Full Text of HB5948 98th General Assembly
HB5948 98TH GENERAL ASSEMBLY |
| | 98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014 HB5948 Introduced , by Rep. Michael J. Zalewski SYNOPSIS AS INTRODUCED: |
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35 ILCS 105/3-85 |
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35 ILCS 110/3-70 |
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Amends the Use Tax Act and the Service Use Tax Act. Extends the Manufacturer's Purchase Credit until August 30, 2019 (now, August 30, 2014). Effective immediately.
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| | A BILL FOR |
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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 Use Tax Act is amended by changing Section | 5 | | 3-85 as follows:
| 6 | | (35 ILCS 105/3-85)
| 7 | | Sec. 3-85. Manufacturer's Purchase Credit. For purchases | 8 | | of machinery and
equipment made on and after January 1, 1995 | 9 | | through June 30, 2003, and on and after September 1, 2004 | 10 | | through August 30, 2019 August 30, 2014 ,
a
purchaser of | 11 | | manufacturing
machinery and equipment that qualifies for the | 12 | | exemption provided by
paragraph (18) of Section 3-5 of this Act | 13 | | earns a credit in an amount equal to
a fixed percentage of the | 14 | | tax which would have been incurred under this Act on
those | 15 | | purchases.
For purchases of graphic arts machinery and | 16 | | equipment made on or after July
1, 1996 and through June 30, | 17 | | 2003, and on and after September 1, 2004 through August 30, | 18 | | 2019 August 30, 2014 , a purchaser of graphic arts machinery
and | 19 | | equipment that qualifies for
the exemption provided by | 20 | | paragraph (6) of Section 3-5 of this Act earns a
credit in an | 21 | | amount equal to a fixed percentage of the tax that would have | 22 | | been
incurred under this Act on those purchases.
The credit | 23 | | earned for purchases of manufacturing machinery and equipment |
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| 1 | | or
graphic arts machinery and equipment shall be referred to as | 2 | | the
Manufacturer's Purchase
Credit.
A graphic arts producer is | 3 | | a person engaged in graphic arts production as
defined in | 4 | | Section 2-30 of the Retailers' Occupation Tax Act. Beginning | 5 | | July
1, 1996, all references in this Section to manufacturers | 6 | | or manufacturing shall
also be deemed to refer to graphic arts | 7 | | producers or graphic arts production.
| 8 | | The amount of credit shall be a percentage of the tax that | 9 | | would have
been incurred on the purchase of manufacturing | 10 | | machinery and equipment
or graphic arts machinery and equipment
| 11 | | if the exemptions provided by paragraph (6) or paragraph
(18) | 12 | | of Section 3-5
of this Act had not been applicable. The | 13 | | percentage shall be as follows:
| 14 | | (1) 15% for purchases made on or before June 30, 1995.
| 15 | | (2) 25% for purchases made after June 30, 1995, and on | 16 | | or before June 30,
1996.
| 17 | | (3) 40% for purchases made after June 30, 1996, and on | 18 | | or before June 30,
1997.
| 19 | | (4) 50% for purchases made on or after July 1, 1997.
| 20 | | (a) Manufacturer's Purchase Credit earned prior to July 1, | 21 | | 2003. This subsection (a) applies to Manufacturer's Purchase | 22 | | Credit earned prior to July 1, 2003. A purchaser of production | 23 | | related tangible personal property desiring to use
the | 24 | | Manufacturer's Purchase Credit shall certify to the seller | 25 | | prior to
October 1, 2003 that the
purchaser is satisfying all | 26 | | or part of the liability under the Use Tax Act or
the Service |
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| 1 | | Use Tax Act that is due on the
purchase of the production | 2 | | related tangible personal property by use of
Manufacturer's | 3 | | Purchase Credit. The Manufacturer's Purchase Credit
| 4 | | certification must be dated and shall include the name and | 5 | | address of the
purchaser, the purchaser's registration number, | 6 | | if registered, the credit being
applied, and a statement that | 7 | | the State Use Tax or Service Use Tax liability is
being | 8 | | satisfied with the manufacturer's or graphic arts producer's
| 9 | | accumulated purchase credit.
Certification may be incorporated | 10 | | into the manufacturer's or graphic arts
producer's purchase | 11 | | order.
Manufacturer's Purchase Credit certification provided | 12 | | by the manufacturer
or graphic
arts producer prior to October | 13 | | 1, 2003 may be used to
satisfy the retailer's or serviceman's | 14 | | liability under the Retailers'
Occupation Tax Act or Service | 15 | | Occupation Tax Act for the credit claimed, not to
exceed 6.25% | 16 | | of the receipts subject to tax from a qualifying purchase, but
| 17 | | only if the retailer or serviceman reports the Manufacturer's | 18 | | Purchase Credit
claimed as required by the Department. A | 19 | | Manufacturer's Purchase Credit
reported on any original or | 20 | | amended return
filed under
this Act after October 20, 2003 | 21 | | shall be disallowed. The Manufacturer's
Purchase Credit
earned | 22 | | by purchase of exempt manufacturing machinery and equipment
or | 23 | | graphic arts machinery and equipment is a non-transferable | 24 | | credit. A
manufacturer or graphic arts producer that enters | 25 | | into a
contract involving the installation of tangible personal | 26 | | property
into real estate within a manufacturing or graphic |
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| 1 | | arts production facility
may, prior to October 1, 2003, | 2 | | authorize a construction contractor
to utilize credit | 3 | | accumulated by the manufacturer or graphic arts producer
to
| 4 | | purchase the tangible personal property. A manufacturer or | 5 | | graphic arts
producer
intending to use accumulated credit to | 6 | | purchase such tangible personal
property shall execute a | 7 | | written contract authorizing the contractor to utilize
a | 8 | | specified dollar amount of credit. The contractor shall | 9 | | furnish, prior to
October 1, 2003, the supplier
with the | 10 | | manufacturer's or graphic arts producer's name, registration | 11 | | or
resale
number, and a statement that a specific amount of the | 12 | | Use Tax or Service Use
Tax liability, not to exceed 6.25% of | 13 | | the selling price, is being satisfied
with the credit. The | 14 | | manufacturer or graphic arts producer shall remain
liable to | 15 | | timely report all
information required by the annual Report of | 16 | | Manufacturer's Purchase Credit
Used for all credit utilized by | 17 | | a construction contractor.
| 18 | | No Manufacturer's Purchase Credit earned prior to July 1, | 19 | | 2003 may be used after October 1, 2003. The Manufacturer's | 20 | | Purchase Credit may be used to satisfy liability under the
Use | 21 | | Tax Act or the Service Use Tax Act due on the purchase of | 22 | | production
related tangible personal property (including | 23 | | purchases by a manufacturer, by
a graphic arts producer, or by
| 24 | | a lessor who rents or leases the use of the property to a | 25 | | manufacturer or
graphic arts producer)
that does not otherwise | 26 | | qualify
for the manufacturing machinery and equipment
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| 1 | | exemption or the graphic arts machinery and equipment | 2 | | exemption.
