Illinois General Assembly - Full Text of HB3945
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Full Text of HB3945  101st General Assembly

HB3945 101ST GENERAL ASSEMBLY

  
  

 


 
101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB3945

 

Introduced 10/29/2019, by Rep. Ryan Spain

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/2  from Ch. 120, par. 439.2
35 ILCS 120/1  from Ch. 120, par. 440
625 ILCS 5/3-1001  from Ch. 95 1/2, par. 3-1001

    Amends the Use Tax Act and the Retailers' Occupation Tax Act. Provides that the term "selling price" does not include the value of or credit given for traded-in tangible personal property (currently, beginning on January 1, 2020, with respect to motor vehicles, "selling price" does include the trade-in value). Amends the Illinois Vehicle Code. In a Section concerning the use tax on motor vehicles, makes changes concerning the amount of the tax. Provides that the tax on motorcycles, motor driven cycles, and mopeds shall be the same as for all other motor vehicles. Effective immediately.


LRB101 15136 HLH 64276 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB3945LRB101 15136 HLH 64276 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 5. The Use Tax Act is amended by changing Section 2
5as follows:
 
6    (35 ILCS 105/2)  (from Ch. 120, par. 439.2)
7    Sec. 2. Definitions.
8    "Use" means the exercise by any person of any right or
9power over tangible personal property incident to the ownership
10of that property, except that it does not include the sale of
11such property in any form as tangible personal property in the
12regular course of business to the extent that such property is
13not first subjected to a use for which it was purchased, and
14does not include the use of such property by its owner for
15demonstration purposes: Provided that the property purchased
16is deemed to be purchased for the purpose of resale, despite
17first being used, to the extent to which it is resold as an
18ingredient of an intentionally produced product or by-product
19of manufacturing. "Use" does not mean the demonstration use or
20interim use of tangible personal property by a retailer before
21he sells that tangible personal property. For watercraft or
22aircraft, if the period of demonstration use or interim use by
23the retailer exceeds 18 months, the retailer shall pay on the

 

 

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1retailers' original cost price the tax imposed by this Act, and
2no credit for that tax is permitted if the watercraft or
3aircraft is subsequently sold by the retailer. "Use" does not
4mean the physical incorporation of tangible personal property,
5to the extent not first subjected to a use for which it was
6purchased, as an ingredient or constituent, into other tangible
7personal property (a) which is sold in the regular course of
8business or (b) which the person incorporating such ingredient
9or constituent therein has undertaken at the time of such
10purchase to cause to be transported in interstate commerce to
11destinations outside the State of Illinois: Provided that the
12property purchased is deemed to be purchased for the purpose of
13resale, despite first being used, to the extent to which it is
14resold as an ingredient of an intentionally produced product or
15by-product of manufacturing.
16    "Watercraft" means a Class 2, Class 3, or Class 4
17watercraft as defined in Section 3-2 of the Boat Registration
18and Safety Act, a personal watercraft, or any boat equipped
19with an inboard motor.
20    "Purchase at retail" means the acquisition of the ownership
21of or title to tangible personal property through a sale at
22retail.
23    "Purchaser" means anyone who, through a sale at retail,
24acquires the ownership of tangible personal property for a
25valuable consideration.
26    "Sale at retail" means any transfer of the ownership of or

 

 

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1title to tangible personal property to a purchaser, for the
2purpose of use, and not for the purpose of resale in any form
3as tangible personal property to the extent not first subjected
4to a use for which it was purchased, for a valuable
5consideration: Provided that the property purchased is deemed
6to be purchased for the purpose of resale, despite first being
7used, to the extent to which it is resold as an ingredient of
8an intentionally produced product or by-product of
9manufacturing. For this purpose, slag produced as an incident
10to manufacturing pig iron or steel and sold is considered to be
11an intentionally produced by-product of manufacturing. "Sale
12at retail" includes any such transfer made for resale unless
13made in compliance with Section 2c of the Retailers' Occupation
14Tax Act, as incorporated by reference into Section 12 of this
15Act. Transactions whereby the possession of the property is
16transferred but the seller retains the title as security for
17payment of the selling price are sales.
18    "Sale at retail" shall also be construed to include any
19Illinois florist's sales transaction in which the purchase
20order is received in Illinois by a florist and the sale is for
21use or consumption, but the Illinois florist has a florist in
22another state deliver the property to the purchaser or the
23purchaser's donee in such other state.
24    Nonreusable tangible personal property that is used by
25persons engaged in the business of operating a restaurant,
26cafeteria, or drive-in is a sale for resale when it is

 

 

