HB5257eng 94TH GENERAL ASSEMBLY



 


 
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1     AN ACT concerning revenue.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Simplified Municipal Telecommunications Tax
5 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
25 within a municipality that has imposed a tax under this Section
26 and charges for the portion of the inter-office channels
27 provided within that municipality. Charges for that portion of
28 the inter-office channel connecting 2 or more channel
29 termination points, one or more of which is located within the
30 jurisdictional boundary of such municipality, shall be
31 determined by the retailer by multiplying an amount equal to
32 the total charge for the inter-office channel by a fraction,

 

 

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1 the numerator of which is the number of channel termination
2 points that are located within the jurisdictional boundary of
3 the municipality and the denominator of which is the total
4 number of channel termination points connected by the
5 inter-office channel. Prior to January 1, 2004, any method
6 consistent with this paragraph or other method that reasonably
7 apportions the total charges for inter-office channels among
8 the municipalities in which channel termination points are
9 located shall be accepted as a reasonable method to determine
10 the taxable portion of an inter-office channel provided within
11 a municipality for that period. However, "gross charge" shall
12 not include any of the following:
13         (1) Any amounts added to a purchaser's bill because of
14     a charge made pursuant to: (i) the tax imposed by this Act,
15     (ii) the tax imposed by the Telecommunications Excise Tax
16     Act, (iii) the tax imposed by Section 4251 of the Internal
17     Revenue Code, (iv) 911 surcharges, or (v) charges added to
18     customers' bills pursuant to the provisions of Section
19     9-221 or 9-222 of the Public Utilities Act, as amended, or
20     any similar charges added to customers' bills by retailers
21     who are not subject to rate regulation by the Illinois
22     Commerce Commission for the purpose of recovering any of
23     the tax liabilities or other amounts specified in those
24     provisions of the Public Utilities Act.
25         (2) Charges for a sent collect telecommunication
26     received outside of such municipality.
27         (3) Charges for leased time on equipment or charges for
28     the storage of data or information for subsequent retrieval
29     or the processing of data or information intended to change
30     its form or content. Such equipment includes, but is not
31     limited to, the use of calculators, computers, data
32     processing equipment, tabulating equipment or accounting
33     equipment and also includes the usage of computers under a
34     time-sharing agreement.
35         (4) Charges for customer equipment, including such
36     equipment that is leased or rented by the customer from any

 

 

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1     source, wherein such charges are disaggregated and
2     separately identified from other charges.
3         (5) Charges to business enterprises certified as
4     exempt under Section 9-222.1 of the Public Utilities Act to
5     the extent of such exemption and during the period of time
6     specified by the Department of Commerce and Economic
7     Opportunity Community Affairs.
8         (6) Charges for telecommunications and all services
9     and equipment provided in connection therewith between a
10     parent corporation and its wholly owned subsidiaries or
11     between wholly owned subsidiaries when the tax imposed
12     under this Act has already been paid to a retailer and only
13     to the extent that the charges between the parent
14     corporation and wholly owned subsidiaries or between
15     wholly owned subsidiaries represent expense allocation
16     between the corporations and not the generation of profit
17     for the corporation rendering such service.
18         (7) Bad debts ("bad debt" means any portion of a debt
19     that is related to a sale at retail for which gross charges
20     are not otherwise deductible or excludable that has become
21     worthless or uncollectible, as determined under applicable
22     federal income tax standards; if the portion of the debt
23     deemed to be bad is subsequently paid, the retailer shall
24     report and pay the tax on that portion during the reporting
25     period in which the payment is made).
26         (8) Charges paid by inserting coins in coin-operated
27     telecommunication devices.
28         (9) Amounts paid by telecommunications retailers under
29     the Telecommunications Infrastructure Maintenance Fee Act.
30         (10) Charges for nontaxable services or
31     telecommunications if (i) those charges are aggregated
32     with other charges for telecommunications that are
33     taxable, (ii) those charges are not separately stated on
34     the customer bill or invoice, and (iii) the retailer can
35     reasonably identify the nontaxable charges on the
36     retailer's books and records kept in the regular course of

 

 