"Production related
tangible personal property" | 3 | | means (i) all tangible personal property used or
consumed by | 4 | | the purchaser in a manufacturing facility in which a | 5 | | manufacturing
process described in Section 2-45 of the | 6 | | Retailers' Occupation Tax Act takes
place, including tangible | 7 | | personal property purchased for incorporation into
real estate | 8 | | within a manufacturing facility
and including, but not limited | 9 | | to, tangible
personal property used or consumed in activities | 10 | | such as preproduction material
handling, receiving, quality | 11 | | control, inventory control, storage, staging, and
packaging | 12 | | for shipping and transportation purposes; (ii) all tangible
| 13 | | personal property used or consumed by the purchaser in a | 14 | | graphic arts facility
in which graphic arts production as | 15 | | described in Section 2-30 of the Retailers'
Occupation Tax Act | 16 | | takes place, including tangible personal property purchased
| 17 | | for incorporation into real estate within a graphic arts | 18 | | facility and
including, but not limited to, all tangible | 19 | | personal property used or consumed
in activities such as | 20 | | graphic arts preliminary or pre-press production,
| 21 | | pre-production material handling, receiving, quality control, | 22 | | inventory
control, storage, staging, sorting, labeling, | 23 | | mailing, tying, wrapping, and
packaging; and (iii) all tangible
| 24 | | personal property used or consumed by the purchaser
for | 25 | | research and development.
"Production related tangible | 26 | | personal property" does not include (i) tangible
personal |
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| 1 | | property used, within or without a manufacturing facility, in | 2 | | sales,
purchasing, accounting, fiscal management, marketing, | 3 | | personnel recruitment or
selection, or landscaping or (ii) | 4 | | tangible personal property required to be
titled or registered | 5 | | with a department, agency, or unit of federal, state, or
local | 6 | | government. The Manufacturer's Purchase Credit may be used, | 7 | | prior to
October 1, 2003, to satisfy
the tax arising either | 8 | | from the purchase of
machinery and equipment on or after | 9 | | January 1,
1995 for which the exemption
provided by paragraph | 10 | | (18) of Section 3-5 of this Act was
erroneously claimed, or the | 11 | | purchase of machinery and equipment on or after
July 1, 1996 | 12 | | for which the exemption provided by paragraph (6) of Section | 13 | | 3-5
of this Act was erroneously claimed, but not in
| 14 | | satisfaction of penalty, if any, and interest for failure to | 15 | | pay the tax
when due. A
purchaser of production related | 16 | | tangible personal property who is required to
pay Illinois Use | 17 | | Tax or Service Use Tax on the purchase directly to the
| 18 | | Department may, prior to October 1, 2003, utilize the | 19 | | Manufacturer's
Purchase Credit in satisfaction of
the tax | 20 | | arising from that purchase, but not in
satisfaction of penalty | 21 | | and interest.
A purchaser who uses the Manufacturer's Purchase | 22 | | Credit to purchase property
which is later determined not to be | 23 | | production related tangible personal
property may be liable for | 24 | | tax, penalty, and interest on the purchase of that
property as | 25 | | of the date of purchase but shall be entitled to use the | 26 | | disallowed
Manufacturer's Purchase
Credit, so long as it has |
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| 1 | | not expired and is used prior to October 1, 2003,
on qualifying | 2 | | purchases of production
related tangible personal property not | 3 | | previously subject to credit usage.
The Manufacturer's | 4 | | Purchase Credit earned by a manufacturer or graphic arts
| 5 | | producer
expires the last day of the second calendar year | 6 | | following the
calendar year in which the credit arose. No | 7 | | Manufacturer's Purchase Credit
may be used after September 30, | 8 | | 2003
regardless of
when that credit was earned.
| 9 | | A purchaser earning Manufacturer's Purchase Credit shall | 10 | | sign and file an
annual Report of Manufacturer's Purchase | 11 | | Credit Earned for each calendar year
no later than the last day | 12 | | of the sixth month following the calendar year in
which a | 13 | | Manufacturer's Purchase Credit is earned. A Report of | 14 | | Manufacturer's
Purchase Credit Earned shall be filed on forms | 15 | | as prescribed or approved by the
Department and shall state, | 16 | | for each month of the calendar year: (i) the total
purchase | 17 | | price of all purchases of exempt manufacturing or graphic arts
| 18 | | machinery on which the
credit was earned; (ii) the total State | 19 | | Use Tax or Service Use Tax which would
have been due on those | 20 | | items; (iii) the percentage used to calculate the amount
of | 21 | | credit earned; (iv) the amount of credit earned; and (v) such | 22 | | other
information as the Department may reasonably require. A | 23 | | purchaser earning
Manufacturer's Purchase Credit shall | 24 | | maintain records which identify, as to
each purchase of | 25 | | manufacturing or graphic arts machinery and equipment
on which | 26 | | the purchaser
earned Manufacturer's Purchase Credit, the |
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| 1 | | vendor (including, if applicable,
either the vendor's | 2 | | registration number or Federal Employer Identification
| 3 | | Number), the purchase price, and the amount of Manufacturer's | 4 | | Purchase Credit
earned on each purchase.
| 5 | | A purchaser using Manufacturer's Purchase Credit shall | 6 | | sign and file an
annual Report of Manufacturer's Purchase | 7 | | Credit Used for each calendar year no
later than the last day | 8 | | of the sixth month following the calendar year in which
a | 9 | | Manufacturer's Purchase Credit is used. A Report of | 10 | | Manufacturer's Purchase
Credit Used
shall be filed on forms as | 11 | | prescribed or approved by the Department and
shall state, for | 12 | | each month of the calendar year: (i) the total purchase price
| 13 | | of production related tangible personal property purchased | 14 | | from Illinois
suppliers; (ii) the total purchase price of | 15 | | production related tangible
personal property purchased from | 16 | | out-of-state suppliers; (iii) the total amount
of credit used | 17 | | during such month; and (iv) such
other information as the | 18 | | Department may reasonably require. A purchaser using
| 19 | | Manufacturer's Purchase Credit shall maintain records that | 20 | | identify, as to
each purchase of production related tangible | 21 | | personal property on which the
purchaser used Manufacturer's | 22 | | Purchase Credit, the vendor (including, if
applicable, either | 23 | | the vendor's registration number or Federal Employer
| 24 | | Identification Number), the purchase price, and the amount of | 25 | | Manufacturer's
Purchase Credit used on each purchase.
| 26 | | No annual report shall be filed before May 1, 1996 or after |
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| 1 | | June 30,
2004. A purchaser that fails to
file an annual Report | 2 | | of Manufacturer's Purchase Credit Earned or an annual
Report of | 3 | | Manufacturer's
Purchase Credit Used by the last day of the | 4 | | sixth month following the
end of the calendar year shall | 5 | | forfeit all Manufacturer's Purchase Credit for
that calendar | 6 | | year unless it establishes that its failure to file was due to
| 7 | | reasonable cause. Manufacturer's Purchase Credit reports may | 8 | | be amended
to report and claim credit on qualifying purchases | 9 | | not previously reported at
any time before the credit would | 10 | | have expired, unless both the Department and
the purchaser have | 11 | | agreed to an extension of
the statute of limitations for the | 12 | | issuance of a notice of tax liability as
provided in Section 4 | 13 | | of the Retailers' Occupation Tax Act. If the time for
| 14 | | assessment or refund has been extended, then amended reports | 15 | | for a calendar
year may be filed at any time prior to the date | 16 | | to which the statute of
limitations for the calendar year or | 17 | | portion thereof has been extended.
