Rep. Bill Mitchell

Filed: 3/1/2006

 

 


 

 


 
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1
AMENDMENT TO HOUSE BILL 5257

2     AMENDMENT NO. ______. Amend House Bill 5257 by replacing
3 Section 5 of the bill with the following:
 
4     "Section 5. The Simplified Municipal Telecommunications
5 Tax Act is amended by changing Section 5-7 as follows:
 
6     (35 ILCS 636/5-7)
7     Sec. 5-7. Definitions. For purposes of the taxes authorized
8 by this Act:
9     "Amount paid" means the amount charged to the taxpayer's
10 service address in such municipality regardless of where such
11 amount is billed or paid.
12     "Department" means the Illinois Department of Revenue.
13     "Gross charge" means the amount paid for the act or
14 privilege of originating or receiving telecommunications in
15 such municipality and for all services and equipment provided
16 in connection therewith by a retailer, valued in money whether
17 paid in money or otherwise, including cash, credits, services
18 and property of every kind or nature, and shall be determined
19 without any deduction on account of the cost of such
20 telecommunications, the cost of the materials used, labor or
21 service costs or any other expense whatsoever. In case credit
22 is extended, the amount thereof shall be included only as and
23 when paid. "Gross charges" for private line service shall
24 include charges imposed at each channel termination point

 

 

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1 within a municipality that has imposed a tax under this Section
2 and charges for the portion of the inter-office channels
3 provided within that municipality. Charges for that portion of
4 the inter-office channel connecting 2 or more channel
5 termination points, one or more of which is located within the
6 jurisdictional boundary of such municipality, shall be
7 determined by the retailer by multiplying an amount equal to
8 the total charge for the inter-office channel by a fraction,
9 the numerator of which is the number of channel termination
10 points that are located within the jurisdictional boundary of
11 the municipality and the denominator of which is the total
12 number of channel termination points connected by the
13 inter-office channel. Prior to January 1, 2004, any method
14 consistent with this paragraph or other method that reasonably
15 apportions the total charges for inter-office channels among
16 the municipalities in which channel termination points are
17 located shall be accepted as a reasonable method to determine
18 the taxable portion of an inter-office channel provided within
19 a municipality for that period. However, "gross charge" shall
20 not include any of the following:
21         (1) Any amounts added to a purchaser's bill because of
22     a charge made pursuant to: (i) the tax imposed by this Act,
23     (ii) the tax imposed by the Telecommunications Excise Tax
24     Act, (iii) the tax imposed by Section 4251 of the Internal
25     Revenue Code, (iv) 911 surcharges, or (v) charges added to
26     customers' bills pursuant to the provisions of Section
27     9-221 or 9-222 of the Public Utilities Act, as amended, or
28     any similar charges added to customers' bills by retailers
29     who are not subject to rate regulation by the Illinois
30     Commerce Commission for the purpose of recovering any of
31     the tax liabilities or other amounts specified in those
32     provisions of the Public Utilities Act.
33         (2) Charges for a sent collect telecommunication
34     received outside of such municipality.

 

 

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1         (3) Charges for leased time on equipment or charges for
2     the storage of data or information for subsequent retrieval
3     or the processing of data or information intended to change
4     its form or content. Such equipment includes, but is not
5     limited to, the use of calculators, computers, data
6     processing equipment, tabulating equipment or accounting
7     equipment and also includes the usage of computers under a
8     time-sharing agreement.
9         (4) Charges for customer equipment, including such
10     equipment that is leased or rented by the customer from any
11     source, wherein such charges are disaggregated and
12     separately identified from other charges.
13         (5) Charges to business enterprises certified as
14     exempt under Section 9-222.1 of the Public Utilities Act to
15     the extent of such exemption and during the period of time
16     specified by the Department of Commerce and Economic
17     Opportunity Community Affairs.
18         (6) Charges for telecommunications and all services
19     and equipment provided in connection therewith between a
20     parent corporation and its wholly owned subsidiaries or
21     between wholly owned subsidiaries when the tax imposed
22     under this Act has already been paid to a retailer and only
23     to the extent that the charges between the parent
24     corporation and wholly owned subsidiaries or between
25     wholly owned subsidiaries represent expense allocation
26     between the corporations and not the generation of profit
27     for the corporation rendering such service.
28         (7) Bad debts ("bad debt" means any portion of a debt
29     that is related to a sale at retail for which gross charges
30     are not otherwise deductible or excludable that has become
31     worthless or uncollectible, as determined under applicable
32     federal income tax standards; if the portion of the debt
33     deemed to be bad is subsequently paid, the retailer shall
34     report and pay the tax on that portion during the reporting

 

 

