | "Sale at retail" shall also be construed to include any |
19 | | Illinois
florist's sales transaction in which the purchase |
20 | | order is received in
Illinois by a florist and the sale is for |
21 | | use or consumption, but the
Illinois florist has a florist in |
22 | | another state deliver the property to the
purchaser or the |
23 | | purchaser's donee in such other state.
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24 | | Nonreusable tangible personal property that is used by |
25 | | persons engaged in
the business of operating a restaurant, |
26 | | cafeteria, or drive-in is a sale for
resale when it is |
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1 | | transferred to customers in the ordinary course of business
as |
2 | | part of the sale of food or beverages and is used to deliver, |
3 | | package, or
consume food or beverages, regardless of where |
4 | | consumption of the food or
beverages occurs. Examples of those |
5 | | items include, but are not limited to
nonreusable, paper and |
6 | | plastic cups, plates, baskets, boxes, sleeves, buckets
or other |
7 | | containers, utensils, straws, placemats, napkins, doggie bags, |
8 | | and
wrapping or packaging
materials that are transferred to |
9 | | customers as part of the sale of food or
beverages in the |
10 | | ordinary course of business.
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11 | | The purchase, employment and transfer of such tangible |
12 | | personal property
as newsprint and ink for the primary purpose |
13 | | of conveying news (with or
without other information) is not a |
14 | | purchase, use or sale of tangible
personal property.
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15 | | "Selling price" means the consideration for a sale valued |
16 | | in money
whether received in money or otherwise, including |
17 | | cash, credits, property
other than as hereinafter provided, and |
18 | | services, but not including the
value of or credit given for |
19 | | traded-in tangible personal property where the
item that is |
20 | | traded-in is of like kind and character as that which is being
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21 | | sold, and shall be determined without any deduction on account |
22 | | of the cost
of the property sold, the cost of materials used, |
23 | | labor or service cost or
any other expense whatsoever, but does |
24 | | not include interest or finance
charges which appear as |
25 | | separate items on the bill of sale or sales
contract nor |
26 | | charges that are added to prices by sellers on account of the
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1 | | seller's tax liability under the "Retailers' Occupation Tax |
2 | | Act", or on
account of the seller's duty to collect, from the |
3 | | purchaser, the tax that
is imposed by this Act, or, except as |
4 | | otherwise provided with respect to any cigarette tax imposed by |
5 | | a home rule unit, on account of the seller's tax liability |
6 | | under any local occupation tax administered by the Department, |
7 | | or, except as otherwise provided with respect to any cigarette |
8 | | tax imposed by a home rule unit on account of the seller's duty |
9 | | to collect, from the purchasers, the tax that is imposed under |
10 | | any local use tax administered by the Department. Effective |
11 | | December 1, 1985, "selling price"
shall include charges that |
12 | | are added to prices by sellers on account of the
seller's tax |
13 | | liability under the Cigarette Tax Act, on account of the |
14 | | seller's
duty to collect, from the purchaser, the tax imposed |
15 | | under the Cigarette Use
Tax Act, and on account of the seller's |
16 | | duty to collect, from the purchaser,
any cigarette tax imposed |
17 | | by a home rule unit. On and after January 1, 2005, with respect |
18 | | to sales of cellular telephones or other wireless cellular |
19 | | devices, the term "selling price" does not include |
20 | | consideration paid by a third-party cellular service provider.
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21 | | "Wireless cellular device" means any wireless |
22 | | communication device that provides for voice or data |
23 | | communication between 2 or more parties, including, but not |
24 | | limited to, a text messaging device or other device that sends |
25 | | or receives messages or electronic data. |
26 | | The phrase "like kind and character" shall be liberally |
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1 | | construed
(including but not limited to any form of motor |
2 | | vehicle for any form of
motor vehicle, or any kind of farm or |
3 | | agricultural implement for any other
kind of farm or |
4 | | agricultural implement), while not including a kind of item
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5 | | which, if sold at retail by that retailer, would be exempt from |
6 | | retailers'
occupation tax and use tax as an isolated or |
7 | | occasional sale.
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8 | | "Department" means the Department of Revenue.
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9 | | "Person" means any natural individual, firm, partnership, |
10 | | association,
joint stock company, joint adventure, public or |
11 | | private corporation, limited
liability company, or a
receiver, |
12 | | executor, trustee, guardian or other representative appointed
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13 | | by order of any court.
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14 | | "Retailer" means and includes every person engaged in the |
15 | | business of
making sales at retail as defined in this Section.
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16 | | A person who holds himself or herself out as being engaged |
17 | | (or who habitually
engages) in selling tangible personal |
18 | | property at retail is a retailer
hereunder with respect to such |
19 | | sales (and not primarily in a service
occupation) |
20 | | notwithstanding the fact that such person designs and produces
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21 | | such tangible personal property on special order for the |
22 | | purchaser and in
such a way as to render the property of value |
23 | | only to such purchaser, if
such tangible personal property so |
24 | | produced on special order serves
substantially the same |
25 | | function as stock or standard items of tangible
personal |
26 | | property that are sold at retail.
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1 | | A person whose activities are organized and conducted |
2 | | primarily as a
not-for-profit service enterprise, and who |
3 | | engages in selling tangible
personal property at retail |
4 | | (whether to the public or merely to members and
their guests) |
5 | | is a retailer with respect to such transactions, excepting
only |
6 | | a person organized and operated exclusively for charitable, |
7 | | religious
or educational purposes either (1), to the extent of |
8 | | sales by such person
to its members, students, patients or |
9 | | inmates of tangible personal property
to be used primarily for |
10 | | the purposes of such person, or (2), to the extent
of sales by |
11 | | such person of tangible personal property which is not sold or
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12 | | offered for sale by persons organized for profit. The selling |
13 | | of school
books and school supplies by schools at retail to |
14 | | students is not
"primarily for the purposes of" the school |
15 | | which does such selling. This
paragraph does not apply to nor |
16 | | subject to taxation occasional dinners,
social or similar |
17 | | activities of a person organized and operated exclusively
for |
18 | | charitable, religious or educational purposes, whether or not |
19 | | such
activities are open to the public.
