SB2351 103RD GENERAL ASSEMBLY

LRB103 28233 DTM 54612 b

103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB2351

Introduced 2/10/2023, by Sen. Rachel Ventura

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.

A BILL FOR

AN ACT concerning revenue.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Financial Transaction Tax Act.

Section 3. Definitions. As used in this Act:

"Department" means the Department of Revenue.

"Financial transaction" means a transaction involving the purchase or sale of a stock contract, futures contract, futures options 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.

Section 5. Tax imposed; definitions.

(a) Beginning January 1, 2024, a tax is imposed 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. The tax is imposed at a rate of $1 for each transaction for which the underlying asset is an agricultural product, a financial instruments contract, or an options contract. The tax shall be paid by the trading facility or, in any other case, by the purchaser involved in the transaction. All transactions executed via open outcry that are physically filled on the exchange floor are exempt from the tax.

(b) The tax shall be collected by the exchange or board of trade and shall be remitted to the Department of Revenue biannually in the form and manner required by the Department. The exchange or board of trade may retain 5% of the amount collected, which is allowed to reimburse the exchange or board of trade for the expenses incurred in keeping records, preparing and filing returns, remitting the tax, and supplying data to the Department on request.

(c) Subject to the provisions of subsection (b), the tax imposed under this Act, and all civil penalties that may be assessed as an incident thereof, shall be administered, collected, and enforced by the Department of Revenue, and commodity brokers shall register with the Department in the same manner as required under the Retailers' Occupation Tax Act insofar as may be applicable. The Department of Revenue has full power to administer and enforce this Act, to collect all taxes and penalties due under this Act, to dispose of taxes and penalties so collected as provided in this Act, and to determine all rights to credit memoranda arising on account of the erroneous payment of a tax or penalty under this Act. The Department of Revenue shall pay over to the State Treasurer all moneys remitted to the Department under this Act for deposit into the General Revenue Fund.

Section 10. Recordkeeping. Each exchange or board of trade that is subject to the tax under this Act shall keep records and books of all transactions giving rise to a tax under this Act. Those books and records shall be kept in the English language and shall, at all times during business hours of the day, be subject to inspection by the Department or its duly authorized agents and employees.

Section 15. Retailers' Occupation Tax Act and Uniform Penalty and Interest Act adopted. The provisions of Sections 4, 5, 5f, 5i, 6, 6a, 6b, 6c, 8, 9, 10, and 12 of the Retailers' Occupation Tax Act which are not inconsistent with this Act, and Section 3-7 of the Uniform Penalty and Interest Act, shall apply as far as practicable to the subject matter of this Act to the same extent as if those provisions were included in this Act.

Section 20. Rules. The Department shall adopt administrative rules to implement and administer this Act. Initial rules may be adopted as emergency rules.

Section 25. Interstate commerce exemption. No tax is imposed under this Act upon the privilege of engaging in a business in interstate commerce or otherwise when the business may not, under the Constitution and statutes of the United States, be made the subject of taxation by this State.

Section 900. The Illinois Administrative Procedure Act is amended by adding Section 5-45.35 as follows:

(5 ILCS 100/5-45.35 new)

Sec. 5-45.35. Emergency rulemaking.To provide for the expeditious and timely implementation of the Financial Transaction Tax Act, emergency rules implementing the Financial Transaction Tax Act may be adopted in accordance with Section 5-45 by the Department of Revenue. The adoption of emergency rules authorized by Section 5-45 and this Section is deemed to be necessary for the public interest,safety, and welfare. This Section is repealed one year after the effective date of this amendatory Act of the 103rd General Assembly.

Section 999. Effective date. This Act takes effect January 1, 2024.