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1     period in which the payment is made).
2         (8) Charges paid by inserting coins in coin-operated
3     telecommunication devices.
4         (9) Amounts paid by telecommunications retailers under
5     the Telecommunications Infrastructure Maintenance Fee Act.
6         (10) Charges for nontaxable services or
7     telecommunications if (i) those charges are aggregated
8     with other charges for telecommunications that are
9     taxable, (ii) those charges are not separately stated on
10     the customer bill or invoice, and (iii) the retailer can
11     reasonably identify the nontaxable charges on the
12     retailer's books and records kept in the regular course of
13     business. If the nontaxable charges cannot reasonably be
14     identified, the gross charge from the sale of both taxable
15     and nontaxable services or telecommunications billed on a
16     combined basis shall be attributed to the taxable services
17     or telecommunications. The burden of proving nontaxable
18     charges shall be on the retailer of the telecommunications.
19     "Interstate telecommunications" means all
20 telecommunications that either originate or terminate outside
21 this State.
22     "Intrastate telecommunications" means all
23 telecommunications that originate and terminate within this
24 State.
25     "Person" means any natural individual, firm, trust,
26 estate, partnership, association, joint stock company, joint
27 venture, corporation, limited liability company, or a
28 receiver, trustee, guardian, or other representative appointed
29 by order of any court, the Federal and State governments,
30 including State universities created by statute, or any city,
31 town, county, or other political subdivision of this State.
32     "Purchase at retail" means the acquisition, consumption or
33 use of telecommunications through a sale at retail.
34     "Retailer" means and includes every person engaged in the

 

 

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1 business of making sales at retail as defined in this Section.
2 The Department may, in its discretion, upon application,
3 authorize the collection of the tax hereby imposed by any
4 retailer not maintaining a place of business within this State,
5 who, to the satisfaction of the Department, furnishes adequate
6 security to insure collection and payment of the tax. Such
7 retailer shall be issued, without charge, a permit to collect
8 such tax. When so authorized, it shall be the duty of such
9 retailer to collect the tax upon all of the gross charges for
10 telecommunications in this State in the same manner and subject
11 to the same requirements as a retailer maintaining a place of
12 business within this State. The permit may be revoked by the
13 Department at its discretion.
14     "Retailer maintaining a place of business in this State",
15 or any like term, means and includes any retailer having or
16 maintaining within this State, directly or by a subsidiary, an
17 office, distribution facilities, transmission facilities,
18 sales office, warehouse or other place of business, or any
19 agent or other representative operating within this State under
20 the authority of the retailer or its subsidiary, irrespective
21 of whether such place of business or agent or other
22 representative is located here permanently or temporarily, or
23 whether such retailer or subsidiary is licensed to do business
24 in this State.
25     "Sale at retail" means the transmitting, supplying or
26 furnishing of telecommunications and all services and
27 equipment provided in connection therewith for a
28 consideration, to persons other than the Federal and State
29 governments, and State universities created by statute and
30 other than between a parent corporation and its wholly owned
31 subsidiaries or between wholly owned subsidiaries for their use
32 or consumption and not for resale.
33     "Service address" means the location of telecommunications
34 equipment from which telecommunications services are

 

 

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1 originated or at which telecommunications services are
2 received by a taxpayer. In the event this may not be a defined
3 location, as in the case of mobile phones, paging systems, and
4 maritime systems, service address means the customer's place of
5 primary use as defined in the Mobile Telecommunications
6 Sourcing Conformity Act. For air-to-ground systems and the
7 like, "service address" shall mean the location of a taxpayer's
8 primary use of the telecommunications equipment as defined by
9 telephone number, authorization code, or location in Illinois
10 where bills are sent. "Service address" includes the 9-digit
11 enhanced United States postal zip code.
12     "Taxpayer" means a person who individually or through his
13 or her agents, employees, or permittees engages in the act or
14 privilege of originating or receiving telecommunications in a
15 municipality and who incurs a tax liability as authorized by
16 this Act.
17     "Telecommunications", in addition to the meaning
18 ordinarily and popularly ascribed to it, includes, without
19 limitation, messages or information transmitted through use of
20 local, toll, and wide area telephone service, private line
21 services, channel services, telegraph services,
22 teletypewriter, computer exchange services, cellular mobile
23 telecommunications service, specialized mobile radio,
24 stationary two-way radio, paging service, or any other form of
25 mobile and portable one-way or two-way communications, or any
26 other transmission of messages or information by electronic or
27 similar means, between or among points by wire, cable, fiber
28 optics, laser, microwave, radio, satellite, or similar
29 facilities. As used in this Act, "private line" means a
30 dedicated non-traffic sensitive service for a single customer,
31 that entitles the customer to exclusive or priority use of a
32 communications channel or group of channels, from one or more
33 specified locations to one or more other specified locations.
34 The definition of "telecommunications" shall not include value

 

 

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1 added services in which computer processing applications are
2 used to act on the form, content, code, and protocol of the
3 information for purposes other than transmission.
4 "Telecommunications" shall not include purchases of
5 telecommunications by a telecommunications service provider
6 for use as a component part of the service provided by such
7 provider to the ultimate retail consumer who originates or
8 terminates the taxable end-to-end communications. Carrier
9 access charges, right of access charges, charges for use of
10 inter-company facilities, and all telecommunications resold in
11 the subsequent provision of, used as a component of, or
12 integrated into, end-to-end telecommunications service shall
13 be non-taxable as sales for resale. Prepaid telephone calling
14 arrangements shall not be considered "telecommunications"
15 subject to the tax imposed under this Act. For purposes of this
16 Section, "prepaid telephone calling arrangements" means that
17 term as defined in Section 2-27 of the Retailers' Occupation
18 Tax Act.
19 (Source: P.A. 92-526, eff. 7-1-02; 92-878, eff. 1-1-04; 93-286,
20 eff. 1-1-04; revised 12-6-03.)".