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20 | | A person who is the recipient of a grant or contract under |
21 | | Title VII of
the Older Americans Act of 1965 (P.L. 92-258) and |
22 | | serves meals to
participants in the federal Nutrition Program |
23 | | for the Elderly in return for
contributions established in |
24 | | amount by the individual participant pursuant
to a schedule of |
25 | | suggested fees as provided for in the federal Act is not a
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26 | | retailer under this Act with respect to such transactions.
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1 | | Persons who engage in the business of transferring tangible |
2 | | personal
property upon the redemption of trading stamps are |
3 | | retailers hereunder when
engaged in such business.
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4 | | The isolated or occasional sale of tangible personal |
5 | | property at retail
by a person who does not hold himself out as |
6 | | being engaged (or who does not
habitually engage) in selling |
7 | | such tangible personal property at retail or
a sale through a |
8 | | bulk vending machine does not make such person a retailer
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9 | | hereunder. However, any person who is engaged in a business |
10 | | which is not
subject to the tax imposed by the "Retailers' |
11 | | Occupation Tax Act" because
of involving the sale of or a |
12 | | contract to sell real estate or a
construction contract to |
13 | | improve real estate, but who, in the course of
conducting such |
14 | | business, transfers tangible personal property to users or
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15 | | consumers in the finished form in which it was purchased, and |
16 | | which does
not become real estate, under any provision of a |
17 | | construction contract or
real estate sale or real estate sales |
18 | | agreement entered into with some
other person arising out of or |
19 | | because of such nontaxable business, is a
retailer to the |
20 | | extent of the value of the tangible personal property so
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21 | | transferred. If, in such transaction, a separate charge is made |
22 | | for the
tangible personal property so transferred, the value of |
23 | | such property, for
the purposes of this Act, is the amount so |
24 | | separately charged, but not less
than the cost of such property |
25 | | to the transferor; if no separate charge is
made, the value of |
26 | | such property, for the purposes of this Act, is the cost
to the |
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1 | | transferor of such tangible personal property.
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2 | | "Retailer maintaining a place of business in this State", |
3 | | or any like
term, means and includes any of the following |
4 | | retailers:
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5 | | 1. A retailer having or maintaining within this State, |
6 | | directly or by
a subsidiary, an office, distribution house, |
7 | | sales house, warehouse or other
place of business, or any |
8 | | agent or other representative operating within this
State |
9 | | under the authority of the retailer or its subsidiary, |
10 | | irrespective of
whether such place of business or agent or |
11 | | other representative is located here
permanently or |
12 | | temporarily, or whether such retailer or subsidiary is |
13 | | licensed
to do business in this State. However, the |
14 | | ownership of property that is
located at the premises of a |
15 | | printer with which the retailer has contracted for
printing |
16 | | and that consists of the final printed product, property |
17 | | that becomes
a part of the final printed product, or copy |
18 | | from which the printed product is
produced shall not result |
19 | | in the retailer being deemed to have or maintain an
office, |
20 | | distribution house, sales house, warehouse, or other place |
21 | | of business
within this State. |
22 | | 1.1. Beginning July 1, 2011, a retailer having a |
23 | | contract with a person located in this State under which |
24 | | the person, for a commission or other consideration based |
25 | | upon the sale of tangible personal property by the |
26 | | retailer, directly or indirectly refers potential |
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1 | | customers to the retailer by a link on the person's |
2 | | Internet website. The provisions of this paragraph 1.1 |
3 | | shall apply only if the cumulative gross receipts from |
4 | | sales of tangible personal property by the retailer to |
5 | | customers who are referred to the retailer by all persons |
6 | | in this State under such contracts exceed $10,000 during |
7 | | the preceding 4 quarterly periods ending on the last day of |
8 | | March, June, September, and December. |
9 | | 1.2. Beginning July 1, 2011, a retailer having a |
10 | | contract with a person located in this State under which: |
11 | | A. the retailer sells the same or substantially |
12 | | similar line of products as the person located in this |
13 | | State and does so using an identical or substantially |
14 | | similar name, trade name, or trademark as the person |
15 | | located in this State; and |
16 | | B. the retailer provides a commission or other |
17 | | consideration to the person located in this State based |
18 | | upon the sale of tangible personal property by the |
19 | | retailer. |
20 | | The provisions of this paragraph 1.2 shall apply only if |
21 | | the cumulative gross receipts from sales of tangible |
22 | | personal property by the retailer to customers in this |
23 | | State under all such contracts exceed $10,000 during the |
24 | | preceding 4 quarterly periods ending on the last day of |
25 | | March, June, September, and December.
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26 | | 2. A retailer soliciting orders for tangible personal |
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1 | | property by
means of a telecommunication or television |
2 | | shopping system (which utilizes toll
free numbers) which is |
3 | | intended by the retailer to be broadcast by cable
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4 | | television or other means of broadcasting, to consumers |
5 | | located in this State.
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6 | | 3. A retailer, pursuant to a contract with a |
7 | | broadcaster or publisher
located in this State, soliciting |
8 | | orders for tangible personal property by
means of |
9 | | advertising which is disseminated primarily to consumers |
10 | | located in
this State and only secondarily to bordering |
11 | | jurisdictions.