No Manufacturer's Purchase
| 18 | | Credit report filed with the Department for periods prior to | 19 | | January 1, 1995
shall be approved.
Manufacturer's Purchase | 20 | | Credit claimed on an amended report may be used,
until October | 21 | | 1, 2003, to
satisfy tax liability under the Use Tax Act or the | 22 | | Service Use Tax Act (i) on
qualifying purchases of production | 23 | | related tangible personal property made
after the date the | 24 | | amended report is filed or (ii) assessed by the Department
on | 25 | | qualifying purchases of production related tangible personal | 26 | | property made
in the case of manufacturers
on or after January |
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| 1 | | 1, 1995, or in the case of graphic arts producers on or
after | 2 | | July 1, 1996.
| 3 | | If the purchaser is not the manufacturer or a graphic arts | 4 | | producer, but
rents or
leases the use of the property to a | 5 | | manufacturer or graphic arts producer,
the purchaser may earn,
| 6 | | report, and use Manufacturer's Purchase Credit in the same | 7 | | manner as a
manufacturer or graphic arts producer.
| 8 | | A purchaser shall not be entitled to any Manufacturer's | 9 | | Purchase
Credit for a purchase that is required to be reported | 10 | | and is not timely
reported as provided in this Section. A | 11 | | purchaser remains liable for (i) any
tax that was satisfied by | 12 | | use of a Manufacturer's Purchase Credit, as of the
date of | 13 | | purchase, if that use is not timely reported as required in | 14 | | this
Section and (ii) for any applicable penalties and interest | 15 | | for failing to pay
the tax when due. No Manufacturer's Purchase | 16 | | Credit may be used after
September 30, 2003 to
satisfy any
tax | 17 | | liability imposed under this Act, including any audit | 18 | | liability.
| 19 | | (b) Manufacturer's Purchase Credit earned on and after | 20 | | September 1, 2004. This subsection (b) applies to | 21 | | Manufacturer's Purchase Credit earned on and after September 1, | 22 | | 2004. Manufacturer's Purchase Credit earned on or after | 23 | | September 1, 2004 may only be used to satisfy the Use Tax or | 24 | | Service Use Tax liability incurred on production related | 25 | | tangible personal property purchased on or after September 1, | 26 | | 2004. A purchaser of production related tangible personal |
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| 1 | | property desiring to use the Manufacturer's Purchase Credit | 2 | | shall certify to the seller that the purchaser is satisfying | 3 | | all or part of the liability under the Use Tax Act or the | 4 | | Service Use Tax Act that is due on the purchase of the | 5 | | production related tangible personal property by use of | 6 | | Manufacturer's Purchase Credit. The Manufacturer's Purchase | 7 | | Credit certification must be dated and shall include the name | 8 | | and address of the purchaser, the purchaser's registration | 9 | | number, if registered, the credit being applied, and a | 10 | | statement that the State Use Tax or Service Use Tax liability | 11 | | is being satisfied with the manufacturer's or graphic arts | 12 | | producer's accumulated purchase credit. Certification may be | 13 | | incorporated into the manufacturer's or graphic arts | 14 | | producer's purchase order. Manufacturer's Purchase Credit | 15 | | certification provided by the manufacturer or graphic arts | 16 | | producer may be used to satisfy the retailer's or serviceman's | 17 | | liability under the Retailers' Occupation Tax Act or Service | 18 | | Occupation Tax Act for the credit claimed, not to exceed 6.25% | 19 | | of the receipts subject to tax from a qualifying purchase, but | 20 | | only if the retailer or serviceman reports the Manufacturer's | 21 | | Purchase Credit claimed as required by the Department. The | 22 | | Manufacturer's Purchase Credit earned by purchase of exempt | 23 | | manufacturing machinery and equipment or graphic arts | 24 | | machinery and equipment is a non-transferable credit. A | 25 | | manufacturer or graphic arts producer that enters into a | 26 | | contract involving the installation of tangible personal |
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| 1 | | property into real estate within a manufacturing or graphic | 2 | | arts production facility may, on or after September 1, 2004, | 3 | | authorize a construction contractor to utilize credit | 4 | | accumulated by the manufacturer or graphic arts producer to | 5 | | purchase the tangible personal property. A manufacturer or | 6 | | graphic arts producer intending to use accumulated credit to | 7 | | purchase such tangible personal property shall execute a | 8 | | written contract authorizing the contractor to utilize a | 9 | | specified dollar amount of credit. The contractor shall furnish | 10 | | the supplier with the manufacturer's or graphic arts producer's | 11 | | name, registration or resale number, and a statement that a | 12 | | specific amount of the Use Tax or Service Use Tax liability, | 13 | | not to exceed 6.25% of the selling price, is being satisfied | 14 | | with the credit. The manufacturer or graphic arts producer | 15 | | shall remain liable to timely report all information required | 16 | | by the annual Report of Manufacturer's Purchase Credit Used for | 17 | | all credit utilized by a construction contractor. | 18 | | The Manufacturer's Purchase Credit may be used to satisfy | 19 | | liability under the Use Tax Act or the Service Use Tax Act due | 20 | | on the purchase, made on or after September 1, 2004, of | 21 | | production related tangible personal property (including | 22 | | purchases by a manufacturer, by a graphic arts producer, or by | 23 | | a lessor who rents or leases the use of the property to a | 24 | | manufacturer or graphic arts producer) that does not otherwise | 25 | | qualify for the manufacturing machinery and equipment | 26 | | exemption or the graphic arts machinery and equipment |
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| 1 | | exemption. "Production related tangible personal property" | 2 | | means (i) all tangible personal property used or consumed by | 3 | | the purchaser in a manufacturing facility in which a | 4 | | manufacturing process described in Section 2-45 of the | 5 | | Retailers' Occupation Tax Act takes place, including tangible | 6 | | personal property purchased for incorporation into real estate | 7 | | within a manufacturing facility and including, but not limited | 8 | | to, tangible personal property used or consumed in activities | 9 | | such as preproduction material handling, receiving, quality | 10 | | control, inventory control, storage, staging, and packaging | 11 | | for shipping and transportation purposes; (ii) all tangible | 12 | | personal property used or consumed by the purchaser in a | 13 | | graphic arts facility in which graphic arts production as | 14 | | described in Section 2-30 of the Retailers' Occupation Tax Act | 15 | | takes place, including tangible personal property purchased | 16 | | for incorporation into real estate within a graphic arts | 17 | | facility and including, but not limited to, all tangible | 18 | | personal property used or consumed in activities such as | 19 | | graphic arts preliminary or pre-press production, | 20 | | pre-production material handling, receiving, quality control, | 21 | | inventory control, storage, staging, sorting, labeling, | 22 | | mailing, tying, wrapping, and packaging; and (iii) all tangible | 23 | | personal property used or consumed by the purchaser for | 24 | | research and development. "Production related tangible | 25 | | personal property" does not include (i) tangible personal | 26 | | property used, within or without a manufacturing facility, in |
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| 1 | | sales, purchasing, accounting, fiscal management, marketing, | 2 | | personnel recruitment or selection, or landscaping or (ii) | 3 | | tangible personal property required to be titled or registered | 4 | | with a department, agency, or unit of federal, state, or local | 5 | | government. The Manufacturer's Purchase Credit may be used to | 6 | | satisfy the tax arising either from the purchase of machinery | 7 | | and equipment on or after September 1, 2004 for which the | 8 | | exemption provided by paragraph (18) of Section 3-5 of this Act | 9 | | was erroneously claimed, or the purchase of machinery and | 10 | | equipment on or after September 1, 2004 for which the exemption | 11 | | provided by paragraph (6) of Section 3-5 of this Act was | 12 | | erroneously claimed, but not in satisfaction of penalty, if | 13 | | any, and interest for failure to pay the tax when due. A | 14 | | purchaser of production related tangible personal property | 15 | | that is purchased on or after September 1, 2004 who is required | 16 | | to pay Illinois Use Tax or Service Use Tax on the purchase | 17 | | directly to the Department may utilize the Manufacturer's | 18 | | Purchase Credit in satisfaction of the tax arising from that | 19 | | purchase, but not in satisfaction of penalty and interest. A | 20 | | purchaser who uses the Manufacturer's Purchase Credit to | 21 | | purchase property on and after September 1, 2004 which is later | 22 | | determined not to be production related tangible personal | 23 | | property may be liable for tax, penalty, and interest on the | 24 | | purchase of that property as of the date of purchase but shall | 25 | | be entitled to use the disallowed Manufacturer's Purchase | 26 | | Credit, so long as it has not expired and is used on qualifying |
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| 1 | | purchases of production related tangible personal property not | 2 | | previously subject to credit usage. The Manufacturer's | 3 | | Purchase Credit earned by a manufacturer or graphic arts | 4 | | producer expires the last day of the second calendar year | 5 | | following the calendar year in which the credit arose.