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1transferred to customers in the ordinary course of business as
2part of the sale of food or beverages and is used to deliver,
3package, or consume food or beverages, regardless of where
4consumption of the food or beverages occurs. Examples of those
5items include, but are not limited to nonreusable, paper and
6plastic cups, plates, baskets, boxes, sleeves, buckets or other
7containers, utensils, straws, placemats, napkins, doggie bags,
8and wrapping or packaging materials that are transferred to
9customers as part of the sale of food or beverages in the
10ordinary course of business.
11    The purchase, employment and transfer of such tangible
12personal property as newsprint and ink for the primary purpose
13of conveying news (with or without other information) is not a
14purchase, use or sale of tangible personal property.
15    "Selling price" means the consideration for a sale valued
16in money whether received in money or otherwise, including
17cash, credits, property other than as hereinafter provided, and
18services, but, prior to January 1, 2020, not including the
19value of or credit given for traded-in tangible personal
20property where the item that is traded-in is of like kind and
21character as that which is being sold; beginning January 1,
222020, "selling price" includes the portion of the value of or
23credit given for traded-in motor vehicles of the First Division
24as defined in Section 1-146 of the Illinois Vehicle Code of
25like kind and character as that which is being sold that
26exceeds $10,000. "Selling price" shall be determined without

 

 

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1any deduction on account of the cost of the property sold, the
2cost of materials used, labor or service cost or any other
3expense whatsoever, but does not include interest or finance
4charges which appear as separate items on the bill of sale or
5sales contract nor charges that are added to prices by sellers
6on account of the seller's tax liability under the "Retailers'
7Occupation Tax Act", or on account of the seller's duty to
8collect, from the purchaser, the tax that is imposed by this
9Act, or, except as otherwise provided with respect to any
10cigarette tax imposed by a home rule unit, on account of the
11seller's tax liability under any local occupation tax
12administered by the Department, or, except as otherwise
13provided with respect to any cigarette tax imposed by a home
14rule unit on account of the seller's duty to collect, from the
15purchasers, the tax that is imposed under any local use tax
16administered by the Department. Effective December 1, 1985,
17"selling price" shall include charges that are added to prices
18by sellers on account of the seller's tax liability under the
19Cigarette Tax Act, on account of the seller's duty to collect,
20from the purchaser, the tax imposed under the Cigarette Use Tax
21Act, and on account of the seller's duty to collect, from the
22purchaser, any cigarette tax imposed by a home rule unit.
23    Notwithstanding any law to the contrary, for any motor
24vehicle, as defined in Section 1-146 of the Vehicle Code, that
25is sold on or after January 1, 2015 for the purpose of leasing
26the vehicle for a defined period that is longer than one year

 

 

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1and (1) is a motor vehicle of the second division that: (A) is
2a self-contained motor vehicle designed or permanently
3converted to provide living quarters for recreational,
4camping, or travel use, with direct walk through access to the
5living quarters from the driver's seat; (B) is of the van
6configuration designed for the transportation of not less than
77 nor more than 16 passengers; or (C) has a gross vehicle
8weight rating of 8,000 pounds or less or (2) is a motor vehicle
9of the first division, "selling price" or "amount of sale"
10means the consideration received by the lessor pursuant to the
11lease contract, including amounts due at lease signing and all
12monthly or other regular payments charged over the term of the
13lease. Also included in the selling price is any amount
14received by the lessor from the lessee for the leased vehicle
15that is not calculated at the time the lease is executed,
16including, but not limited to, excess mileage charges and
17charges for excess wear and tear. For sales that occur in
18Illinois, with respect to any amount received by the lessor
19from the lessee for the leased vehicle that is not calculated
20at the time the lease is executed, the lessor who purchased the
21motor vehicle does not incur the tax imposed by the Use Tax Act
22on those amounts, and the retailer who makes the retail sale of
23the motor vehicle to the lessor is not required to collect the
24tax imposed by this Act or to pay the tax imposed by the
25Retailers' Occupation Tax Act on those amounts. However, the
26lessor who purchased the motor vehicle assumes the liability

 

 

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1for reporting and paying the tax on those amounts directly to
2the Department in the same form (Illinois Retailers' Occupation
3Tax, and local retailers' occupation taxes, if applicable) in
4which the retailer would have reported and paid such tax if the
5retailer had accounted for the tax to the Department. For
6amounts received by the lessor from the lessee that are not
7calculated at the time the lease is executed, the lessor must
8file the return and pay the tax to the Department by the due
9date otherwise required by this Act for returns other than
10transaction returns. If the retailer is entitled under this Act
11to a discount for collecting and remitting the tax imposed
12under this Act to the Department with respect to the sale of
13the motor vehicle to the lessor, then the right to the discount
14provided in this Act shall be transferred to the lessor with
15respect to the tax paid by the lessor for any amount received
16by the lessor from the lessee for the leased vehicle that is
17not calculated at the time the lease is executed; provided that
18the discount is only allowed if the return is timely filed and
19for amounts timely paid. The "selling price" of a motor vehicle
20that is sold on or after January 1, 2015 for the purpose of
21leasing for a defined period of longer than one year shall not
22be reduced by the value of or credit given for traded-in
23tangible personal property owned by the lessor, nor shall it be
24reduced by the value of or credit given for traded-in tangible
25personal property owned by the lessee, regardless of whether
26the trade-in value thereof is assigned by the lessee to the

 

 