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1     business. If the nontaxable charges cannot reasonably be
2     identified, the gross charge from the sale of both taxable
3     and nontaxable services or telecommunications billed on a
4     combined basis shall be attributed to the taxable services
5     or telecommunications. The burden of proving nontaxable
6     charges shall be on the retailer of the telecommunications.
7     "Interstate telecommunications" means all
8 telecommunications that either originate or terminate outside
9 this State.
10     "Intrastate telecommunications" means all
11 telecommunications that originate and terminate within this
12 State.
13     "Person" means any natural individual, firm, trust,
14 estate, partnership, association, joint stock company, joint
15 venture, corporation, limited liability company, or a
16 receiver, trustee, guardian, or other representative appointed
17 by order of any court, the Federal and State governments,
18 including State universities created by statute, or any city,
19 town, county, or other political subdivision of this State.
20     "Purchase at retail" means the acquisition, consumption or
21 use of telecommunications through a sale at retail.
22     "Retailer" means and includes every person engaged in the
23 business of making sales at retail as defined in this Section.
24 The Department may, in its discretion, upon application,
25 authorize the collection of the tax hereby imposed by any
26 retailer not maintaining a place of business within this State,
27 who, to the satisfaction of the Department, furnishes adequate
28 security to insure collection and payment of the tax. Such
29 retailer shall be issued, without charge, a permit to collect
30 such tax. When so authorized, it shall be the duty of such
31 retailer to collect the tax upon all of the gross charges for
32 telecommunications in this State in the same manner and subject
33 to the same requirements as a retailer maintaining a place of
34 business within this State. The permit may be revoked by the
35 Department at its discretion.
36     "Retailer maintaining a place of business in this State",

 

 

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1 or any like term, means and includes any retailer having or
2 maintaining within this State, directly or by a subsidiary, an
3 office, distribution facilities, transmission facilities,
4 sales office, warehouse or other place of business, or any
5 agent or other representative operating within this State under
6 the authority of the retailer or its subsidiary, irrespective
7 of whether such place of business or agent or other
8 representative is located here permanently or temporarily, or
9 whether such retailer or subsidiary is licensed to do business
10 in this State.
11     "Sale at retail" means the transmitting, supplying or
12 furnishing of telecommunications and all services and
13 equipment provided in connection therewith for a
14 consideration, to persons other than the Federal and State
15 governments, and State universities created by statute and
16 other than between a parent corporation and its wholly owned
17 subsidiaries or between wholly owned subsidiaries for their use
18 or consumption and not for resale.
19     "Service address" means the location of telecommunications
20 equipment from which telecommunications services are
21 originated or at which telecommunications services are
22 received by a taxpayer. In the event this may not be a defined
23 location, as in the case of mobile phones, paging systems, and
24 maritime systems, service address means the customer's place of
25 primary use as defined in the Mobile Telecommunications
26 Sourcing Conformity Act. For air-to-ground systems and the
27 like, "service address" shall mean the location of a taxpayer's
28 primary use of the telecommunications equipment as defined by
29 telephone number, authorization code, or location in Illinois
30 where bills are sent. "Service address" includes the 9-digit
31 enhanced United States postal zip code.
32     "Taxpayer" means a person who individually or through his
33 or her agents, employees, or permittees engages in the act or
34 privilege of originating or receiving telecommunications in a
35 municipality and who incurs a tax liability as authorized by
36 this Act.

 

 

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1     "Telecommunications", in addition to the meaning
2 ordinarily and popularly ascribed to it, includes, without
3 limitation, messages or information transmitted through use of
4 local, toll, and wide area telephone service, private line
5 services, channel services, telegraph services,
6 teletypewriter, computer exchange services, cellular mobile
7 telecommunications service, specialized mobile radio,
8 stationary two-way radio, paging service, or any other form of
9 mobile and portable one-way or two-way communications, or any
10 other transmission of messages or information by electronic or
11 similar means, between or among points by wire, cable, fiber
12 optics, laser, microwave, radio, satellite, or similar
13 facilities. As used in this Act, "private line" means a
14 dedicated non-traffic sensitive service for a single customer,
15 that entitles the customer to exclusive or priority use of a
16 communications channel or group of channels, from one or more
17 specified locations to one or more other specified locations.
18 The definition of "telecommunications" shall not include value
19 added services in which computer processing applications are
20 used to act on the form, content, code, and protocol of the
21 information for purposes other than transmission.
22 "Telecommunications" shall not include purchases of
23 telecommunications by a telecommunications service provider
24 for use as a component part of the service provided by such
25 provider to the ultimate retail consumer who originates or
26 terminates the taxable end-to-end communications. Carrier
27 access charges, right of access charges, charges for use of
28 inter-company facilities, and all telecommunications resold in
29 the subsequent provision of, used as a component of, or
30 integrated into, end-to-end telecommunications service shall
31 be non-taxable as sales for resale. Prepaid telephone calling
32 arrangements shall not be considered "telecommunications"
33 subject to the tax imposed under this Act. For purposes of this
34 Section, "prepaid telephone calling arrangements" means that
35 term as defined in Section 2-27 of the Retailers' Occupation
36 Tax Act.