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12 | | 4. A retailer soliciting orders for tangible personal |
13 | | property by mail
if the solicitations are substantial and |
14 | | recurring and if the retailer benefits
from any banking, |
15 | | financing, debt collection, telecommunication, or |
16 | | marketing
activities occurring in this State or benefits |
17 | | from the location in this State
of authorized installation, |
18 | | servicing, or repair facilities.
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19 | | 5. A retailer that is owned or controlled by the same |
20 | | interests that own
or control any retailer engaging in |
21 | | business in the same or similar line of
business in this |
22 | | State.
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23 | | 6. A retailer having a franchisee or licensee operating |
24 | | under its trade
name if the franchisee or licensee is |
25 | | required to collect the tax under this
Section.
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26 | | 7. A retailer, pursuant to a contract with a cable |
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1 | | television operator
located in this State, soliciting |
2 | | orders for tangible personal property by
means of |
3 | | advertising which is transmitted or distributed over a |
4 | | cable
television system in this State.
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5 | | 8. A retailer engaging in activities in Illinois, which |
6 | | activities in
the state in which the retail business |
7 | | engaging in such activities is located
would constitute |
8 | | maintaining a place of business in that state.
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9 | | "Bulk vending machine" means a vending machine,
containing |
10 | | unsorted confections, nuts, toys, or other items designed
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11 | | primarily to be used or played with by children
which, when a |
12 | | coin or coins of a denomination not larger than $0.50 are |
13 | | inserted, are dispensed in equal portions, at random and
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14 | | without selection by the customer.
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15 | | (Source: P.A. 95-723, eff. 6-23-08; 96-1544, eff. 3-10-11.)
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16 | | Section 10. The Service Use Tax Act is amended by changing |
17 | | Section 2 as follows:
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18 | | (35 ILCS 110/2) (from Ch. 120, par. 439.32)
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19 | | Sec. 2. "Use" means the exercise by any person of any right |
20 | | or power
over tangible personal property incident to the |
21 | | ownership of that
property, but does not include the sale or |
22 | | use for demonstration by him
of that property in any form as |
23 | | tangible personal property in the
regular course of business.
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24 | | "Use" does not mean the interim
use of
tangible personal |
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1 | | property nor the physical incorporation of tangible
personal |
2 | | property, as an ingredient or constituent, into other tangible
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3 | | personal property, (a) which is sold in the regular course of |
4 | | business
or (b) which the person incorporating such ingredient |
5 | | or constituent
therein has undertaken at the time of such |
6 | | purchase to cause to be
transported in interstate commerce to |
7 | | destinations outside the State of
Illinois.
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8 | | "Purchased from a serviceman" means the acquisition of the |
9 | | ownership
of, or title to, tangible personal property through a |
10 | | sale of service.
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11 | | "Purchaser" means any person who, through a sale of |
12 | | service, acquires
the ownership of, or title to, any tangible |
13 | | personal property.
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14 | | "Cost price" means the consideration paid by the serviceman |
15 | | for a
purchase valued in money, whether paid in money or |
16 | | otherwise, including
cash, credits and services, and shall be |
17 | | determined without any
deduction on account of the supplier's |
18 | | cost of the property sold or on
account of any other expense |
19 | | incurred by the supplier. When a serviceman
contracts out part |
20 | | or all of the services required in his sale of service,
it |
21 | | shall be presumed that the cost price to the serviceman of the |
22 | | property
transferred to him or her by his or her subcontractor |
23 | | is equal to 50% of
the subcontractor's charges to the |
24 | | serviceman in the absence of proof of
the consideration paid by |
25 | | the subcontractor for the purchase of such property.
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26 | | "Selling price" means the consideration for a sale valued |
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1 | | in money
whether received in money or otherwise, including |
2 | | cash, credits and
service, and shall be determined without any |
3 | | deduction on account of the
serviceman's cost of the property |
4 | | sold, the cost of materials used,
labor or service cost or any |
5 | | other expense whatsoever, but does not
include interest or |
6 | | finance charges which appear as separate items on
the bill of |
7 | | sale or sales contract nor charges that are added to prices
by |
8 | | sellers on account of the seller's duty to collect, from the
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9 | | purchaser, the tax that is imposed by this Act. On and after |
10 | | January 1, 2005, with respect to sales of cellular telephones |
11 | | or other wireless cellular devices, the term "selling price" |
12 | | does not include consideration paid by a third-party cellular |
13 | | service provider.
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14 | | "Wireless cellular device" means any wireless |
15 | | communication device that provides for voice or data |
16 | | communication between 2 or more parties, including, but not |
17 | | limited to, a text messaging device or other device that sends |
18 | | or receives messages or electronic data. |
19 | | "Department" means the Department of Revenue.
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20 | | "Person" means any natural individual, firm, partnership,
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21 | | association, joint stock company, joint venture, public or |
22 | | private
corporation, limited liability company, and any |
23 | | receiver, executor, trustee,
guardian or other representative |
24 | | appointed by order of any court.
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25 | | "Sale of service" means any transaction except:
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26 | | (1) a retail sale of tangible personal property taxable |
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1 | | under the
Retailers' Occupation Tax Act or under the Use |
2 | | Tax Act.
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3 | | (2) a sale of tangible personal property for the |
4 | | purpose of resale
made in compliance with Section 2c of the |
5 | | Retailers' Occupation Tax Act.
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6 | | (3) except as hereinafter provided, a sale or transfer |
7 | | of tangible
personal property as an incident to the |
8 | | rendering of service for or by
any governmental body, or |
9 | | for or by any corporation, society,
association, |
10 | | foundation or institution organized and operated
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11 | | exclusively for charitable, religious or educational |
12 | | purposes or any
not-for-profit corporation, society, |
13 | | association, foundation,
institution or organization which |
14 | | has no compensated officers or
employees and which is |
15 | | organized and operated primarily for the
recreation of |
16 | | persons 55 years of age or older. A limited liability |
17 | | company
may qualify for the exemption under this paragraph |
18 | | only if the limited
liability company is organized and |
19 | | operated exclusively for educational
purposes.