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1lessor. In the case of a motor vehicle that is sold for the
2purpose of leasing for a defined period of longer than one
3year, the sale occurs at the time of the delivery of the
4vehicle, regardless of the due date of any lease payments. A
5lessor who incurs a Retailers' Occupation Tax liability on the
6sale of a motor vehicle coming off lease may not take a credit
7against that liability for the Use Tax the lessor paid upon the
8purchase of the motor vehicle (or for any tax the lessor paid
9with respect to any amount received by the lessor from the
10lessee for the leased vehicle that was not calculated at the
11time the lease was executed) if the selling price of the motor
12vehicle at the time of purchase was calculated using the
13definition of "selling price" as defined in this paragraph.
14Notwithstanding any other provision of this Act to the
15contrary, lessors shall file all returns and make all payments
16required under this paragraph to the Department by electronic
17means in the manner and form as required by the Department.
18This paragraph does not apply to leases of motor vehicles for
19which, at the time the lease is entered into, the term of the
20lease is not a defined period, including leases with a defined
21initial period with the option to continue the lease on a
22month-to-month or other basis beyond the initial defined
23period.
24    The phrase "like kind and character" shall be liberally
25construed (including but not limited to any form of motor
26vehicle for any form of motor vehicle, or any kind of farm or

 

 

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1agricultural implement for any other kind of farm or
2agricultural implement), while not including a kind of item
3which, if sold at retail by that retailer, would be exempt from
4retailers' occupation tax and use tax as an isolated or
5occasional sale.
6    "Department" means the Department of Revenue.
7    "Person" means any natural individual, firm, partnership,
8association, joint stock company, joint adventure, public or
9private corporation, limited liability company, or a receiver,
10executor, trustee, guardian or other representative appointed
11by order of any court.
12    "Retailer" means and includes every person engaged in the
13business of making sales at retail as defined in this Section.
14    A person who holds himself or herself out as being engaged
15(or who habitually engages) in selling tangible personal
16property at retail is a retailer hereunder with respect to such
17sales (and not primarily in a service occupation)
18notwithstanding the fact that such person designs and produces
19such tangible personal property on special order for the
20purchaser and in such a way as to render the property of value
21only to such purchaser, if such tangible personal property so
22produced on special order serves substantially the same
23function as stock or standard items of tangible personal
24property that are sold at retail.
25    A person whose activities are organized and conducted
26primarily as a not-for-profit service enterprise, and who

 

 

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1engages in selling tangible personal property at retail
2(whether to the public or merely to members and their guests)
3is a retailer with respect to such transactions, excepting only
4a person organized and operated exclusively for charitable,
5religious or educational purposes either (1), to the extent of
6sales by such person to its members, students, patients or
7inmates of tangible personal property to be used primarily for
8the purposes of such person, or (2), to the extent of sales by
9such person of tangible personal property which is not sold or
10offered for sale by persons organized for profit. The selling
11of school books and school supplies by schools at retail to
12students is not "primarily for the purposes of" the school
13which does such selling. This paragraph does not apply to nor
14subject to taxation occasional dinners, social or similar
15activities of a person organized and operated exclusively for
16charitable, religious or educational purposes, whether or not
17such activities are open to the public.
18    A person who is the recipient of a grant or contract under
19Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
20serves meals to participants in the federal Nutrition Program
21for the Elderly in return for contributions established in
22amount by the individual participant pursuant to a schedule of
23suggested fees as provided for in the federal Act is not a
24retailer under this Act with respect to such transactions.
25    Persons who engage in the business of transferring tangible
26personal property upon the redemption of trading stamps are

 

 

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1retailers hereunder when engaged in such business.
2    The isolated or occasional sale of tangible personal
3property at retail by a person who does not hold himself out as
4being engaged (or who does not habitually engage) in selling
5such tangible personal property at retail or a sale through a
6bulk vending machine does not make such person a retailer
7hereunder. However, any person who is engaged in a business
8which is not subject to the tax imposed by the "Retailers'
9Occupation Tax Act" because of involving the sale of or a
10contract to sell real estate or a construction contract to
11improve real estate, but who, in the course of conducting such
12business, transfers tangible personal property to users or
13consumers in the finished form in which it was purchased, and
14which does not become real estate, under any provision of a
15construction contract or real estate sale or real estate sales
16agreement entered into with some other person arising out of or
17because of such nontaxable business, is a retailer to the
18extent of the value of the tangible personal property so
19transferred. If, in such transaction, a separate charge is made
20for the tangible personal property so transferred, the value of
21such property, for the purposes of this Act, is the amount so
22separately charged, but not less than the cost of such property
23to the transferor; if no separate charge is made, the value of
24such property, for the purposes of this Act, is the cost to the
25transferor of such tangible personal property.
26    "Retailer maintaining a place of business in this State",

 

 

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1or any like term, means and includes any of the following
2retailers:
3        (1) A retailer having or maintaining within this State,
4    directly or by a subsidiary, an office, distribution house,
5    sales house, warehouse or other place of business, or any
6    agent or other representative operating within this State
7    under the authority of the retailer or its subsidiary,
8    irrespective of whether such place of business or agent or
9    other representative is located here permanently or
10    temporarily, or whether such retailer or subsidiary is
11    licensed to do business in this State. However, the
12    ownership of property that is located at the premises of a
13    printer with which the retailer has contracted for printing
14    and that consists of the final printed product, property
15    that becomes a part of the final printed product, or copy
16    from which the printed product is produced shall not result
17    in the retailer being deemed to have or maintain an office,
18    distribution house, sales house, warehouse, or other place
19    of business within this State.
20        (1.1) (Blank).
21        (1.2) (Blank).
22        (2) (Blank).
23        (3) (Blank).
24        (4) (Blank).
25        (5) (Blank).
26        (6) (Blank).

