Illinois General Assembly - Full Text of SB1970
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Full Text of SB1970  100th General Assembly

SB1970 100TH GENERAL ASSEMBLY

  
  

 


 
100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB1970

 

Introduced 2/10/2017, by Sen. Omar Aquino

 

SYNOPSIS AS INTRODUCED:
 
New Act

    Creates the Financial Transaction Tax Act. Imposes a tax on the privilege of engaging in a financial transaction that occurs, is effectuated, consummated, executed, or cleared at a facility located in the State. Provides that the tax is imposed at a rate of $1 per contract for all transactions for which the underlying asset is an agricultural product and $2 per contract for all other contracts. Effective immediately.


LRB100 10729 HLH 20959 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB1970LRB100 10729 HLH 20959 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 1. Short title. This Act may be cited as the
5Financial Transaction Tax Act.
 
6    Section 5. Tax imposed; definitions.
7    (a) Beginning September 1, 2017, a tax is imposed on the
8privilege of engaging in a financial transaction that occurs,
9is effectuated, consummated, executed, or cleared at a facility
10located in the State of Illinois. The tax is imposed at a rate
11of $1 per contract for all transactions for which the
12underlying asset is an agricultural product and $2 per contract
13for all other contracts. The tax shall be paid by both the
14seller of each such contract and the purchaser of each such
15contract.
16    (b) A tax imposed under this Act, and all civil penalties
17that may be assessed as an incident thereof, shall be
18administered, collected, and enforced by the Department of
19Revenue, in the same manner as required under the Retailers'
20Occupation Tax Act insofar as may be applicable. The Department
21of Revenue has full power to administer and enforce this Act,
22to collect all taxes and penalties due under this Act, to
23dispose of taxes and penalties so collected as provided in this

 

 

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1Act, and to determine all rights to credit memoranda arising on
2account of the erroneous payment of tax or under this Act. The
3Department of Revenue shall pay over to the State Treasurer all
4taxes and penalties collected under this Act for deposit into
5the General Revenue Fund.
6    (c) For the purpose of this Act, "financial transaction"
7means a transaction involving the purchase or sale of:
8        (1) a "futures contract", defined as a contractual
9    agreement to buy or sell a particular commodity or
10    financial instrument at a pre-determined price in the
11    future;
12        (2) a "swap contract", defined as a contractual
13    agreement to exchange the cash flows of one party's
14    financial instrument for those of the other party's
15    financial instrument;
16        (3) a "credit default swap", defined as a swap designed
17    to transfer the credit exposure of fixed income products
18    between parties, including credit derivative contracts,
19    where the purchaser of the swap makes payments up until the
20    maturity date of a contract, and the seller agrees to pay
21    off a third-party debt if this party defaults on the loan;
22        (4) an "options contract", defined as a contract that
23    allows the holder to buy or sell an underlying security or
24    other financial instrument at a given price, including
25    options on futures contracts and stock index options, but
26    excluding options on individual stocks;

 

 

SB1970- 3 -LRB100 10729 HLH 20959 b

1        (5) an "option on a futures contract", or "futures
2    option contract", defined as a contract that gives the
3    holder the right to enter into a specified futures
4    contract;
5        (6) a "stock index option", defined as a contract that
6    gives the holder the right, but not the obligation, to buy
7    or sell a basket of stocks at an agreed-upon price and
8    before a certain date; and
9        (7) any other "derivatives", defined as a security or
10    financial instrument the price which is dependent upon or
11    derived from one or more underlying assets, that is not
12    otherwise exempted by this Act.
13    (d) For the purpose of this Act, "financial transaction"
14does not include a transaction involving securities held in a
15retirement account or a transaction involving a mutual fund. An
16exchange of securities or financial instruments identified in
17this Section shall be treated as a purchase of the securities
18or financial instruments received by each party to the
19exchange.
 
20    Section 10. Rules. The Department shall adopt
21administrative rules to implement and administer this Act.
22Initial rules may be adopted as emergency rules.
 
23    Section 99. Effective date. This Act takes effect upon
24becoming law.