Full Text of SB1970 100th General Assembly
SB1970 100TH GENERAL ASSEMBLY
100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
Introduced 2/10/2017, by Sen. Omar Aquino
SYNOPSIS AS INTRODUCED:
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.
|FISCAL NOTE ACT MAY APPLY|
A BILL FOR
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AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
This Act may be cited as the
Financial Transaction Tax Act.
Tax imposed; definitions.
(a) Beginning September 1, 2017, a tax is imposed on the
privilege of engaging in a financial transaction that occurs,
is effectuated, consummated, executed, or cleared at a facility
located in the State of Illinois. 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. The tax shall be paid by both the
seller of each such contract and the purchaser of each such
(b) A 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, 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
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Act, and to determine all rights to credit memoranda arising on
account of the erroneous payment of tax or under this Act. The
Department of Revenue shall pay over to the State Treasurer all
taxes and penalties collected under this Act for deposit into
the General Revenue Fund.
(c) For the purpose of this Act, "financial transaction"
means a transaction involving the purchase or sale of:
(1) a "futures contract", defined as a contractual
agreement to buy or sell a particular commodity or
financial instrument at a pre-determined price in the
(2) a "swap contract", defined as a contractual
agreement to exchange the cash flows of one party's
financial instrument for those of the other party's
(3) a "credit default swap", defined as a swap designed
to transfer the credit exposure of fixed income products
between parties, including credit derivative contracts,
where the purchaser of the swap makes payments up until the
maturity date of a contract, and the seller agrees to pay
off a third-party debt if this party defaults on the loan;
(4) an "options contract", defined as a contract that
allows the holder to buy or sell an underlying security or
other financial instrument at a given price, including
options on futures contracts and stock index options, but
excluding options on individual stocks;
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(5) an "option on a futures contract", or "futures
option contract", defined as a contract that gives the
holder the right to enter into a specified futures
(6) a "stock index option", defined as a contract that
gives the holder the right, but not the obligation, to buy
or sell a basket of stocks at an agreed-upon price and
before a certain date; and
(7) any other "derivatives", defined as a security or
financial instrument the price which is dependent upon or
derived from one or more underlying assets, that is not
otherwise exempted by this Act.
(d) For the purpose of this Act, "financial transaction"
does not include a transaction involving securities held in a
retirement account or a transaction involving a mutual fund. An
exchange of securities or financial instruments identified in
this Section shall be treated as a purchase of the securities
or financial instruments received by each party to the
The Department shall adopt
administrative rules to implement and administer this Act.
Initial rules may be adopted as emergency rules.
This Act takes effect upon