 

 

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1        (7) (Blank).
2        (8) (Blank).
3        (9) Beginning October 1, 2018 through June 30, 2020, a
4    retailer making sales of tangible personal property to
5    purchasers in Illinois from outside of Illinois if:
6            (A) the cumulative gross receipts from sales of
7        tangible personal property to purchasers in Illinois
8        are $100,000 or more; or
9            (B) the retailer enters into 200 or more separate
10        transactions for the sale of tangible personal
11        property to purchasers in Illinois.
12        The retailer shall determine on a quarterly basis,
13    ending on the last day of March, June, September, and
14    December, whether he or she meets the criteria of either
15    subparagraph (A) or (B) of this paragraph (9) for the
16    preceding 12-month period. If the retailer meets the
17    criteria of either subparagraph (A) or (B) for a 12-month
18    period, he or she is considered a retailer maintaining a
19    place of business in this State and is required to collect
20    and remit the tax imposed under this Act and file returns
21    for one year. At the end of that one-year period, the
22    retailer shall determine whether the retailer met the
23    criteria of either subparagraph (A) or (B) during the
24    preceding 12-month period. If the retailer met the criteria
25    in either subparagraph (A) or (B) for the preceding
26    12-month period, he or she is considered a retailer

 

 

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1    maintaining a place of business in this State and is
2    required to collect and remit the tax imposed under this
3    Act and file returns for the subsequent year. If at the end
4    of a one-year period a retailer that was required to
5    collect and remit the tax imposed under this Act determines
6    that he or she did not meet the criteria in either
7    subparagraph (A) or (B) during the preceding 12-month
8    period, the retailer shall subsequently determine on a
9    quarterly basis, ending on the last day of March, June,
10    September, and December, whether he or she meets the
11    criteria of either subparagraph (A) or (B) for the
12    preceding 12-month period.
13        Beginning January 1, 2020, neither the gross receipts
14    from nor the number of separate transactions for sales of
15    tangible personal property to purchasers in Illinois that a
16    retailer makes through a marketplace facilitator and for
17    which the retailer has received a certification from the
18    marketplace facilitator pursuant to Section 2d of this Act
19    shall be included for purposes of determining whether he or
20    she has met the thresholds of this paragraph (9).
21        (10) Beginning January 1, 2020, a marketplace
22    facilitator, as defined in Section 2d of this Act.
23    "Bulk vending machine" means a vending machine, containing
24unsorted confections, nuts, toys, or other items designed
25primarily to be used or played with by children which, when a
26coin or coins of a denomination not larger than $0.50 are

 

 

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1inserted, are dispensed in equal portions, at random and
2without selection by the customer.
3(Source: P.A. 100-587, eff. 6-4-18; 101-9, eff. 6-5-19; 101-31,
4eff. 1-1-20; revised 7-11-19.)
 
5    Section 10. The Retailers' Occupation Tax Act is amended by
6changing Section 1 as follows:
 
7    (35 ILCS 120/1)  (from Ch. 120, par. 440)
8    Sec. 1. Definitions. "Sale at retail" means any transfer of
9the ownership of or title to tangible personal property to a
10purchaser, for the purpose of use or consumption, and not for
11the purpose of resale in any form as tangible personal property
12to the extent not first subjected to a use for which it was
13purchased, for a valuable consideration: Provided that the
14property purchased is deemed to be purchased for the purpose of
15resale, despite first being used, to the extent to which it is
16resold as an ingredient of an intentionally produced product or
17byproduct of manufacturing. For this purpose, slag produced as
18an incident to manufacturing pig iron or steel and sold is
19considered to be an intentionally produced byproduct of
20manufacturing. Transactions whereby the possession of the
21property is transferred but the seller retains the title as
22security for payment of the selling price shall be deemed to be
23sales.
24    "Sale at retail" shall be construed to include any transfer

 

 

