103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB1023

 

Introduced 1/12/2023, by Rep. Mary E. Flowers

 

SYNOPSIS AS INTRODUCED:
 
New Act
5 ILCS 100/5-45.35 new

    Creates the Financial Transaction Tax Act. Beginning January 1, 2024, imposes a tax on the privilege of engaging in a financial transaction on any of the following exchanges or boards of trade: the Chicago Stock Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade, or the Chicago Board Options Exchange. Provides that the tax is imposed at a rate of $1 per transaction for all transactions for which the underlying asset is an agricultural product, a financial instruments contract, or an options contract. Provides that transactions executed via open outcry that are physically filled on the exchange floor are exempt from the tax. Provides that the term "financial transaction" means a transaction involving the purchase or sale of a stock contract, futures contract, swap contract, credit default swap contract, or options contract, but does not include a transaction involving securities held in a retirement account or a transaction involving a mutual fund. Effective January 1, 2024.


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A BILL FOR

 

HB1023LRB103 04910 HLH 49920 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the
5Financial Transaction Tax Act.
 
6    Section 2. Findings. The General Assembly finds that:
7        (1) a financial transaction tax is a fair and
8    sustainable source of revenue for the State; and
9        (2) a financial transaction tax will promote job
10    growth and economic stability and reduce the negative
11    effects created by high frequency trading.
 
12    Section 3. Definitions. As used in this Act:
13    "Department" means the Department of Revenue.
14    "Financial transaction" means a transaction involving the
15purchase or sale of a stock contract, futures contract,
16futures options contract, swap contract, credit default swap
17contract, or options contract, but does not include a
18transaction involving securities held in a retirement account
19or a transaction involving a mutual fund.
 
20    Section 5. Tax imposed; definitions.
21    (a) Beginning January 1, 2024, a tax is imposed on the

 

 

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1privilege of engaging in a financial transaction on any of the
2following exchanges or boards of trade: the Chicago Stock
3Exchange; the Chicago Mercantile Exchange; the Chicago Board
4of Trade; or the Chicago Board Options Exchange. The tax is
5imposed at a rate of $1 for each transaction for which the
6underlying asset is an agricultural product, a financial
7instruments contract, or an options contract. The tax shall be
8paid by the trading facility or, in any other case, by the
9purchaser involved in the transaction. All transactions
10executed via open outcry that are physically filled on the
11exchange floor are exempt from the tax.
12    (b) The tax shall be collected by the exchange or board of
13trade and shall be remitted to the Department of Revenue
14biannually in the form and manner required by the Department.
15The exchange or board of trade may retain 5% of the amount
16collected, which is allowed to reimburse the exchange or board
17of trade for the expenses incurred in keeping records,
18preparing and filing returns, remitting the tax, and supplying
19data to the Department on request.
20    (c) Subject to the provisions of subsection (b), the tax
21imposed under this Act, and all civil penalties that may be
22assessed as an incident thereof, shall be administered,
23collected, and enforced by the Department of Revenue, and
24commodity brokers shall register with the Department in the
25same manner as required under the Retailers' Occupation Tax
26Act insofar as may be applicable. The Department of Revenue

 

 

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1has full power to administer and enforce this Act, to collect
2all taxes and penalties due under this Act, to dispose of taxes
3and penalties so collected as provided in this Act, and to
4determine all rights to credit memoranda arising on account of
5the erroneous payment of a tax or penalty under this Act. The
6Department of Revenue shall pay over to the State Treasurer
7all moneys remitted to the Department under this Act for
8deposit into the General Revenue Fund.
 
9    Section 10. Recordkeeping. Each exchange or board of trade
10that is subject to the tax under this Act shall keep records
11and books of all transactions giving rise to a tax under this
12Act. Those books and records shall be kept in the English
13language and shall, at all times during business hours of the
14day, be subject to inspection by the Department or its duly
15authorized agents and employees.
 
16    Section 15. Retailers' Occupation Tax Act and Uniform
17Penalty and Interest Act adopted. The provisions of Sections
184, 5, 5f, 5i, 6, 6a, 6b, 6c, 8, 9, 10, and 12 of the Retailers'
19Occupation Tax Act which are not inconsistent with this Act,
20and Section 3-7 of the Uniform Penalty and Interest Act, shall
21apply as far as practicable to the subject matter of this Act
22to the same extent as if those provisions were included in this
23Act.
 

 

 

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1    Section 20. Rules. The Department shall adopt
2administrative rules to implement and administer this Act.
3Initial rules may be adopted as emergency rules.
 
4    Section 25. Interstate commerce exemption. No tax is
5imposed under this Act upon the privilege of engaging in a
6business in interstate commerce or otherwise when the business
7may not, under the Constitution and statutes of the United
8States, be made the subject of taxation by this State.
 
9    Section 900. The Illinois Administrative Procedure Act is
10amended by adding Section 5-45.35 as follows:
 
11    (5 ILCS 100/5-45.35 new)
12    Sec. 5-45.35. Emergency rulemaking. To provide for the
13expeditious and timely implementation of the Financial
14Transaction Tax Act, emergency rules implementing the
15Financial Transaction Tax Act may be adopted in accordance
16with Section 5-45 by the Department of Revenue. The adoption
17of emergency rules authorized by Section 5-45 and this Section
18is deemed to be necessary for the public interest, safety, and
19welfare.
20    This Section is repealed one year after the effective date
21of this amendatory Act of the 103rd General Assembly.
 
22    Section 999. Effective date. This Act takes effect January
231, 2024.