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20 | | (4) a sale or transfer of tangible personal
property as |
21 | | an incident to the
rendering of service for interstate |
22 | | carriers for hire for use as rolling stock
moving in |
23 | | interstate commerce or by lessors under a lease of one year |
24 | | or
longer, executed or in effect at the time of purchase of |
25 | | personal property, to
interstate carriers for hire for use |
26 | | as rolling stock moving in interstate
commerce so long as |
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1 | | so used by such interstate carriers for hire, and equipment
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2 | | operated by a telecommunications provider, licensed as a |
3 | | common carrier by the
Federal Communications Commission, |
4 | | which is permanently installed in or affixed
to aircraft |
5 | | moving in interstate commerce.
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6 | | (4a) a sale or transfer of tangible personal
property |
7 | | as an incident
to the rendering of service for owners, |
8 | | lessors, or shippers of tangible
personal property which is |
9 | | utilized by interstate carriers for hire for
use as rolling |
10 | | stock moving in interstate commerce so long as so used by
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11 | | interstate carriers for hire, and equipment operated by a
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12 | | telecommunications provider, licensed as a common carrier |
13 | | by the Federal
Communications Commission, which is |
14 | | permanently installed in or affixed to
aircraft moving in |
15 | | interstate commerce.
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16 | | (4a-5) on and after July 1, 2003 and through June 30, |
17 | | 2004, a sale or transfer of a motor vehicle
of
the
second |
18 | | division with a gross vehicle weight in excess of 8,000 |
19 | | pounds as an
incident to the rendering of service if that |
20 | | motor
vehicle is subject
to the commercial distribution fee |
21 | | imposed under Section 3-815.1 of the
Illinois Vehicle
Code. |
22 | | Beginning on July 1, 2004 and through June 30, 2005, the |
23 | | use in this State of motor vehicles of the second division: |
24 | | (i) with a gross vehicle weight rating in excess of 8,000 |
25 | | pounds; (ii) that are subject to the commercial |
26 | | distribution fee imposed under Section 3-815.1 of the |
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1 | | Illinois Vehicle Code; and (iii) that are primarily used |
2 | | for commercial purposes. Through June 30, 2005, this
|
3 | | exemption applies to repair and replacement parts added |
4 | | after the
initial
purchase of such a motor vehicle if that |
5 | | motor vehicle is used in a manner that
would
qualify for |
6 | | the rolling stock exemption otherwise provided for in this |
7 | | Act. For purposes of this paragraph, "used for commercial |
8 | | purposes" means the transportation of persons or property |
9 | | in furtherance of any commercial or industrial enterprise |
10 | | whether for-hire or not.
|
11 | | (5) a sale or transfer of machinery and equipment used |
12 | | primarily in the
process of the manufacturing or |
13 | | assembling, either in an existing, an expanded
or a new |
14 | | manufacturing facility, of tangible personal property for |
15 | | wholesale or
retail sale or lease, whether such sale or |
16 | | lease is made directly by the
manufacturer or by some other |
17 | | person, whether the materials used in the process
are owned |
18 | | by the manufacturer or some other person, or whether such |
19 | | sale or
lease is made apart from or as an incident to the |
20 | | seller's engaging in a
service occupation and the |
21 | | applicable tax is a Service Use Tax or Service
Occupation |
22 | | Tax, rather than Use Tax or Retailers' Occupation Tax.
|
23 | | (5a) the repairing, reconditioning or remodeling, for |
24 | | a
common carrier by rail, of tangible personal property |
25 | | which belongs to such
carrier for hire, and as to which |
26 | | such carrier receives the physical possession
of the |
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1 | | repaired, reconditioned or remodeled item of tangible |
2 | | personal property
in Illinois, and which such carrier |
3 | | transports, or shares with another common
carrier in the |
4 | | transportation of such property, out of Illinois on a |
5 | | standard
uniform bill of lading showing the person who |
6 | | repaired, reconditioned or
remodeled the property to a |
7 | | destination outside Illinois, for use outside
Illinois.
|
8 | | (5b) a sale or transfer of tangible personal property |
9 | | which is produced by
the seller thereof on special order in |
10 | | such a way as to have made the
applicable tax the Service |
11 | | Occupation Tax or the Service Use Tax, rather than
the |
12 | | Retailers' Occupation Tax or the Use Tax, for an interstate |
13 | | carrier by rail
which receives the physical possession of |
14 | | such property in Illinois, and which
transports such |
15 | | property, or shares with another common carrier in the
|
16 | | transportation of such property, out of Illinois on a |
17 | | standard uniform bill of
lading showing the seller of the |
18 | | property as the shipper or consignor of such
property to a |
19 | | destination outside Illinois, for use outside Illinois.
|
20 | | (6) until July 1, 2003, a sale or transfer of |
21 | | distillation machinery
and equipment, sold
as a unit or kit |
22 | | and assembled or installed by the retailer, which
machinery |
23 | | and equipment is certified by the user to be used only for |
24 | | the
production of ethyl alcohol that will be used for |
25 | | consumption as motor fuel
or as a component of motor fuel |
26 | | for the personal use of such user and not
subject to sale |
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1 | | or resale.
|
2 | | (7) at the election of any serviceman not required to |
3 | | be
otherwise registered as a retailer under Section 2a of |
4 | | the Retailers'
Occupation Tax Act, made for each fiscal |
5 | | year sales
of service in which the aggregate annual cost |
6 | | price of tangible
personal property transferred as an |
7 | | incident to the sales of service is
less than 35%, or 75% |
8 | | in the case of servicemen transferring prescription
drugs |
9 | | or servicemen engaged in graphic arts production, of the |
10 | | aggregate
annual total gross receipts from all sales of |
11 | | service. The purchase of
such tangible personal property by |
12 | | the serviceman shall be subject to tax
under the Retailers' |
13 | | Occupation Tax Act and the Use Tax Act.
