Full Text of SB3282 103rd General Assembly
SB3282enr 103RD GENERAL ASSEMBLY | | | SB3282 Enrolled | | LRB103 34197 HLH 64020 b |
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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 Retailers' Occupation Tax Act is amended by | 5 | | changing Section 2-10.5 as follows: | 6 | | (35 ILCS 120/2-10.5) | 7 | | Sec. 2-10.5. Direct payment program; purchaser's providing | 8 | | of permit to retailer; retailer relieved of collecting use tax | 9 | | and local retailers' occupation tax reimbursements from | 10 | | purchaser; direct payment of retailers' occupation tax and | 11 | | local retailers' occupation tax by purchaser. | 12 | | (a) Beginning on July 1, 2001 there is established in this | 13 | | State a Direct Payment Program to be administered by the | 14 | | Department. The Department shall issue a Direct Pay Permit to | 15 | | applicants who have been approved to participate in the Direct | 16 | | Payment Program. Each person applying to participate in the | 17 | | Direct Payment Program must demonstrate (1) the applicant's | 18 | | ability to comply with the retailers' occupation tax laws and | 19 | | the use tax laws in effect in this State and that the | 20 | | applicant's accounting system will reflect the proper amount | 21 | | of tax due, (2) that the applicant has a valid business purpose | 22 | | for participating in the Direct Payment Program, and (3) how | 23 | | the applicant's participation in the Direct Payment Program |
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| 1 | | will benefit tax compliance. Application shall be made on | 2 | | forms provided by the Department and shall contain information | 3 | | as the Department may reasonably require. The Department shall | 4 | | approve or deny an applicant within 90 days after the | 5 | | Department's receipt of the application, unless the Department | 6 | | makes a written request for additional information from the | 7 | | applicant. | 8 | | (b) A person who has been approved for the Direct Payment | 9 | | Program and who has been issued a Direct Pay Permit by the | 10 | | Department is relieved of paying tax to a retailer when | 11 | | purchasing tangible personal property for use or consumption, | 12 | | except as provided in subsection (d), by providing that | 13 | | retailer a copy of that Direct Pay Permit. A retailer who | 14 | | accepts a copy of a customer's Direct Pay Permit is relieved of | 15 | | the obligation to remit the tax imposed by this Act on the | 16 | | transaction. References in this Section to "the tax imposed by | 17 | | this Act" include any local occupation taxes administered by | 18 | | the Department that would be incurred on the retail sale. | 19 | | (c) Once the holder of a Direct Pay Permit uses that Permit | 20 | | to relieve the Permit holder from paying tax to a particular | 21 | | retailer, the holder must use its Permit for all purchases, | 22 | | except as provided in subsection (d), from that retailer for | 23 | | so long as the Permit is valid. | 24 | | (d) Direct Pay Permits are not valid and shall not be used | 25 | | for sales or purchases of: | 26 | | (1) food or beverage; |
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| 1 | | (2) tangible personal property required to be titled | 2 | | or registered with an agency of government; or | 3 | | (3) any transactions subject to the Service Occupation | 4 | | Tax Act or Service Use Tax Act. | 5 | | (e) Direct Pay Permits are not assignable and are not | 6 | | transferable. As an illustration, a construction contractor | 7 | | shall not make purchases using a customer's Direct Pay Permit. | 8 | | (f) A Direct Pay Permit is valid until it is revoked by the | 9 | | Department or until the holder notifies the Department in | 10 | | writing that the holder is withdrawing from the Direct Payment | 11 | | Program. A Direct Pay Permit can be revoked by the Department, | 12 | | after notice and hearing, if the holder violates any provision | 13 | | of this Act, any provision of the Illinois Use Tax Act, or any | 14 | | provision of any Act imposing a local retailers' occupation | 15 | | tax administered by the Department. | 16 | | (g) The holder of a Direct Pay Permit who has been relieved | 17 | | of paying tax to a retailer on a purchase for use or | 18 | | consumption by representing to that retailer that it would pay | 19 | | all applicable taxes directly to the Department shall pay | 20 | | those taxes to the Department not later than the 20th day of | 21 | | the month following the month in which the purchase was made. | 22 | | Permit holders making such purchases are subject to all | 23 | | provisions of this Act, and the tax must be reported and paid | 24 | | as retailers' occupation tax in the same manner that the | 25 | | retailer from whom the purchases were made would have reported | 26 | | and paid it, including any local retailers' occupation taxes |
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| 1 | | applicable to that retail sale. Notwithstanding any other | 2 | | provision of this Act, Permit holders shall make all payments | 3 | | to the Department through the use of electronic funds | 4 | | transfer. | 5 | | (h) By March 31, 2025, and by March 31 of each year | 6 | | thereafter, each holder of a Direct Pay Permit shall review | 7 | | its purchase activity to verify that the purchases made during | 8 | | the 12-month period ending on December 31 of the immediately | 9 | | preceding calendar year were sourced correctly and that the | 10 | | correct tax rate was applied. If the holder of the Direct Pay | 11 | | Permit discovers an error in sourcing or the tax rate during | 12 | | the review process, then, by April 20 of the calendar year in | 13 | | which the review under this subsection occurs, the holder of | 14 | | the Direct Pay Permit shall file an amended return to correct | 15 | | the error. If, for any 12-month review period under this | 16 | | subsection, a holder of a Direct Pay Permit fails to properly | 17 | | verify purchase activity and correct sourcing and tax rate | 18 | | errors as required by this subsection and the rules adopted by | 19 | | the Department, then the Direct Pay Permit holder is liable to | 20 | | pay a penalty of $6,000 to the Department, for deposit into the | 21 | | Tax Compliance and Administration Fund. However, the penalty | 22 | | under this subsection shall not be imposed if the Department | 23 | | finds that at least 95% of the Direct Pay Permit holder's | 24 | | transactions for the applicable 12-month review period are | 25 | | correctly sourced and the correct taxes have been remitted or | 26 | | the permit holder acted with ordinary business care and |
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| 1 | | prudence. For the purposes of this subsection, ordinary | 2 | | business care and prudence shall be determined in accordance | 3 | | with Section 3-8 of the Uniform Penalty and Interest Act. The | 4 | | Department may adopt rules to administer the penalties under | 5 | | this Section. | 6 | | (Source: P.A. 92-484, eff. 8-23-01.) | 7 | | Section 99. Effective date. This Act takes effect upon | 8 | | becoming law. |
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