A | 6 | | purchaser earning Manufacturer's Purchase Credit shall sign | 7 | | and file an annual Report of Manufacturer's Purchase Credit | 8 | | Earned for each calendar year no later than the last day of the | 9 | | sixth month following the calendar year in which a | 10 | | Manufacturer's Purchase Credit is earned. A Report of | 11 | | Manufacturer's Purchase Credit Earned shall be filed on forms | 12 | | as prescribed or approved by the Department and shall state, | 13 | | for each month of the calendar year: (i) the total purchase | 14 | | price of all purchases of exempt manufacturing or graphic arts | 15 | | machinery on which the credit was earned; (ii) the total State | 16 | | Use Tax or Service Use Tax which would have been due on those | 17 | | items; (iii) the percentage used to calculate the amount of | 18 | | credit earned; (iv) the amount of credit earned; and (v) such | 19 | | other information as the Department may reasonably require. A | 20 | | purchaser earning Manufacturer's Purchase Credit shall | 21 | | maintain records which identify, as to each purchase of | 22 | | manufacturing or graphic arts machinery and equipment on which | 23 | | the purchaser earned Manufacturer's Purchase Credit, the | 24 | | vendor (including, if applicable, either the vendor's | 25 | | registration number or Federal Employer Identification | 26 | | Number), the purchase price, and the amount of Manufacturer's |
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| 1 | | Purchase Credit earned on each purchase.
A purchaser using | 2 | | Manufacturer's Purchase Credit shall sign and file an annual | 3 | | Report of Manufacturer's Purchase Credit Used for each calendar | 4 | | year no later than the last day of the sixth month following | 5 | | the calendar year in which a Manufacturer's Purchase Credit is | 6 | | used. A Report of Manufacturer's Purchase Credit Used shall be | 7 | | filed on forms as prescribed or approved by the Department and | 8 | | shall state, for each month of the calendar year: (i) the total | 9 | | purchase price of production related tangible personal | 10 | | property purchased from Illinois suppliers; (ii) the total | 11 | | purchase price of production related tangible personal | 12 | | property purchased from out-of-state suppliers; (iii) the | 13 | | total amount of credit used during such month; and (iv) such | 14 | | other information as the Department may reasonably require. A | 15 | | purchaser using Manufacturer's Purchase Credit shall maintain | 16 | | records that identify, as to each purchase of production | 17 | | related tangible personal property on which the purchaser used | 18 | | Manufacturer's Purchase Credit, the vendor (including, if | 19 | | applicable, either the vendor's registration number or Federal | 20 | | Employer Identification Number), the purchase price, and the | 21 | | amount of Manufacturer's Purchase Credit used on each purchase. | 22 | | A purchaser that fails to file an annual Report of | 23 | | Manufacturer's Purchase Credit Earned or an annual Report of | 24 | | Manufacturer's Purchase Credit Used by the last day of the | 25 | | sixth month following the end of the calendar year shall | 26 | | forfeit all Manufacturer's Purchase Credit for that calendar |
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| 1 | | year unless it establishes that its failure to file was due to | 2 | | reasonable cause. Manufacturer's Purchase Credit reports may | 3 | | be amended to report and claim credit on qualifying purchases | 4 | | not previously reported at any time before the credit would | 5 | | have expired, unless both the Department and the purchaser have | 6 | | agreed to an extension of the statute of limitations for the | 7 | | issuance of a notice of tax liability as provided in Section 4 | 8 | | of the Retailers' Occupation Tax Act. If the time for | 9 | | assessment or refund has been extended, then amended reports | 10 | | for a calendar year may be filed at any time prior to the date | 11 | | to which the statute of limitations for the calendar year or | 12 | | portion thereof has been extended. Manufacturer's Purchase | 13 | | Credit claimed on an amended report may be used to satisfy tax | 14 | | liability under the Use Tax Act or the Service Use Tax Act (i) | 15 | | on qualifying purchases of production related tangible | 16 | | personal property made after the date the amended report is | 17 | | filed or (ii) assessed by the Department on qualifying | 18 | | production related tangible personal property purchased on or | 19 | | after September 1, 2004. If the purchaser is not the | 20 | | manufacturer or a graphic arts producer, but rents or leases | 21 | | the use of the property to a manufacturer or graphic arts | 22 | | producer, the purchaser may earn, report, and use | 23 | | Manufacturer's Purchase Credit in the same manner as a | 24 | | manufacturer or graphic arts producer.
A purchaser shall not be | 25 | | entitled to any Manufacturer's Purchase Credit for a purchase | 26 | | that is required to be reported and is not timely reported as |
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| 1 | | provided in this Section. A purchaser remains liable for (i) | 2 | | any tax that was satisfied by use of a Manufacturer's Purchase | 3 | | Credit, as of the date of purchase, if that use is not timely | 4 | | reported as required in this Section and (ii) for any | 5 | | applicable penalties and interest for failing to pay the tax | 6 | | when due. | 7 | | (Source: P.A. 96-116, eff. 7-31-09.)
| 8 | | Section 10. The Service Use Tax Act is amended by changing | 9 | | Section 3-70 as follows:
| 10 | | (35 ILCS 110/3-70)
| 11 | | Sec. 3-70. Manufacturer's Purchase Credit. For purchases | 12 | | of machinery and
equipment made on and after January 1, 1995 | 13 | | and through June 30, 2003, and on and after September 1, 2004 | 14 | | through August 30, 2019 August 30, 2014 ,
a
purchaser of | 15 | | manufacturing
machinery and equipment that qualifies for the | 16 | | exemption provided by Section
2 of this Act earns a credit in | 17 | | an amount equal to a fixed
percentage of
the tax which would | 18 | | have been incurred under this Act on those purchases.