However, if a
|
14 | | primary serviceman who has made the election described in |
15 | | this paragraph
subcontracts service work to a secondary |
16 | | serviceman who has also made the
election described in this |
17 | | paragraph, the primary serviceman does not
incur a Use Tax |
18 | | liability if the secondary serviceman (i) has paid or will |
19 | | pay
Use
Tax on his or her cost price of any tangible |
20 | | personal property transferred
to the primary serviceman |
21 | | and (ii) certifies that fact in writing to the
primary
|
22 | | serviceman.
|
23 | | Tangible personal property transferred incident to the |
24 | | completion of a
maintenance agreement is exempt from the tax |
25 | | imposed pursuant to this Act.
|
26 | | Exemption (5) also includes machinery and equipment used in |
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1 | | the general
maintenance or repair of such exempt machinery and |
2 | | equipment or for in-house
manufacture of exempt machinery and |
3 | | equipment. For the purposes of exemption
(5), each of these |
4 | | terms shall have the following meanings: (1) "manufacturing
|
5 | | process" shall mean the production of any article of tangible |
6 | | personal
property, whether such article is a finished product |
7 | | or an article for use in
the process of manufacturing or |
8 | | assembling a different article of tangible
personal property, |
9 | | by procedures commonly regarded as manufacturing,
processing, |
10 | | fabricating, or refining which changes some existing
material |
11 | | or materials into a material with a different form, use or
|
12 | | name. In relation to a recognized integrated business composed |
13 | | of a
series of operations which collectively constitute |
14 | | manufacturing, or
individually constitute manufacturing |
15 | | operations, the manufacturing
process shall be deemed to |
16 | | commence with the first operation or stage of
production in the |
17 | | series, and shall not be deemed to end until the
completion of |
18 | | the final product in the last operation or stage of
production |
19 | | in the series; and further, for purposes of exemption (5),
|
20 | | photoprocessing is deemed to be a manufacturing process of |
21 | | tangible
personal property for wholesale or retail sale; (2) |
22 | | "assembling process" shall
mean the production of any article |
23 | | of tangible personal property, whether such
article is a |
24 | | finished product or an article for use in the process of
|
25 | | manufacturing or assembling a different article of tangible |
26 | | personal
property, by the combination of existing materials in |
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1 | | a manner commonly
regarded as assembling which results in a |
2 | | material of a different form,
use or name; (3) "machinery" |
3 | | shall mean major mechanical machines or
major components of |
4 | | such machines contributing to a manufacturing or
assembling |
5 | | process; and (4) "equipment" shall include any independent
|
6 | | device or tool separate from any machinery but essential to an
|
7 | | integrated manufacturing or assembly process; including |
8 | | computers
used primarily in a manufacturer's computer
assisted |
9 | | design, computer assisted manufacturing (CAD/CAM) system;
or |
10 | | any subunit or assembly comprising a component of any machinery |
11 | | or
auxiliary, adjunct or attachment parts of machinery, such as |
12 | | tools, dies,
jigs, fixtures, patterns and molds; or any parts |
13 | | which require periodic
replacement in the course of normal |
14 | | operation; but shall not include hand
tools.
Equipment includes |
15 | | chemicals or chemicals acting as catalysts but only if the
|
16 | | chemicals or chemicals acting as catalysts effect a direct and |
17 | | immediate change
upon a
product being manufactured or assembled |
18 | | for wholesale or retail sale or
lease.
The purchaser of such |
19 | | machinery and equipment who has an active
resale registration |
20 | | number shall furnish such number to the seller at the
time of |
21 | | purchase. The user of such machinery and equipment and tools
|
22 | | without an active resale registration number shall prepare a |
23 | | certificate of
exemption for each transaction stating facts |
24 | | establishing the exemption for
that transaction, which |
25 | | certificate shall be available to the Department
for inspection |
26 | | or audit. The Department shall prescribe the form of the
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1 | | certificate.
|
2 | | Any informal rulings, opinions or letters issued by the |
3 | | Department in
response to an inquiry or request for any opinion |
4 | | from any person
regarding the coverage and applicability of |
5 | | exemption (5) to specific
devices shall be published, |
6 | | maintained as a public record, and made
available for public |
7 | | inspection and copying. If the informal ruling,
opinion or |
8 | | letter contains trade secrets or other confidential
|
9 | | information, where possible the Department shall delete such |
10 | | information
prior to publication. Whenever such informal |
11 | | rulings, opinions, or
letters contain any policy of general |
12 | | applicability, the Department
shall formulate and adopt such |
13 | | policy as a rule in accordance with the
provisions of the |
14 | | Illinois Administrative Procedure Act.
|
15 | | On and after July 1, 1987, no entity otherwise eligible |
16 | | under exemption
(3) of this Section shall make tax free |
17 | | purchases unless it has an active
exemption identification |
18 | | number issued by the Department.
|
19 | | The purchase, employment and transfer of such tangible |
20 | | personal
property as newsprint and ink for the primary purpose |
21 | | of conveying news
(with or without other information) is not a |
22 | | purchase, use or sale of
service or of tangible personal |
23 | | property within the meaning of this Act.
