99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB5700

 

Introduced , by Rep. Patrick J. Verschoore

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 173/5-10
35 ILCS 615/1  from Ch. 120, par. 467.16
35 ILCS 640/2-4

    Amends the Gas Use Tax Law. Exempts certain business enterprises from taxation under the Act. Amends the Gas Revenue Tax Act. Provides that the definition of "gross receipts" does not include consideration received from certain business enterprises. Amends the Electricity Excise Tax Law. Provides that the tax under the Act is not imposed with respect to any use by the purchaser in the process of manufacturing or assembling tangible personal property for wholesale or for retail sale or lease. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Gas Use Tax Law is amended by changing
5Section 5-10 as follows:
 
6    (35 ILCS 173/5-10)
7    Sec. 5-10. Imposition of tax. Beginning October 1, 2003, a
8tax is imposed upon the privilege of using in this State gas
9obtained in a purchase of out-of-state gas at the rate of 2.4
10cents per therm or 5% of the purchase price for the billing
11period, whichever is the lower rate. Such tax rate shall be
12referred to as the "self-assessing purchaser tax rate".
13Beginning with bills issued by delivering suppliers on and
14after October 1, 2003, purchasers may elect an alternative tax
15rate of 2.4 cents per therm to be paid under the provisions of
16Section 5-15 of this Law to a delivering supplier maintaining a
17place of business in this State. Such tax rate shall be
18referred to as the "alternate tax rate".
19    The tax imposed under this Section shall not apply to gas
20used by business enterprises certified under Section 9-222.1 of
21the Public Utilities Act, as amended, to the extent of such
22exemption and during the period of time specified by the
23Department of Commerce and Economic Opportunity.

 

 

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1    The tax imposed under this Section does not apply to gas
2used by any business enterprise that is properly assigned or
3included within one of the following Standard Industrial
4Classifications, as designated in the Standard Industrial
5Classification Manual prepared by the federal Office of
6Management and Budget: 10; 12; 13; 14; 21; 22; 23; 24; 25; 26;
727; 28; 29; 30; 31; 32; 33; 34; 35; 36; 37; 38; or 39.
8(Source: P.A. 93-31, eff. 10-1-03; 94-793, eff. 5-19-06.)
 
9    Section 10. The Gas Revenue Tax Act is amended by changing
10Section 1 as follows:
 
11    (35 ILCS 615/1)  (from Ch. 120, par. 467.16)
12    Sec. 1. For the purposes of this Act: "Gross receipts"
13means the consideration received for gas distributed,
14supplied, furnished or sold to persons for use or consumption
15and not for resale, and for all services (including the
16transportation or storage of gas for an end-user) rendered in
17connection therewith, and shall include cash, services and
18property of every kind or nature, and shall be determined
19without any deduction on account of the cost of the service,
20product or commodity supplied, the cost of materials used,
21labor or service costs, or any other expense whatsoever.
22However, "gross receipts" shall not include receipts from:
23        (i) any minimum or other charge for gas or gas service
24    where the customer has taken no therms of gas;

 

 

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1        (ii) any charge for a dishonored check;
2        (iii) any finance or credit charge, penalty or charge
3    for delayed payment, or discount for prompt payment;
4        (iv) any charge for reconnection of service or for
5    replacement or relocation of facilities;
6        (v) any advance or contribution in aid of construction;
7        (vi) repair, inspection or servicing of equipment
8    located on customer premises;
9        (vii) leasing or rental of equipment, the leasing or
10    rental of which is not necessary to distributing,
11    furnishing, supplying, selling, transporting or storing
12    gas;
13        (viii) any sale to a customer if the taxpayer is
14    prohibited by federal or State constitution, treaty,
15    convention, statute or court decision from recovering the
16    related tax liability from such customer;
17        (ix) any charges added to customers' bills pursuant to
18    the provisions of Section 9-221 or Section 9-222 of the
19    Public Utilities Act, as amended, or any charges added to
20    customers' bills by taxpayers who are not subject to rate
21    regulation by the Illinois Commerce Commission for the
22    purpose of recovering any of the tax liabilities or other
23    amounts specified in such provisions of such Act; and
24        (x) prior to October 1, 2003, any charge for gas or gas
25    services to a customer who acquired contractual rights for
26    the direct purchase of gas or gas services originating from

 

 

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1    an out-of-state supplier or source on or before March 1,
2    1995, except for those charges solely related to the local
3    distribution of gas by a public utility. This exemption
4    includes any charge for gas or gas service, except for
5    those charges solely related to the local distribution of
6    gas by a public utility, to a customer who maintained an
7    account with a public utility (as defined in Section 3-105
8    of the Public Utilities Act) for the transportation of
9    customer-owned gas on or before March 1, 1995. The
10    provisions of this amendatory Act of 1997 are intended to
11    clarify, rather than change, existing law as to the meaning
12    and scope of this exemption. This exemption (x) expires on
13    September 30, 2003.
14    In case credit is extended, the amount thereof shall be
15included only as and when payments are received.
16    "Gross receipts" shall not include consideration received
17from business enterprises certified under Section 9-222.1 of
18the Public Utilities Act, as amended, to the extent of such
19exemption and during the period of time specified by the
20Department of Commerce and Economic Opportunity.
21    "Gross receipts" does not include consideration received
22from any business enterprise that is properly assigned or
23included within one of the following Standard Industrial
24Classifications, as designated in the Standard Industrial
25Classification Manual prepared by the federal Office of
26Management and Budget: 10; 12; 13; 14; 21; 22; 23; 24; 25; 26;

 

 