For | 19 | | purchases of graphic arts machinery and equipment made on or | 20 | | after July
1, 1996 through June 30, 2003, and on and after | 21 | | September 1, 2004 through August 30, 2019 August 30, 2014 , a | 22 | | purchase of graphic arts machinery and
equipment that qualifies | 23 | | for
the exemption provided by paragraph (5) of Section 3-5 of | 24 | | this Act earns a
credit in an amount equal to a fixed |
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| 1 | | percentage of the tax that would have been
incurred under this | 2 | | Act on those purchases.
The credit earned for the purchase of | 3 | | manufacturing machinery and equipment
and graphic arts | 4 | | machinery and equipment shall be referred to
as the | 5 | | Manufacturer's Purchase Credit.
A graphic arts producer is a | 6 | | person engaged in graphic arts production as
defined in Section | 7 | | 3-30 of the Service Occupation Tax Act. Beginning July 1,
1996, | 8 | | all references in this Section to manufacturers or | 9 | | manufacturing shall
also refer to graphic arts producers or | 10 | | graphic arts production.
| 11 | | The amount of credit shall be a percentage of the tax that | 12 | | would have been
incurred on the purchase of the manufacturing | 13 | | machinery and equipment or
graphic arts machinery and equipment
| 14 | | if the
exemptions provided by Section 2 or paragraph (5) of
| 15 | | Section 3-5 of
this Act had not
been applicable.
| 16 | | All purchases prior to October 1, 2003 of manufacturing | 17 | | machinery and
equipment and graphic arts
machinery and | 18 | | equipment that qualify for the exemptions provided by paragraph
| 19 | | (5) of Section 2
or paragraph (5) of Section 3-5 of this Act | 20 | | qualify for the credit without
regard to whether the serviceman | 21 | | elected, or could have elected, under
paragraph (7) of Section | 22 | | 2 of this Act to exclude the transaction from this
Act. If the | 23 | | serviceman's billing to the service customer separately states | 24 | | a
selling price for the exempt manufacturing machinery or | 25 | | equipment or the exempt
graphic arts machinery and equipment, | 26 | | the credit shall be calculated, as
otherwise provided herein, |
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| 1 | | based on that selling price. If the serviceman's
billing does | 2 | | not separately state a selling price for the exempt | 3 | | manufacturing
machinery and equipment or the exempt graphic | 4 | | arts machinery and equipment, the
credit shall be calculated, | 5 | | as otherwise provided herein, based on 50% of the
entire | 6 | | billing. If the serviceman contracts to design, develop, and | 7 | | produce
special order manufacturing machinery and equipment or | 8 | | special order graphic
arts machinery and equipment, and the | 9 | | billing does not separately state a
selling price for such | 10 | | special order machinery and
equipment, the credit shall be | 11 | | calculated, as otherwise provided herein, based
on 50% of the | 12 | | entire billing. The provisions of this paragraph are effective
| 13 | | for purchases made on or after January 1, 1995.
| 14 | | The percentage shall be as follows:
| 15 | | (1) 15% for purchases made on or before June 30, 1995.
| 16 | | (2) 25% for purchases made after June 30, 1995, and on | 17 | | or before June 30,
1996.
| 18 | | (3) 40% for purchases made after June 30, 1996, and on | 19 | | or before June 30,
1997.
| 20 | | (4) 50% for purchases made on or after July 1, 1997.
| 21 | | (a) Manufacturer's Purchase Credit earned prior to July 1, | 22 | | 2003. This subsection (a) applies to Manufacturer's Purchase | 23 | | Credit earned prior to July 1, 2003. A purchaser of production | 24 | | related tangible personal property desiring to use
the | 25 | | Manufacturer's Purchase Credit shall certify to the seller | 26 | | prior to
October 1, 2003 that the
purchaser is satisfying all |
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| 1 | | or part of
the
liability under the Use Tax Act or the Service | 2 | | Use Tax Act that is due on the
purchase of the production | 3 | | related tangible personal property by use of a
Manufacturer's | 4 | | Purchase Credit. The Manufacturer's Purchase Credit
| 5 | | certification
must be dated and shall include the name and | 6 | | address of the purchaser, the
purchaser's registration number, | 7 | | if registered, the
credit being
applied, and a statement that | 8 | | the State Use Tax or Service Use Tax liability
is being | 9 | | satisfied with the manufacturer's or graphic arts producer's
| 10 | | accumulated purchase credit.
Certification may be incorporated | 11 | | into the manufacturer's or graphic arts
producer's
purchase | 12 | | order.
Manufacturer's Purchase Credit certification provided | 13 | | by the manufacturer
or graphic
arts producer
prior to October | 14 | | 1, 2003 may be used to satisfy the retailer's or
serviceman's | 15 | | liability under the
Retailers' Occupation Tax Act or
Service
| 16 | | Occupation Tax Act for the credit claimed, not to exceed
6.25% | 17 | | of the receipts subject to tax from a qualifying purchase, but | 18 | | only if
the retailer or serviceman reports the Manufacturer's | 19 | | Purchase Credit claimed
as required by the Department. A | 20 | | Manufacturer's Purchase Credit reported on
any original or | 21 | | amended return
filed under
this Act after October 20, 2003 | 22 | | shall be disallowed. The Manufacturer's
Purchase Credit earned | 23 | | by
purchase of exempt manufacturing machinery and equipment
or | 24 | | graphic arts machinery and equipment is a
non-transferable | 25 | | credit. A manufacturer or graphic arts producer
that enters | 26 | | into a
contract involving the installation of tangible personal |
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| 1 | | property into
real estate within a manufacturing or graphic | 2 | | arts production facility, prior
to October 1, 2003, may | 3 | | authorize a construction contractor
to utilize credit | 4 | | accumulated by the manufacturer or graphic arts producer
to
| 5 | | purchase the tangible personal property. A manufacturer or | 6 | | graphic arts
producer
intending to use accumulated credit to | 7 | | purchase such tangible personal
property shall execute a | 8 | | written contract authorizing the contractor to utilize
a | 9 | | specified dollar amount of credit. The contractor shall | 10 | | furnish, prior to
October 1, 2003, the supplier
with the | 11 | | manufacturer's or graphic arts producer's name, registration | 12 | | or
resale number, and a statement
that a specific amount of the | 13 | | Use Tax or Service Use Tax liability, not to
exceed 6.25% of | 14 | | the selling price, is being satisfied with the credit. The
| 15 | | manufacturer or graphic arts producer shall remain liable to | 16 | | timely report
all information required by
the annual Report of | 17 | | Manufacturer's Purchase Credit Used for credit utilized by
a
| 18 | | construction contractor.
| 19 | | No Manufacturer's Purchase Credit earned prior to July 1, | 20 | | 2003 may be used after October 1, 2003. The Manufacturer's | 21 | | Purchase Credit may be used to satisfy liability under the
Use | 22 | | Tax Act or the Service Use Tax Act due on the purchase of | 23 | | production
related tangible personal property (including | 24 | | purchases by a manufacturer, by
a graphic arts producer,
or a | 25 | | lessor who rents or leases the use of
the property to a | 26 | | manufacturer or graphic arts producer) that does not
otherwise |
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| 1 | | qualify for the manufacturing machinery and equipment
| 2 | | exemption or the graphic arts machinery and equipment | 3 | | exemption.