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1of the ownership of or title to tangible personal property to a
2purchaser, for use or consumption by any other person to whom
3such purchaser may transfer the tangible personal property
4without a valuable consideration, and to include any transfer,
5whether made for or without a valuable consideration, for
6resale in any form as tangible personal property unless made in
7compliance with Section 2c of this Act.
8    Sales of tangible personal property, which property, to the
9extent not first subjected to a use for which it was purchased,
10as an ingredient or constituent, goes into and forms a part of
11tangible personal property subsequently the subject of a "Sale
12at retail", are not sales at retail as defined in this Act:
13Provided that the property purchased is deemed to be purchased
14for the purpose of resale, despite first being used, to the
15extent to which it is resold as an ingredient of an
16intentionally produced product or byproduct of manufacturing.
17    "Sale at retail" shall be construed to include any Illinois
18florist's sales transaction in which the purchase order is
19received in Illinois by a florist and the sale is for use or
20consumption, but the Illinois florist has a florist in another
21state deliver the property to the purchaser or the purchaser's
22donee in such other state.
23    Nonreusable tangible personal property that is used by
24persons engaged in the business of operating a restaurant,
25cafeteria, or drive-in is a sale for resale when it is
26transferred to customers in the ordinary course of business as

 

 

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1part of the sale of food or beverages and is used to deliver,
2package, or consume food or beverages, regardless of where
3consumption of the food or beverages occurs. Examples of those
4items include, but are not limited to nonreusable, paper and
5plastic cups, plates, baskets, boxes, sleeves, buckets or other
6containers, utensils, straws, placemats, napkins, doggie bags,
7and wrapping or packaging materials that are transferred to
8customers as part of the sale of food or beverages in the
9ordinary course of business.
10    The purchase, employment and transfer of such tangible
11personal property as newsprint and ink for the primary purpose
12of conveying news (with or without other information) is not a
13purchase, use or sale of tangible personal property.
14    A person whose activities are organized and conducted
15primarily as a not-for-profit service enterprise, and who
16engages in selling tangible personal property at retail
17(whether to the public or merely to members and their guests)
18is engaged in the business of selling tangible personal
19property at retail with respect to such transactions, excepting
20only a person organized and operated exclusively for
21charitable, religious or educational purposes either (1), to
22the extent of sales by such person to its members, students,
23patients or inmates of tangible personal property to be used
24primarily for the purposes of such person, or (2), to the
25extent of sales by such person of tangible personal property
26which is not sold or offered for sale by persons organized for

 

 

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1profit. The selling of school books and school supplies by
2schools at retail to students is not "primarily for the
3purposes of" the school which does such selling. The provisions
4of this paragraph shall not apply to nor subject to taxation
5occasional dinners, socials or similar activities of a person
6organized and operated exclusively for charitable, religious
7or educational purposes, whether or not such activities are
8open to the public.
9    A person who is the recipient of a grant or contract under
10Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
11serves meals to participants in the federal Nutrition Program
12for the Elderly in return for contributions established in
13amount by the individual participant pursuant to a schedule of
14suggested fees as provided for in the federal Act is not
15engaged in the business of selling tangible personal property
16at retail with respect to such transactions.
17    "Purchaser" means anyone who, through a sale at retail,
18acquires the ownership of or title to tangible personal
19property for a valuable consideration.
20    "Reseller of motor fuel" means any person engaged in the
21business of selling or delivering or transferring title of
22motor fuel to another person other than for use or consumption.
23No person shall act as a reseller of motor fuel within this
24State without first being registered as a reseller pursuant to
25Section 2c or a retailer pursuant to Section 2a.
26    "Selling price" or the "amount of sale" means the

 

 

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1consideration for a sale valued in money whether received in
2money or otherwise, including cash, credits, property, other
3than as hereinafter provided, and services, but, prior to
4January 1, 2020, not including the value of or credit given for
5traded-in tangible personal property where the item that is
6traded-in is of like kind and character as that which is being
7sold; beginning January 1, 2020, "selling price" includes the
8portion of the value of or credit given for traded-in motor
9vehicles of the First Division as defined in Section 1-146 of
10the Illinois Vehicle Code of like kind and character as that
11which is being sold that exceeds $10,000. "Selling price" shall
12be determined without any deduction on account of the cost of
13the property sold, the cost of materials used, labor or service
14cost or any other expense whatsoever, but does not include
15charges that are added to prices by sellers on account of the
16seller's tax liability under this Act, or on account of the
17seller's duty to collect, from the purchaser, the tax that is
18imposed by the Use Tax Act, or, except as otherwise provided
19with respect to any cigarette tax imposed by a home rule unit,
20on account of the seller's tax liability under any local
21occupation tax administered by the Department, or, except as
22otherwise provided with respect to any cigarette tax imposed by
23a home rule unit on account of the seller's duty to collect,
24from the purchasers, the tax that is imposed under any local
25use tax administered by the Department. Effective December 1,
261985, "selling price" shall include charges that are added to

 

 