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127; 28; 29; 30; 31; 32; 33; 34; 35; 36; 37; 38; or 39.
2    "Department" means the Department of Revenue of the State
3of Illinois.
4    "Director" means the Director of Revenue for the Department
5of Revenue of the State of Illinois.
6    "Taxpayer" means a person engaged in the business of
7distributing, supplying, furnishing or selling gas for use or
8consumption and not for resale.
9    "Person" means any natural individual, firm, trust,
10estate, partnership, association, joint stock company, joint
11adventure, corporation, limited liability company, or a
12receiver, trustee, guardian or other representative appointed
13by order of any court, or any city, town, county or other
14political subdivision of this State.
15    "Invested capital" means that amount equal to (i) the
16average of the balances at the beginning and end of each
17taxable period of the taxpayer's total stockholder's equity and
18total long-term debt, less investments in and advances to all
19corporations, as set forth on the balance sheets included in
20the taxpayer's annual report to the Illinois Commerce
21Commission for the taxable period; (ii) multiplied by a
22fraction determined under Sections 301 and 304(a) of the
23"Illinois Income Tax Act" and reported on the Illinois income
24tax return for the taxable period ending in or with the taxable
25period in question. However, notwithstanding the income tax
26return reporting requirement stated above, beginning July 1,

 

 

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11979, no taxpayer's denominators used to compute the sales,
2property or payroll factors under subsection (a) of Section 304
3of the Illinois Income Tax Act shall include payroll, property
4or sales of any corporate entity other than the taxpayer for
5the purposes of determining an allocation for the invested
6capital tax. This amendatory Act of 1982, Public Act 82-1024,
7is not intended to and does not make any change in the meaning
8of any provision of this Act, it having been the intent of the
9General Assembly in initially enacting the definition of
10"invested capital" to provide for apportionment of the invested
11capital of each company, based solely upon the sales, property
12and payroll of that company.
13    "Taxable period" means each period which ends after the
14effective date of this Act and which is covered by an annual
15report filed by the taxpayer with the Illinois Commerce
16Commission.
17(Source: P.A. 93-31, eff. 10-1-03; 94-793, eff. 5-19-06.)
 
18    Section 15. The Electricity Excise Tax Law is amended by
19changing Section 2-4 as follows:
 
20    (35 ILCS 640/2-4)
21    Sec. 2-4. Tax imposed.
22    (a) Except as provided in subsection (b), a tax is imposed
23on the privilege of using in this State electricity purchased
24for use or consumption and not for resale, other than by

 

 

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1municipal corporations owning and operating a local
2transportation system for public service, at the following
3rates per kilowatt-hour delivered to the purchaser:
4        (i) For the first 2000 kilowatt-hours used or consumed
5    in a month: 0.330 cents per kilowatt-hour;
6        (ii) For the next 48,000 kilowatt-hours used or
7    consumed in a month: 0.319 cents per kilowatt-hour;
8        (iii) For the next 50,000 kilowatt-hours used or
9    consumed in a month: 0.303 cents per kilowatt-hour;
10        (iv) For the next 400,000 kilowatt-hours used or
11    consumed in a month: 0.297 cents per kilowatt-hour;
12        (v) For the next 500,000 kilowatt-hours used or
13    consumed in a month: 0.286 cents per kilowatt-hour;
14        (vi) For the next 2,000,000 kilowatt-hours used or
15    consumed in a month: 0.270 cents per kilowatt-hour;
16        (vii) For the next 2,000,000 kilowatt-hours used or
17    consumed in a month: 0.254 cents per kilowatt-hour;
18        (viii) For the next 5,000,000 kilowatt-hours used or
19    consumed in a month: 0.233 cents per kilowatt-hour;
20        (ix) For the next 10,000,000 kilowatt-hours used or
21    consumed in a month: 0.207 cents per kilowatt-hour;
22        (x) For all electricity in excess of 20,000,000
23    kilowatt-hours used or consumed in a month: 0.202 cents per
24    kilowatt-hour.
25    Provided, that in lieu of the foregoing rates, the tax is
26imposed on a self-assessing purchaser at the rate of 5.1% of

 

 

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1the self-assessing purchaser's purchase price for all
2electricity distributed, supplied, furnished, sold,
3transmitted and delivered to the self-assessing purchaser in a
4month.
5    (b) A tax is imposed on the privilege of using in this
6State electricity purchased from a municipal system or electric
7cooperative, as defined in Article XVII of the Public Utilities
8Act, which has not made an election as permitted by either
9Section 17-200 or Section 17-300 of such Act, at the lesser of
100.32 cents per kilowatt hour of all electricity distributed,
11supplied, furnished, sold, transmitted, and delivered by such
12municipal system or electric cooperative to the purchaser or 5%
13of each such purchaser's purchase price for all electricity
14distributed, supplied, furnished, sold, transmitted, and
15delivered by such municipal system or electric cooperative to
16the purchaser, whichever is the lower rate as applied to each
17purchaser in each billing period.
18    (c) The tax imposed by this Section 2-4 is not imposed: (i)
19with respect to any use of electricity by business enterprises
20certified under Section 9-222.1 or 9-222.1A of the Public
21Utilities Act, as amended, to the extent of such exemption and
22during the time specified by the Department of Commerce and
23Economic Opportunity; (ii) with respect to any use by the
24purchaser in the process of manufacturing or assembling
25tangible personal property for wholesale or for retail sale or
26lease; or (iii) with respect to any transaction in interstate

 

 

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1commerce, or otherwise, to the extent to which such transaction
2may not, under the Constitution and statutes of the United
3States, be made the subject of taxation by this State.
4(Source: P.A. 94-793, eff. 5-19-06.)
 
5    Section 99. Effective date. This Act takes effect upon
6becoming law.