"Production related tangible personal
property" | 4 | | means (i) all tangible personal property used or consumed by | 5 | | the
purchaser in a manufacturing facility in which a | 6 | | manufacturing process
described in Section 2-45 of the | 7 | | Retailers' Occupation Tax Act
takes place, including tangible | 8 | | personal property purchased for incorporation
into
real estate | 9 | | within a manufacturing facility and including, but not limited
| 10 | | to,
tangible personal property used or consumed in activities | 11 | | such as
pre-production
material handling, receiving, quality | 12 | | control, inventory control, storage,
staging, and packaging | 13 | | for shipping and transportation purposes; (ii)
all tangible | 14 | | personal property used or consumed by the purchaser in a | 15 | | graphic
arts facility in which graphic arts production as | 16 | | described in Section 2-30 of
the Retailers' Occupation Tax Act | 17 | | takes place, including tangible personal
property purchased | 18 | | for incorporation into real estate within a graphic arts
| 19 | | facility and including, but not limited to, all tangible | 20 | | personal property used
or consumed in activities such as | 21 | | graphic arts preliminary or pre-press
production, | 22 | | pre-production material handling, receiving, quality control,
| 23 | | inventory control, storage, staging, sorting, labeling, | 24 | | mailing, tying,
wrapping, and packaging; and (iii) all tangible | 25 | | personal property used or
consumed by the purchaser
for | 26 | | research and
development. "Production related tangible |
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| 1 | | personal property" does not include
(i) tangible personal | 2 | | property used, within or without a manufacturing or
graphic | 3 | | arts
facility, in sales, purchasing,
accounting, fiscal | 4 | | management, marketing,
personnel recruitment or selection, or | 5 | | landscaping or (ii) tangible personal
property required to be | 6 | | titled or registered with a department, agency, or unit
of | 7 | | federal, state, or local
government. The Manufacturer's | 8 | | Purchase Credit may be used, prior to October
1, 2003, to | 9 | | satisfy the tax
arising either from the purchase of
machinery | 10 | | and equipment on or after January 1, 1995
for which the | 11 | | manufacturing machinery and equipment exemption
provided by | 12 | | Section 2 of this Act was
erroneously claimed, or the purchase | 13 | | of machinery and equipment on or after
July 1, 1996 for which | 14 | | the exemption provided by paragraph (5) of Section 3-5
of this | 15 | | Act was erroneously claimed, but not in
satisfaction of | 16 | | penalty, if any, and interest for failure to pay the tax
when | 17 | | due. A
purchaser of production related tangible personal | 18 | | property who is required to
pay Illinois Use Tax or Service Use | 19 | | Tax on the purchase directly to the
Department may, prior to | 20 | | October 1, 2003, utilize the Manufacturer's
Purchase Credit in | 21 | | satisfaction of
the tax arising from that purchase, but not in
| 22 | | satisfaction of penalty and
interest.
A purchaser who uses the | 23 | | Manufacturer's Purchase Credit to purchase
property
which is | 24 | | later determined not to be production related tangible personal
| 25 | | property may be liable for tax, penalty, and interest on the | 26 | | purchase of that
property as of the date of purchase but shall |
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| 1 | | be entitled to use the disallowed
Manufacturer's Purchase
| 2 | | Credit, so long as it has not expired and is used prior to | 3 | | October 1, 2003,
on qualifying purchases of production
related | 4 | | tangible personal property not previously subject to credit | 5 | | usage.
The Manufacturer's Purchase Credit earned by a | 6 | | manufacturer or graphic arts
producer
expires the last day of | 7 | | the second calendar year following the
calendar year in
which | 8 | | the credit arose. No Manufacturer's Purchase Credit may be used | 9 | | after
September 30, 2003
regardless of
when that credit was | 10 | | earned.
| 11 | | A purchaser earning Manufacturer's Purchase Credit shall | 12 | | sign and file an
annual Report of Manufacturer's Purchase | 13 | | Credit Earned for each calendar year
no later
than the last day | 14 | | of the sixth month following the calendar year in which a
| 15 | | Manufacturer's Purchase Credit is earned. A Report of | 16 | | Manufacturer's Purchase
Credit
Earned shall be filed on forms | 17 | | as prescribed or approved by the Department and
shall state, | 18 | | for each month of the calendar year: (i) the total purchase | 19 | | price
of all purchases of exempt manufacturing or graphic arts | 20 | | machinery on which
the credit was
earned; (ii) the total State | 21 | | Use Tax or Service Use Tax which would have been
due on those | 22 | | items; (iii) the percentage used to calculate the amount of | 23 | | credit
earned; (iv) the amount of credit earned; and (v) such | 24 | | other information as the
Department may reasonably require. A | 25 | | purchaser earning Manufacturer's Purchase
Credit shall | 26 | | maintain records which identify, as to each purchase of
|
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| 1 | | manufacturing or graphic arts machinery and equipment on which | 2 | | the
purchaser earned
Manufacturer's Purchase Credit, the | 3 | | vendor (including, if applicable, either
the vendor's | 4 | | registration number or Federal Employer Identification | 5 | | Number),
the purchase price, and the amount of Manufacturer's | 6 | | Purchase Credit earned on
each purchase.
| 7 | | A purchaser using Manufacturer's Purchase Credit shall | 8 | | sign and file an
annual Report of Manufacturer's Purchase | 9 | | Credit Used for each calendar year no
later than the last day | 10 | | of the sixth month following the calendar year in which
a | 11 | | Manufacturer's Purchase Credit is used. A Report of | 12 | | Manufacturer's Purchase
Credit Used shall be filed on forms as | 13 | | prescribed or approved by the Department
and
shall state, for | 14 | | each month of the calendar year: (i) the total purchase price
| 15 | | of production related tangible personal property purchased | 16 | | from Illinois
suppliers; (ii) the total purchase price
of | 17 | | production related tangible personal property purchased from | 18 | | out-of-state
suppliers; (iii) the total amount of credit used | 19 | | during such month; and (iv)
such
other information as the | 20 | | Department may reasonably require. A purchaser using
| 21 | | Manufacturer's Purchase Credit shall maintain records that | 22 | | identify, as to
each purchase of production related tangible | 23 | | personal property on which the
purchaser used Manufacturer's | 24 | | Purchase Credit, the vendor (including, if
applicable, either | 25 | | the vendor's registration number or Federal Employer
| 26 | | Identification Number), the purchase price, and the amount of |
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| 1 | | Manufacturer's
Purchase Credit used on each purchase.
| 2 | | No annual report shall be filed before May 1, 1996 or after | 3 | | June 30,
2004.
A purchaser that fails to file an annual Report | 4 | | of Manufacturer's Purchase
Credit
Earned or an annual Report of | 5 | | Manufacturer's Purchase Credit Used by the last
day
of the | 6 | | sixth month following the end of the calendar year shall | 7 | | forfeit all
Manufacturer's Purchase Credit for that calendar | 8 | | year unless it establishes
that its failure to file was due to | 9 | | reasonable cause.