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1prices by sellers on account of the seller's tax liability
2under the Cigarette Tax Act, on account of the sellers' duty to
3collect, from the purchaser, the tax imposed under the
4Cigarette Use Tax Act, and on account of the seller's duty to
5collect, from the purchaser, any cigarette tax imposed by a
6home rule unit.
7    Notwithstanding any law to the contrary, for any motor
8vehicle, as defined in Section 1-146 of the Vehicle Code, that
9is sold on or after January 1, 2015 for the purpose of leasing
10the vehicle for a defined period that is longer than one year
11and (1) is a motor vehicle of the second division that: (A) is
12a self-contained motor vehicle designed or permanently
13converted to provide living quarters for recreational,
14camping, or travel use, with direct walk through access to the
15living quarters from the driver's seat; (B) is of the van
16configuration designed for the transportation of not less than
177 nor more than 16 passengers; or (C) has a gross vehicle
18weight rating of 8,000 pounds or less or (2) is a motor vehicle
19of the first division, "selling price" or "amount of sale"
20means the consideration received by the lessor pursuant to the
21lease contract, including amounts due at lease signing and all
22monthly or other regular payments charged over the term of the
23lease. Also included in the selling price is any amount
24received by the lessor from the lessee for the leased vehicle
25that is not calculated at the time the lease is executed,
26including, but not limited to, excess mileage charges and

 

 

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1charges for excess wear and tear. For sales that occur in
2Illinois, with respect to any amount received by the lessor
3from the lessee for the leased vehicle that is not calculated
4at the time the lease is executed, the lessor who purchased the
5motor vehicle does not incur the tax imposed by the Use Tax Act
6on those amounts, and the retailer who makes the retail sale of
7the motor vehicle to the lessor is not required to collect the
8tax imposed by the Use Tax Act or to pay the tax imposed by this
9Act on those amounts. However, the lessor who purchased the
10motor vehicle assumes the liability for reporting and paying
11the tax on those amounts directly to the Department in the same
12form (Illinois Retailers' Occupation Tax, and local retailers'
13occupation taxes, if applicable) in which the retailer would
14have reported and paid such tax if the retailer had accounted
15for the tax to the Department. For amounts received by the
16lessor from the lessee that are not calculated at the time the
17lease is executed, the lessor must file the return and pay the
18tax to the Department by the due date otherwise required by
19this Act for returns other than transaction returns. If the
20retailer is entitled under this Act to a discount for
21collecting and remitting the tax imposed under this Act to the
22Department with respect to the sale of the motor vehicle to the
23lessor, then the right to the discount provided in this Act
24shall be transferred to the lessor with respect to the tax paid
25by the lessor for any amount received by the lessor from the
26lessee for the leased vehicle that is not calculated at the

 

 

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1time the lease is executed; provided that the discount is only
2allowed if the return is timely filed and for amounts timely
3paid. The "selling price" of a motor vehicle that is sold on or
4after January 1, 2015 for the purpose of leasing for a defined
5period of longer than one year shall not be reduced by the
6value of or credit given for traded-in tangible personal
7property owned by the lessor, nor shall it be reduced by the
8value of or credit given for traded-in tangible personal
9property owned by the lessee, regardless of whether the
10trade-in value thereof is assigned by the lessee to the lessor.
11In the case of a motor vehicle that is sold for the purpose of
12leasing for a defined period of longer than one year, the sale
13occurs at the time of the delivery of the vehicle, regardless
14of the due date of any lease payments. A lessor who incurs a
15Retailers' Occupation Tax liability on the sale of a motor
16vehicle coming off lease may not take a credit against that
17liability for the Use Tax the lessor paid upon the purchase of
18the motor vehicle (or for any tax the lessor paid with respect
19to any amount received by the lessor from the lessee for the
20leased vehicle that was not calculated at the time the lease
21was executed) if the selling price of the motor vehicle at the
22time of purchase was calculated using the definition of
23"selling price" as defined in this paragraph. Notwithstanding
24any other provision of this Act to the contrary, lessors shall
25file all returns and make all payments required under this
26paragraph to the Department by electronic means in the manner

 

 

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1and form as required by the Department. This paragraph does not
2apply to leases of motor vehicles for which, at the time the
3lease is entered into, the term of the lease is not a defined
4period, including leases with a defined initial period with the
5option to continue the lease on a month-to-month or other basis
6beyond the initial defined period.
7    The phrase "like kind and character" shall be liberally
8construed (including but not limited to any form of motor
9vehicle for any form of motor vehicle, or any kind of farm or
10agricultural implement for any other kind of farm or
11agricultural implement), while not including a kind of item
12which, if sold at retail by that retailer, would be exempt from
13retailers' occupation tax and use tax as an isolated or
14occasional sale.
15    "Gross receipts" from the sales of tangible personal
16property at retail means the total selling price or the amount
17of such sales, as hereinbefore defined. In the case of charge
18and time sales, the amount thereof shall be included only as
19and when payments are received by the seller. Receipts or other
20consideration derived by a seller from the sale, transfer or
21assignment of accounts receivable to a wholly owned subsidiary
22will not be deemed payments prior to the time the purchaser
23makes payment on such accounts.
24    "Department" means the Department of Revenue.
25    "Person" means any natural individual, firm, partnership,
26association, joint stock company, joint adventure, public or

 

 