|
24 | | "Serviceman" means any person who is engaged in the |
25 | | occupation of
making sales of service.
|
26 | | "Sale at retail" means "sale at retail" as defined in the |
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1 | | Retailers'
Occupation Tax Act.
|
2 | | "Supplier" means any person who makes sales of tangible |
3 | | personal
property to servicemen for the purpose of resale as an |
4 | | incident to a
sale of service.
|
5 | | "Serviceman maintaining a place of business in this State", |
6 | | or any
like term, means and includes any serviceman:
|
7 | | 1. having or maintaining within this State, directly or |
8 | | by a
subsidiary, an office, distribution house, sales |
9 | | house, warehouse or
other place of business, or any agent |
10 | | or other representative operating
within this State under |
11 | | the authority of the serviceman or its
subsidiary, |
12 | | irrespective of whether such place of business or agent or
|
13 | | other representative is located here permanently or |
14 | | temporarily, or
whether such serviceman or subsidiary is |
15 | | licensed to do business in this
State; |
16 | | 1.1. beginning July 1, 2011, having a contract with a |
17 | | person located in this State under which the person, for a |
18 | | commission or other consideration based on the sale of |
19 | | service by the serviceman, directly or indirectly refers |
20 | | potential customers to the serviceman by a link on the |
21 | | person's Internet website. The provisions of this |
22 | | paragraph 1.1 shall apply only if the cumulative gross |
23 | | receipts from sales of service by the serviceman to |
24 | | customers who are referred to the serviceman by all persons |
25 | | in this State under such contracts exceed $10,000 during |
26 | | the preceding 4 quarterly periods ending on the last day of |
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1 | | March, June, September, and December; |
2 | | 1.2. beginning July 1, 2011, having a contract with a |
3 | | person located in this State under which: |
4 | | A. the serviceman sells the same or substantially |
5 | | similar line of services as the person located in this |
6 | | State and does so using an identical or substantially |
7 | | similar name, trade name, or trademark as the person |
8 | | located in this State; and |
9 | | B. the serviceman provides a commission or other |
10 | | consideration to the person located in this State based |
11 | | upon the sale of services by the serviceman. |
12 | | The provisions of this paragraph 1.2 shall apply only if |
13 | | the cumulative gross receipts from sales of service by the |
14 | | serviceman to customers in this State under all such |
15 | | contracts exceed $10,000 during the preceding 4 quarterly |
16 | | periods ending on the last day of March, June, September, |
17 | | and December;
|
18 | | 2. soliciting orders for tangible personal property by |
19 | | means of a
telecommunication or television shopping system |
20 | | (which utilizes toll free
numbers) which is intended by the |
21 | | retailer to be broadcast by cable
television or other means |
22 | | of broadcasting, to consumers located in this State;
|
23 | | 3. pursuant to a contract with a broadcaster or |
24 | | publisher located in this
State, soliciting orders for |
25 | | tangible personal property by means of advertising
which is |
26 | | disseminated primarily to consumers located in this State |
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1 | | and only
secondarily to bordering jurisdictions;
|
2 | | 4. soliciting orders for tangible personal property by |
3 | | mail if the
solicitations are substantial and recurring and |
4 | | if the retailer benefits
from any banking, financing, debt |
5 | | collection, telecommunication, or
marketing activities |
6 | | occurring in this State or benefits from the location
in |
7 | | this State of authorized installation, servicing, or |
8 | | repair facilities;
|
9 | | 5. being owned or controlled by the same interests |
10 | | which own or
control any retailer engaging in business in |
11 | | the same or similar line of
business in this State;
|
12 | | 6. having a franchisee or licensee operating under its |
13 | | trade name if
the franchisee or licensee is required to |
14 | | collect the tax under this Section;
|
15 | | 7. pursuant to a contract with a cable television |
16 | | operator located in
this State, soliciting orders for |
17 | | tangible personal property by means of
advertising which is |
18 | | transmitted or distributed over a cable television
system |
19 | | in this State; or
|
20 | | 8. engaging in activities in Illinois, which |
21 | | activities in the
state in which the supply business |
22 | | engaging in such activities is located
would constitute |
23 | | maintaining a place of business in that state.
|
24 | | (Source: P.A. 96-1544, eff. 3-10-11.)
|
25 | | Section 15. The Retailers' Occupation Tax Act is amended by |
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1 | | changing Section 1 as follows:
|
2 | | (35 ILCS 120/1) (from Ch. 120, par. 440)
|
3 | | Sec. 1. Definitions. "Sale at retail" means any transfer of |
4 | | the
ownership of or title to
tangible personal property to a |
5 | | purchaser, for the purpose of use or
consumption, and not for |
6 | | the purpose of resale in any form as tangible
personal property |
7 | | to the extent not first subjected to a use for which it
was |
8 | | purchased, for a valuable consideration: Provided that the |
9 | | property
purchased is deemed to be purchased for the purpose of |
10 | | resale, despite
first being used, to the extent to which it is |
11 | | resold as an ingredient of
an intentionally produced product or |
12 | | byproduct of manufacturing. For this
purpose, slag produced as |
13 | | an incident to manufacturing pig iron or steel
and sold is |
14 | | considered to be an intentionally produced byproduct of
|
15 | | manufacturing. Transactions whereby the possession of the |
16 | | property is
transferred but the seller retains the title as |
17 | | security for payment of the
selling price shall be deemed to be |
18 | | sales.
|
19 | | "Sale at retail" shall be construed to include any transfer |
20 | | of the
ownership of or title to tangible personal property to a |
21 | | purchaser, for use
or consumption by any other person to whom |
22 | | such purchaser may transfer the
tangible personal property |
23 | | without a valuable consideration, and to include
any transfer, |
24 | | whether made for or without a valuable consideration, for
|
25 | | resale in any form as tangible personal property unless made in |
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1 | | compliance
with Section 2c of this Act.