Manufacturer's Purchase Credit
reports may | 10 | | be amended to report and claim credit on qualifying purchases | 11 | | not
previously reported at any time before the credit would | 12 | | have expired, unless
both the Department and the purchaser have | 13 | | agreed to an extension of
the statute of limitations for the | 14 | | issuance of a notice of tax liability as
provided in Section 4 | 15 | | of the Retailers' Occupation Tax Act. If the time for
| 16 | | assessment or refund has been extended, then amended reports | 17 | | for a calendar
year may be filed at any time prior to the date | 18 | | to which the statute of
limitations for the calendar year or | 19 | | portion thereof has been extended.
No Manufacturer's Purchase | 20 | | Credit report filed with the Department
for periods
prior to | 21 | | January 1, 1995 shall be approved.
Manufacturer's Purchase | 22 | | Credit claimed on an amended report may be used,
prior to | 23 | | October 1, 2003, to
satisfy tax liability under the Use Tax Act | 24 | | or the Service Use Tax Act (i) on
qualifying purchases of | 25 | | production related tangible personal property made
after the | 26 | | date the amended report is filed or (ii) assessed by the |
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| 1 | | Department
on qualifying purchases of production related | 2 | | tangible personal property made
in the case of manufacturers on | 3 | | or after January 1, 1995, or in the case
of graphic arts | 4 | | producers on or after July 1, 1996.
| 5 | | If the purchaser is not the manufacturer or a graphic arts | 6 | | producer, but
rents or
leases the use of the property to a | 7 | | manufacturer or a graphic arts
producer,
the purchaser may | 8 | | earn, report, and use
Manufacturer's
Purchase Credit in the | 9 | | same manner as a manufacturer or graphic arts
producer.
| 10 | | A purchaser shall not be entitled to any Manufacturer's | 11 | | Purchase
Credit for a purchase that is required to be reported | 12 | | and is not timely
reported as
provided in this Section. A | 13 | | purchaser remains liable for (i) any
tax that was satisfied by | 14 | | use of a Manufacturer's Purchase Credit, as of the
date of | 15 | | purchase, if that use is not timely reported as required in | 16 | | this
Section and (ii) for any applicable penalties and interest | 17 | | for failing to pay
the tax when due. No Manufacturer's Purchase | 18 | | Credit may be used after
September 30, 2003 to
satisfy any
tax | 19 | | liability imposed under this Act, including any audit | 20 | | liability.
| 21 | | (b) Manufacturer's Purchase Credit earned on and after | 22 | | September 1, 2004. This subsection (b) applies to | 23 | | Manufacturer's Purchase Credit earned on or after September 1, | 24 | | 2004. Manufacturer's Purchase Credit earned on or after | 25 | | September 1, 2004 may only be used to satisfy the Use Tax or | 26 | | Service Use Tax liability incurred on production related |
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| 1 | | tangible personal property purchased on or after September 1, | 2 | | 2004. A purchaser of production related tangible personal | 3 | | property desiring to use the Manufacturer's Purchase Credit | 4 | | shall certify to the seller that the purchaser is satisfying | 5 | | all or part of the liability under the Use Tax Act or the | 6 | | Service Use Tax Act that is due on the purchase of the | 7 | | production related tangible personal property by use of a | 8 | | Manufacturer's Purchase Credit. The Manufacturer's Purchase | 9 | | Credit certification must be dated and shall include the name | 10 | | and address of the purchaser, the purchaser's registration | 11 | | number, if registered, the credit being applied, and a | 12 | | statement that the State Use Tax or Service Use Tax liability | 13 | | is being satisfied with the manufacturer's or graphic arts | 14 | | producer's accumulated purchase credit. Certification may be | 15 | | incorporated into the manufacturer's or graphic arts | 16 | | producer's purchase order. Manufacturer's Purchase Credit | 17 | | certification provided by the manufacturer or graphic arts | 18 | | producer may be used to satisfy the retailer's or serviceman's | 19 | | liability under the Retailers' Occupation Tax Act or Service | 20 | | Occupation Tax Act for the credit claimed, not to exceed 6.25% | 21 | | of the receipts subject to tax from a qualifying purchase, but | 22 | | only if the retailer or serviceman reports the Manufacturer's | 23 | | Purchase Credit claimed as required by the Department. The | 24 | | Manufacturer's Purchase Credit earned by purchase of exempt | 25 | | manufacturing machinery and equipment or graphic arts | 26 | | machinery and equipment is a non-transferable credit. A |
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| 1 | | manufacturer or graphic arts producer that enters into a | 2 | | contract involving the installation of tangible personal | 3 | | property into real estate within a manufacturing or graphic | 4 | | arts production facility may, on or after September 1, 2004, | 5 | | authorize a construction contractor to utilize credit | 6 | | accumulated by the manufacturer or graphic arts producer to | 7 | | purchase the tangible personal property. A manufacturer or | 8 | | graphic arts producer intending to use accumulated credit to | 9 | | purchase such tangible personal property shall execute a | 10 | | written contract authorizing the contractor to utilize a | 11 | | specified dollar amount of credit. The contractor shall furnish | 12 | | the supplier with the manufacturer's or graphic arts producer's | 13 | | name, registration or resale number, and a statement that a | 14 | | specific amount of the Use Tax or Service Use Tax liability, | 15 | | not to exceed 6.25% of the selling price, is being satisfied | 16 | | with the credit. The manufacturer or graphic arts producer | 17 | | shall remain liable to timely report all information required | 18 | | by the annual Report of Manufacturer's Purchase Credit Used for | 19 | | credit utilized by a construction contractor. | 20 | | The Manufacturer's Purchase Credit may be used to satisfy | 21 | | liability under the Use Tax Act or the Service Use Tax Act due | 22 | | on the purchase, made on or after September 1, 2004, of | 23 | | production related tangible personal property (including | 24 | | purchases by a manufacturer, by a graphic arts producer, or a | 25 | | lessor who rents or leases the use of the property to a | 26 | | manufacturer or graphic arts producer) that does not otherwise |
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| 1 | | qualify for the manufacturing machinery and equipment | 2 | | exemption or the graphic arts machinery and equipment | 3 | | exemption. "Production related tangible personal property" | 4 | | means (i) all tangible personal property used or consumed by | 5 | | the purchaser in a manufacturing facility in which a | 6 | | manufacturing process described in Section 2-45 of the | 7 | | Retailers' Occupation Tax Act takes place, including tangible | 8 | | personal property purchased for incorporation into real estate | 9 | | within a manufacturing facility and including, but not limited | 10 | | to, tangible personal property used or consumed in activities | 11 | | such as pre-production material handling, receiving, quality | 12 | | control, inventory control, storage, staging, and packaging | 13 | | for shipping and transportation purposes; (ii) all tangible | 14 | | personal property used or consumed by the purchaser in a | 15 | | graphic arts facility in which graphic arts production as | 16 | | described in Section 2-30 of the Retailers' Occupation Tax Act | 17 | | takes place, including tangible personal property purchased | 18 | | for incorporation into real estate within a graphic arts | 19 | | facility and including, but not limited to, all tangible | 20 | | personal property used or consumed in activities such as | 21 | | graphic arts preliminary or pre-press production, | 22 | | pre-production material handling, receiving, quality control, | 23 | | inventory control, storage, staging, sorting, labeling, | 24 | | mailing, tying, wrapping, and packaging; and (iii) all tangible | 25 | | personal property used or consumed by the purchaser for | 26 | | research and development. "Production related tangible |