 

 

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1 (Source: P.A. 92-526, eff. 7-1-02; 92-878, eff. 1-1-04; 93-286,
2 eff. 1-1-04; revised 12-6-03.)
 
3     Section 10. The Mobile Telecommunications Sourcing
4 Conformity Act is amended by changing Section 10 as follows:
 
5     (35 ILCS 638/10)
6     Sec. 10. Definitions. As used in this Act:
7     "Charges for mobile telecommunications services" means any
8 charge for, or associated with, the provision of commercial
9 mobile radio service, as defined in Section 20.3 of Title 47 of
10 the Code of Federal Regulations as in effect on June 1, 1999,
11 or any charge for, or associated with, a service provided as an
12 adjunct to a commercial mobile radio service, that is billed to
13 the customer by or for the customer's home service provider
14 regardless of whether individual transmissions originate or
15 terminate within the licensed service area of the home service
16 provider.
17     "Customer" means (i) the person or entity that contracts
18 with the home service provider for mobile telecommunications
19 services or (ii) if the end user of mobile telecommunications
20 services is not the contracting party, the end user of the
21 mobile telecommunications services, but this clause (ii)
22 applies only for the purpose of determining the place of
23 primary use. "Customer" does not include (i) a reseller of
24 mobile telecommunications service or (ii) a serving carrier
25 under an arrangement to serve the customer outside the home
26 service provider's licensed service area.
27     "Designated database provider" means a corporation,
28 association, or other entity representing all the political
29 subdivisions of a State that is:
30         (i) responsible for providing an electronic database
31     prescribed in Section 25 if the State has not provided such
32     electronic database; and
33         (ii) approved by municipal and county associations or
34     leagues of the State whose responsibility it would

 

 

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1     otherwise be to provide such database prescribed by
2     Sections 116 through 126 of Title 4 of the United States
3     Code.
4     "Enhanced zip code" means a United States postal zip code
5 of 9 or more digits.
6     "Home service provider" means the facilities-based carrier
7 or reseller with which the customer contracts for the provision
8 of mobile telecommunications services.
9     "Licensed service area" means the geographic area in which
10 the home service provider is authorized by law or contract to
11 provide commercial mobile radio service to the customer.
12     "Mobile telecommunications service" means commercial
13 mobile radio service, as defined in Section 20.3 of Title 47 of
14 the Code of Federal Regulations as in effect on June 1, 1999.
15     "Place of primary use" means the street address, including
16 the 9-digit enhanced United States postal zip code,
17 representative of where the customer's use of the mobile
18 telecommunications service primarily occurs, which must be:
19         (i) the residential street address or the primary
20     business street address of the customer; and
21         (ii) within the licensed service area of the home
22     service provider.
23     "Prepaid telephone calling services" means the right to
24 purchase exclusively telecommunications services that must be
25 paid for in advance that enables the origination of calls using
26 an access number, authorization code, or both, whether manually
27 or electronically dialed, if the remaining amount of units of
28 service that have been prepaid is known by the provider of the
29 prepaid service on a continuous basis.
30     "Reseller" means a provider who purchases
31 telecommunications services from another telecommunications
32 service provider and then resells, uses as a component part of,
33 or integrates the purchased services into a mobile
34 telecommunications service. "Reseller" does not include a
35 serving carrier with which a home service provider arranges for
36 the services to its customers outside the home service

 

 

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1 provider's licensed service area.
2     "Serving carrier" means a facilities-based carrier
3 providing mobile telecommunications service to a customer
4 outside a home service provider's or reseller's licensed
5 service area.
6     "Taxing jurisdiction" means any of the several states, the
7 District of Columbia, or any territory or possession of the
8 United States, any municipality, city, county, township,
9 parish, transportation district, or assessment jurisdiction,
10 or any other political subdivision within the territorial
11 limits of the United States with the authority to impose a tax,
12 charge, or fee.
13 (Source: P.A. 92-474, eff. 8-1-02.)
 
14     Section 99. Effective date. This Act takes effect upon
15 becoming law.