|
2 | | Sales of tangible personal property, which property, to the |
3 | | extent not
first subjected to a use for which it was purchased, |
4 | | as an ingredient or
constituent, goes into and forms a part of |
5 | | tangible personal property
subsequently the subject of a "Sale |
6 | | at retail", are not sales at retail as
defined in this Act: |
7 | | Provided that the property purchased is deemed to be
purchased |
8 | | for the purpose of resale, despite first being used, to the
|
9 | | extent to which it is resold as an ingredient of an |
10 | | intentionally produced
product or byproduct of manufacturing.
|
11 | | "Sale at retail" shall be construed to include any Illinois |
12 | | florist's
sales transaction in which the purchase order is |
13 | | received in Illinois by a
florist and the sale is for use or |
14 | | consumption, but the Illinois florist
has a florist in another |
15 | | state deliver the property to the purchaser or the
purchaser's |
16 | | donee in such other state.
|
17 | | Nonreusable tangible personal property that is used by |
18 | | persons engaged in
the business of operating a restaurant, |
19 | | cafeteria, or drive-in is a sale for
resale when it is |
20 | | transferred to customers in the ordinary course of business
as |
21 | | part of the sale of food or beverages and is used to deliver, |
22 | | package, or
consume food or beverages, regardless of where |
23 | | consumption of the food or
beverages occurs. Examples of those |
24 | | items include, but are not limited to
nonreusable, paper and |
25 | | plastic cups, plates, baskets, boxes, sleeves, buckets
or other |
26 | | containers, utensils, straws, placemats, napkins, doggie bags, |
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1 | | and
wrapping or packaging
materials that are transferred to |
2 | | customers as part of the sale of food or
beverages in the |
3 | | ordinary course of business.
|
4 | | The purchase, employment and transfer of such tangible |
5 | | personal property
as newsprint and ink for the primary purpose |
6 | | of conveying news (with or
without other information) is not a |
7 | | purchase, use or sale of tangible
personal property.
|
8 | | A person whose activities are organized and conducted |
9 | | primarily as a
not-for-profit service enterprise, and who |
10 | | engages in selling tangible
personal property at retail |
11 | | (whether to the public or merely to members and
their guests) |
12 | | is engaged in the business of selling tangible personal
|
13 | | property at retail with respect to such transactions, excepting |
14 | | only a
person organized and operated exclusively for |
15 | | charitable, religious or
educational purposes either (1), to |
16 | | the extent of sales by such person to
its members, students, |
17 | | patients or inmates of tangible personal property to
be used |
18 | | primarily for the purposes of such person, or (2), to the |
19 | | extent of
sales by such person of tangible personal property |
20 | | which is not sold or
offered for sale by persons organized for |
21 | | profit. The selling of school
books and school supplies by |
22 | | schools at retail to students is not
"primarily for the |
23 | | purposes of" the school which does such selling. The
provisions |
24 | | of this paragraph shall not apply to nor subject to taxation
|
25 | | occasional dinners, socials or similar activities of a person |
26 | | organized and
operated exclusively for charitable, religious |
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1 | | or educational purposes,
whether or not such activities are |
2 | | open to the public.
|
3 | | A person who is the recipient of a grant or contract under |
4 | | Title VII of
the Older Americans Act of 1965 (P.L. 92-258) and |
5 | | serves meals to
participants in the federal Nutrition Program |
6 | | for the Elderly in return for
contributions established in |
7 | | amount by the individual participant pursuant
to a schedule of |
8 | | suggested fees as provided for in the federal Act is not
|
9 | | engaged in the business of selling tangible personal property |
10 | | at retail
with respect to such transactions.
|
11 | | "Purchaser" means anyone who, through a sale at retail, |
12 | | acquires the
ownership of or title to tangible personal |
13 | | property for a valuable
consideration.
|
14 | | "Reseller of motor fuel" means any person engaged in the |
15 | | business of selling
or delivering or transferring title of |
16 | | motor fuel to another person
other than for use or consumption.
|
17 | | No person shall act as a reseller of motor fuel within this |
18 | | State without
first being registered as a reseller pursuant to |
19 | | Section 2c or a retailer
pursuant to Section 2a.
|
20 | | "Selling price" or the "amount of sale" means the |
21 | | consideration for a
sale valued in money whether received in |
22 | | money or otherwise, including
cash, credits, property, other |
23 | | than as hereinafter provided, and services,
but not including |
24 | | the value of or credit given for traded-in tangible
personal |
25 | | property where the item that is traded-in is of like kind and
|
26 | | character as that which is being sold, and shall be determined |
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1 | | without any
deduction on account of the cost of the property |
2 | | sold, the cost of
materials used, labor or service cost or any |
3 | | other expense whatsoever, but
does not include charges that are |
4 | | added to prices by sellers on account of
the seller's tax |
5 | | liability under this Act, or on account of the seller's
duty to |
6 | | collect, from the purchaser, the tax that is imposed by the Use |
7 | | Tax
Act, or, except as otherwise provided with respect to any |
8 | | cigarette tax imposed by a home rule unit, on account of the |
9 | | seller's tax liability under any local occupation tax |
10 | | administered by the Department, or, except as otherwise |
11 | | provided with respect to any cigarette tax imposed by a home |
12 | | rule unit on account of the seller's duty to collect, from the |
13 | | purchasers, the tax that is imposed under any local use tax |
14 | | administered by the Department.