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1private corporation, limited liability company, or a receiver,
2executor, trustee, guardian or other representative appointed
3by order of any court.
4    The isolated or occasional sale of tangible personal
5property at retail by a person who does not hold himself out as
6being engaged (or who does not habitually engage) in selling
7such tangible personal property at retail, or a sale through a
8bulk vending machine, does not constitute engaging in a
9business of selling such tangible personal property at retail
10within the meaning of this Act; provided that any person who is
11engaged in a business which is not subject to the tax imposed
12by this Act because of involving the sale of or a contract to
13sell real estate or a construction contract to improve real
14estate or a construction contract to engineer, install, and
15maintain an integrated system of products, but who, in the
16course of conducting such business, transfers tangible
17personal property to users or consumers in the finished form in
18which it was purchased, and which does not become real estate
19or was not engineered and installed, under any provision of a
20construction contract or real estate sale or real estate sales
21agreement entered into with some other person arising out of or
22because of such nontaxable business, is engaged in the business
23of selling tangible personal property at retail to the extent
24of the value of the tangible personal property so transferred.
25If, in such a transaction, a separate charge is made for the
26tangible personal property so transferred, the value of such

 

 

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1property, for the purpose of this Act, shall be the amount so
2separately charged, but not less than the cost of such property
3to the transferor; if no separate charge is made, the value of
4such property, for the purposes of this Act, is the cost to the
5transferor of such tangible personal property. Construction
6contracts for the improvement of real estate consisting of
7engineering, installation, and maintenance of voice, data,
8video, security, and all telecommunication systems do not
9constitute engaging in a business of selling tangible personal
10property at retail within the meaning of this Act if they are
11sold at one specified contract price.
12    A person who holds himself or herself out as being engaged
13(or who habitually engages) in selling tangible personal
14property at retail is a person engaged in the business of
15selling tangible personal property at retail hereunder with
16respect to such sales (and not primarily in a service
17occupation) notwithstanding the fact that such person designs
18and produces such tangible personal property on special order
19for the purchaser and in such a way as to render the property
20of value only to such purchaser, if such tangible personal
21property so produced on special order serves substantially the
22same function as stock or standard items of tangible personal
23property that are sold at retail.
24    Persons who engage in the business of transferring tangible
25personal property upon the redemption of trading stamps are
26engaged in the business of selling such property at retail and

 

 

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1shall be liable for and shall pay the tax imposed by this Act
2on the basis of the retail value of the property transferred
3upon redemption of such stamps.
4    "Bulk vending machine" means a vending machine, containing
5unsorted confections, nuts, toys, or other items designed
6primarily to be used or played with by children which, when a
7coin or coins of a denomination not larger than $0.50 are
8inserted, are dispensed in equal portions, at random and
9without selection by the customer.
10    "Remote retailer" means a retailer located outside of this
11State that does not maintain within this State, directly or by
12a subsidiary, an office, distribution house, sales house,
13warehouse or other place of business, or any agent or other
14representative operating within this State under the authority
15of the retailer or its subsidiary, irrespective of whether such
16place of business or agent is located here permanently or
17temporarily or whether such retailer or subsidiary is licensed
18to do business in this State.
19(Source: P.A. 101-31, eff. 6-28-19.)
 
20    Section 15. The Illinois Vehicle Code is amended by
21changing Section 3-1001 as follows:
 
22    (625 ILCS 5/3-1001)  (from Ch. 95 1/2, par. 3-1001)
23    Sec. 3-1001. A tax is hereby imposed on the privilege of
24using, in this State, any motor vehicle as defined in Section

 

 

HB3945- 27 -LRB101 15136 HLH 64276 b

11-146 of this Code acquired by gift, transfer, or purchase, and
2having a year model designation preceding the year of
3application for title by 5 or fewer years prior to October 1,
41985 and 10 or fewer years on and after October 1, 1985 and
5prior to January 1, 1988. On and after January 1, 1988, the tax
6shall apply to all motor vehicles without regard to model year.
7Except that the tax shall not apply
8        (i) if the use of the motor vehicle is otherwise taxed
9    under the Use Tax Act;
10        (ii) if the motor vehicle is bought and used by a
11    governmental agency or a society, association, foundation
12    or institution organized and operated exclusively for
13    charitable, religious or educational purposes;
14        (iii) if the use of the motor vehicle is not subject to
15    the Use Tax Act by reason of subsection (a), (b), (c), (d),
16    (e) or (f) of Section 3-55 of that Act dealing with the
17    prevention of actual or likely multistate taxation;
18        (iv) to implements of husbandry;
19        (v) when a junking certificate is issued pursuant to
20    Section 3-117(a) of this Code;
21        (vi) when a vehicle is subject to the replacement
22    vehicle tax imposed by Section 3-2001 of this Act;
23        (vii) when the transfer is a gift to a beneficiary in
24    the administration of an estate and the beneficiary is a
25    surviving spouse.
26    Prior to January 1, 1988, the rate of tax shall be 5% of

 

 