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| 1 | | personal property" does not include (i) tangible personal | 2 | | property used, within or without a manufacturing or graphic | 3 | | arts facility, in sales, purchasing, accounting, fiscal | 4 | | management, marketing, personnel recruitment or selection, or | 5 | | landscaping or (ii) tangible personal property required to be | 6 | | titled or registered with a department, agency, or unit of | 7 | | federal, state, or local government. The Manufacturer's | 8 | | Purchase Credit may be used to satisfy the tax arising either | 9 | | from the purchase of machinery and equipment on or after | 10 | | September 1, 2004 for which the manufacturing machinery and | 11 | | equipment exemption provided by Section 2 of this Act was | 12 | | erroneously claimed, or the purchase of machinery and equipment | 13 | | on or after September 1, 2004 for which the exemption provided | 14 | | by paragraph (5) of Section 3-5 of this Act was erroneously | 15 | | claimed, but not in satisfaction of penalty, if any, and | 16 | | interest for failure to pay the tax when due. A purchaser of | 17 | | production related tangible personal property that is | 18 | | purchased on or after September 1, 2004 who is required to pay | 19 | | Illinois Use Tax or Service Use Tax on the purchase directly to | 20 | | the Department may utilize the Manufacturer's Purchase Credit | 21 | | in satisfaction of the tax arising from that purchase, but not | 22 | | in satisfaction of penalty and interest. A purchaser who uses | 23 | | the Manufacturer's Purchase Credit to purchase property on and | 24 | | after September 1, 2004 which is later determined not to be | 25 | | production related tangible personal property may be liable for | 26 | | tax, penalty, and interest on the purchase of that property as |
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| 1 | | of the date of purchase but shall be entitled to use the | 2 | | disallowed Manufacturer's Purchase Credit, so long as it has | 3 | | not expired, on qualifying purchases of production related | 4 | | tangible personal property not previously subject to credit | 5 | | usage. The Manufacturer's Purchase Credit earned by a | 6 | | manufacturer or graphic arts producer expires the last day of | 7 | | the second calendar year following the calendar year in which | 8 | | the credit arose. | 9 | | A purchaser earning Manufacturer's Purchase Credit shall | 10 | | sign and file an annual Report of Manufacturer's Purchase | 11 | | Credit Earned for each calendar year no later than the last day | 12 | | of the sixth month following the calendar year in which a | 13 | | Manufacturer's Purchase Credit is earned. A Report of | 14 | | Manufacturer's Purchase Credit Earned shall be filed on forms | 15 | | as prescribed or approved by the Department and shall state, | 16 | | for each month of the calendar year: (i) the total purchase | 17 | | price of all purchases of exempt manufacturing or graphic arts | 18 | | machinery on which the credit was earned; (ii) the total State | 19 | | Use Tax or Service Use Tax which would have been due on those | 20 | | items; (iii) the percentage used to calculate the amount of | 21 | | credit earned; (iv) the amount of credit earned; and (v) such | 22 | | other information as the Department may reasonably require. A | 23 | | purchaser earning Manufacturer's Purchase Credit shall | 24 | | maintain records which identify, as to each purchase of | 25 | | manufacturing or graphic arts machinery and equipment on which | 26 | | the purchaser earned Manufacturer's Purchase Credit, the |
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| 1 | | vendor (including, if applicable, either the vendor's | 2 | | registration number or Federal Employer Identification | 3 | | Number), the purchase price, and the amount of Manufacturer's | 4 | | Purchase Credit earned on each purchase. | 5 | | A purchaser using Manufacturer's Purchase Credit shall | 6 | | sign and file an annual Report of Manufacturer's Purchase | 7 | | Credit Used for each calendar year no later than the last day | 8 | | of the sixth month following the calendar year in which a | 9 | | Manufacturer's Purchase Credit is used. A Report of | 10 | | Manufacturer's Purchase Credit Used shall be filed on forms as | 11 | | prescribed or approved by the Department and shall state, for | 12 | | each month of the calendar year: (i) the total purchase price | 13 | | of production related tangible personal property purchased | 14 | | from Illinois suppliers; (ii) the total purchase price of | 15 | | production related tangible personal property purchased from | 16 | | out-of-state suppliers; (iii) the total amount of credit used | 17 | | during such month; and (iv) such other information as the | 18 | | Department may reasonably require. A purchaser using | 19 | | Manufacturer's Purchase Credit shall maintain records that | 20 | | identify, as to each purchase of production related tangible | 21 | | personal property on which the purchaser used Manufacturer's | 22 | | Purchase Credit, the vendor (including, if applicable, either | 23 | | the vendor's registration number or Federal Employer | 24 | | Identification Number), the purchase price, and the amount of | 25 | | Manufacturer's Purchase Credit used on each purchase. | 26 | | A purchaser that fails to file an annual Report of |
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| 1 | | Manufacturer's Purchase Credit Earned or an annual Report of | 2 | | Manufacturer's Purchase Credit Used by the last day of the | 3 | | sixth month following the end of the calendar year shall | 4 | | forfeit all Manufacturer's Purchase Credit for that calendar | 5 | | year unless it establishes that its failure to file was due to | 6 | | reasonable cause. Manufacturer's Purchase Credit reports may | 7 | | be amended to report and claim credit on qualifying purchases | 8 | | not previously reported at any time before the credit would | 9 | | have expired, unless both the Department and the purchaser have | 10 | | agreed to an extension of the statute of limitations for the | 11 | | issuance of a notice of tax liability as provided in Section 4 | 12 | | of the Retailers' Occupation Tax Act. If the time for | 13 | | assessment or refund has been extended, then amended reports | 14 | | for a calendar year may be filed at any time prior to the date | 15 | | to which the statute of limitations for the calendar year or | 16 | | portion thereof has been extended. Manufacturer's Purchase | 17 | | Credit claimed on an amended report may be used to satisfy tax | 18 | | liability under the Use Tax Act or the Service Use Tax Act (i) | 19 | | on qualifying purchases of production related tangible | 20 | | personal property made after the date the amended report is | 21 | | filed or (ii) assessed by the Department on qualifying | 22 | | production related tangible personal property purchased on or | 23 | | after September 1, 2004. | 24 | | If the purchaser is not the manufacturer or a graphic arts | 25 | | producer, but rents or leases the use of the property to a | 26 | | manufacturer or a graphic arts producer, the purchaser may |
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| 1 | | earn, report, and use Manufacturer's Purchase Credit in the | 2 | | same manner as a manufacturer or graphic arts producer.
A | 3 | | purchaser shall not be entitled to any Manufacturer's Purchase | 4 | | Credit for a purchase that is required to be reported and is | 5 | | not timely reported as provided in this Section. A purchaser | 6 | | remains liable for (i) any tax that was satisfied by use of a | 7 | | Manufacturer's Purchase Credit, as of the date of purchase, if | 8 | | that use is not timely reported as required in this Section and | 9 | | (ii) for any applicable penalties and interest for failing to | 10 | | pay the tax when due.
| 11 | | (Source: P.A. 96-116, eff. 7-31-09.)
| 12 | | Section 99. Effective date. This Act takes effect upon | 13 | | becoming law.
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