Effective December 1, 1985, |
15 | | "selling price" shall include charges that
are added to prices |
16 | | by sellers on account of the seller's
tax liability under the |
17 | | Cigarette Tax Act, on account of the sellers'
duty to collect, |
18 | | from the purchaser, the tax imposed under the Cigarette
Use Tax |
19 | | Act, and on account of the seller's duty to collect, from the
|
20 | | purchaser, any cigarette tax imposed by a home rule unit. On |
21 | | and after January 1, 2005, with respect to sales of cellular |
22 | | telephones or other wireless cellular devices, the term |
23 | | "selling price" does not include consideration paid by a |
24 | | third-party cellular service provider.
|
25 | | The phrase "like kind and character" shall be liberally |
26 | | construed
(including but not limited to any form of motor |
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1 | | vehicle for any form of
motor vehicle, or any kind of farm or |
2 | | agricultural implement for any other
kind of farm or |
3 | | agricultural implement), while not including a kind of item
|
4 | | which, if sold at retail by that retailer, would be exempt from |
5 | | retailers'
occupation tax and use tax as an isolated or |
6 | | occasional sale.
|
7 | | "Gross receipts" from the sales of tangible personal |
8 | | property at retail
means the total selling price or the amount |
9 | | of such sales, as hereinbefore
defined. In the case of charge |
10 | | and time sales, the amount thereof shall be
included only as |
11 | | and when payments are received by the seller.
Receipts or other |
12 | | consideration derived by a seller from
the sale, transfer or |
13 | | assignment of accounts receivable to a wholly owned
subsidiary |
14 | | will not be deemed payments prior to the time the purchaser
|
15 | | makes payment on such accounts. With respect to sales of |
16 | | cellular telephones or other wireless cellular devices, the |
17 | | term "gross receipts" does not include consideration paid by a |
18 | | third-party cellular service provider.
|
19 | | "Wireless cellular device" means any wireless |
20 | | communication device that provides for voice or data |
21 | | communication between 2 or more parties, including, but not |
22 | | limited to, a text messaging device or other device that sends |
23 | | or receives messages or electronic data. |
24 | | "Department" means the Department of Revenue.
|
25 | | "Person" means any natural individual, firm, partnership, |
26 | | association,
joint stock company, joint adventure, public or |
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1 | | private corporation, limited
liability company, or a receiver, |
2 | | executor, trustee, guardian or other
representative appointed |
3 | | by order of any court.
|
4 | | The isolated or occasional sale of tangible personal |
5 | | property at retail
by a person who does not hold himself out as |
6 | | being engaged (or who does not
habitually engage) in selling |
7 | | such tangible personal property at retail, or
a sale through a |
8 | | bulk vending machine, does not constitute engaging in a
|
9 | | business of selling such tangible personal property at retail |
10 | | within the
meaning of this Act; provided that any person who is |
11 | | engaged in a business
which is not subject to the tax imposed |
12 | | by this Act because of involving
the sale of or a contract to |
13 | | sell real estate or a construction contract to
improve real |
14 | | estate or a construction contract to engineer, install, and
|
15 | | maintain an integrated system of products, but who, in the |
16 | | course of
conducting such business,
transfers tangible |
17 | | personal property to users or consumers in the finished
form in |
18 | | which it was purchased, and which does not become real estate |
19 | | or was
not engineered and installed, under any provision of a |
20 | | construction contract or
real estate sale or real estate sales |
21 | | agreement entered into with some other
person arising out of or |
22 | | because of such nontaxable business, is engaged in the
business |
23 | | of selling tangible personal property at retail to the extent |
24 | | of the
value of the tangible personal property so transferred. |
25 | | If, in such a
transaction, a separate charge is made for the |
26 | | tangible personal property so
transferred, the value of such |
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1 | | property, for the purpose of this Act, shall be
the amount so |
2 | | separately charged, but not less than the cost of such property
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3 | | to the transferor; if no separate charge is made, the value of |
4 | | such property,
for the purposes of this Act, is the cost to the |
5 | | transferor of such tangible
personal property. Construction |
6 | | contracts for the improvement of real estate
consisting of |
7 | | engineering, installation, and maintenance of voice, data, |
8 | | video,
security, and all telecommunication systems do not |
9 | | constitute engaging in a
business of selling tangible personal |
10 | | property at retail within the meaning of
this Act if they are |
11 | | sold at one specified contract price.
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12 | | A person who holds himself or herself out as being engaged |
13 | | (or who habitually
engages) in selling tangible personal |
14 | | property at retail is a person
engaged in the business of |
15 | | selling tangible personal property at retail
hereunder with |
16 | | respect to such sales (and not primarily in a service
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17 | | occupation) notwithstanding the fact that such person designs |
18 | | and produces
such tangible personal property on special order |
19 | | for the purchaser and in
such a way as to render the property |
20 | | of value only to such purchaser, if
such tangible personal |
21 | | property so produced on special order serves
substantially the |
22 | | same function as stock or standard items of tangible
personal |
23 | | property that are sold at retail.
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24 | | Persons who engage in the business of transferring tangible |
25 | | personal
property upon the redemption of trading stamps are |
26 | | engaged in the business
of selling such property at retail and |
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1 | | shall be liable for and shall pay
the tax imposed by this Act |
2 | | on the basis of the retail value of the
property transferred |
3 | | upon redemption of such stamps.
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4 | | "Bulk vending machine" means a vending machine,
containing |
5 | | unsorted confections, nuts, toys, or other items designed
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6 | | primarily to be used or played with by children
which, when a |
7 | | coin or coins of a denomination not larger than $0.50 are
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8 | | inserted, are dispensed in equal portions, at random and
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9 | | without selection by the customer.
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10 | | (Source: P.A. 95-723, eff. 6-23-08.)
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11 | | Section 99. Effective date. This Act takes effect upon |
12 | | becoming law.
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