HB3945- 28 -LRB101 15136 HLH 64276 b

1the selling price for each purchase of a motor vehicle covered
2by Section 3-1001 of this Code. Except as hereinafter provided,
3beginning January 1, 1988 and through December 31, 2019, the
4rate of tax shall be as follows for transactions in which the
5selling price of the motor vehicle is less than $15,000:
6Number of Years Transpired AfterApplicable Tax
7Model Year of Motor Vehicle
81 or less$390
92290
103215
114165
125115
13690
14780
15865
16950
171040
18over 1025
19Except as hereinafter provided, beginning January 1, 1988 and
20through December 31, 2019, the rate of tax shall be as follows
21for transactions in which the selling price of the motor
22vehicle is $15,000 or more:
23Selling PriceApplicable Tax
24$15,000 - $19,999$ 750
25$20,000 - $24,999$1,000
26$25,000 - $29,999$1,250

 

 

HB3945- 29 -LRB101 15136 HLH 64276 b

1$30,000 and over$1,500
2    Except as hereinafter provided, beginning January 1, 2020,
3the rate of tax shall be as follows for transactions in which
4the selling price of the motor vehicle is less than $15,000:
5        (1) if one year or less has transpired after the model
6    year of the vehicle, then the applicable tax is $465;
7        (2) if 2 years have transpired after the model year of
8    the motor vehicle, then the applicable tax is $365;
9        (3) if 3 years have transpired after the model year of
10    the motor vehicle, then the applicable tax is $290;
11        (4) if 4 years have transpired after the model year of
12    the motor vehicle, then the applicable tax is $240;
13        (5) if 5 years have transpired after the model year of
14    the motor vehicle, then the applicable tax is $190;
15        (6) if 6 years have transpired after the model year of
16    the motor vehicle, then the applicable tax is $165;
17        (7) if 7 years have transpired after the model year of
18    the motor vehicle, then the applicable tax is $155;
19        (8) if 8 years have transpired after the model year of
20    the motor vehicle, then the applicable tax is $140;
21        (9) if 9 years have transpired after the model year of
22    the motor vehicle, then the applicable tax is $125;
23        (10) if 10 years have transpired after the model year
24    of the motor vehicle, then the applicable tax is $115; and
25        (11) if more than 10 years have transpired after the
26    model year of the motor vehicle, then the applicable tax is

 

 

HB3945- 30 -LRB101 15136 HLH 64276 b

1    $100.
2    Except as hereinafter provided, beginning January 1, 2020,
3the rate of tax shall be as follows for transactions in which
4the selling price of the motor vehicle is $15,000 or more:
5        (1) if the selling price is $15,000 or more, but less
6    than $20,000, then the applicable tax shall be $850;
7        (2) if the selling price is $20,000 or more, but less
8    than $25,000, then the applicable tax shall be $1,100;
9        (3) if the selling price is $25,000 or more, but less
10    than $30,000, then the applicable tax shall be $1,350;
11        (4) if the selling price is $30,000 or more, but less
12    than $50,000, then the applicable tax shall be $1,600;
13        (5) if the selling price is $50,000 or more, but less
14    than $100,000, then the applicable tax shall be $2,600;
15        (6) if the selling price is $100,000 or more, but less
16    than $1,000,000, then the applicable tax shall be $5,100;
17    and
18        (7) if the selling price is $1,000,000 or more, then
19    the applicable tax shall be $10,100.
20For the following transactions, the tax rate shall be $15 for
21each motor vehicle acquired in such transaction:
22        (i) when the transferee or purchaser is the spouse,
23    mother, father, brother, sister or child of the transferor;
24        (ii) when the transfer is a gift to a beneficiary in
25    the administration of an estate and the beneficiary is not
26    a surviving spouse;

 

 

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1        (iii) when a motor vehicle which has once been
2    subjected to the Illinois retailers' occupation tax or use
3    tax is transferred in connection with the organization,
4    reorganization, dissolution or partial liquidation of an
5    incorporated or unincorporated business wherein the
6    beneficial ownership is not changed.
7    A claim that the transaction is taxable under subparagraph
8(i) shall be supported by such proof of family relationship as
9provided by rules of the Department.
10    Until January 1, 2020, for For a transaction in which a
11motorcycle, motor driven cycle or moped is acquired the tax
12rate shall be $25. For a transaction on or after January 1,
132020, the tax rate for motorcycles, motor driven cycles, and
14mopeds shall be the same as for all other motor vehicles.
15    On and after October 1, 1985, 1/12 of $5,000,000 of the
16moneys received by the Department of Revenue pursuant to this
17Section shall be paid each month into the Build Illinois Fund
18and the remainder into the General Revenue Fund.
19    The tax imposed by this Section shall be abated and no
20longer imposed when the amount deposited to secure the bonds
21issued pursuant to the Build Illinois Bond Act is sufficient to
22provide for the payment of the principal of, and interest and
23premium, if any, on the bonds, as certified to the State
24Comptroller and the Director of Revenue by the Director of the
25Governor's Office of Management and Budget.
26(Source: P.A. 96-554, eff. 1-1-10.)
 

 

 

HB3945- 32 -LRB101 15136 HLH 64276 b

1    Section 99. Effective date. This Act takes effect upon
2becoming law.