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92_HB2379eng HB2379 Engrossed LRB9204175SMdvA 1 AN ACT in relation to taxes. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Illinois Municipal Code is amended by 5 changing Section 8-11-2 as follows: 6 (65 ILCS 5/8-11-2) (from Ch. 24, par. 8-11-2) 7 Sec. 8-11-2. The corporate authorities of any 8 municipality may tax any or all of the following occupations 9 or privileges: 10 1. Persons engaged in the business of transmitting 11 messages by means of electricity or radio magnetic waves, 12 or fiber optics, at a rate not to exceed 5% of the gross 13 receipts from that business originating within the 14 corporate limits of the municipality. Beginning January 15 1, 2001, prepaid telephone calling arrangements shall not 16 be subject to the tax imposed under this Section. For 17 purposes of this Section, "prepaid telephone calling 18 arrangements" means that term as defined in Section 2-27 19 of the Retailers' Occupation Tax Act. 20 2. Persons engaged in the business of distributing, 21 supplying, furnishing, or selling gas for use or 22 consumption within the corporate limits of a municipality 23 of 500,000 or fewer population, and not for resale, at a 24 rate not to exceed 5% of the gross receipts therefrom. 25 2a. Persons engaged in the business of 26 distributing, supplying, furnishing, or selling gas for 27 use or consumption within the corporate limits of a 28 municipality of over 500,000 population, and not for 29 resale, at a rate not to exceed 8% of the gross receipts 30 therefrom. If imposed, this tax shall be paid in monthly 31 payments. HB2379 Engrossed -2- LRB9204175SMdvA 1 3. The privilege of using or consuming electricity 2 acquired in a purchase at retail and used or consumed 3 within the corporate limits of the municipality at rates 4 not to exceed the following maximum rates, calculated on 5 a monthly basis for each purchaser: 6 (i) For the first 2,000 kilowatt-hours used or 7 consumed in a month; 0.61 cents per kilowatt-hour; 8 (ii) For the next 48,000 kilowatt-hours used or 9 consumed in a month; 0.40 cents per kilowatt-hour; 10 (iii) For the next 50,000 kilowatt-hours used or 11 consumed in a month; 0.36 cents per kilowatt-hour; 12 (iv) For the next 400,000 kilowatt-hours used or 13 consumed in a month; 0.35 cents per kilowatt-hour; 14 (v) For the next 500,000 kilowatt-hours used or 15 consumed in a month; 0.34 cents per kilowatt-hour; 16 (vi) For the next 2,000,000 kilowatt-hours used or 17 consumed in a month; 0.32 cents per kilowatt-hour; 18 (vii) For the next 2,000,000 kilowatt-hours used or 19 consumed in a month; 0.315 cents per kilowatt-hour; 20 (viii) For the next 5,000,000 kilowatt-hours used 21 or consumed in a month; 0.31 cents per kilowatt-hour; 22 (ix) For the next 10,000,000 kilowatt-hours used or 23 consumed in a month; 0.305 cents per kilowatt-hour; and 24 (x) For all electricity used or consumed in excess 25 of 20,000,000 kilowatt-hours in a month, 0.30 cents per 26 kilowatt-hour. 27 If a municipality imposes a tax at rates lower than 28 either the maximum rates specified in this Section or the 29 alternative maximum rates promulgated by the Illinois 30 Commerce Commission, as provided below, the tax rates 31 shall be imposed upon the kilowatt hour categories set 32 forth above with the same proportional relationship as 33 that which exists among such maximum rates. 34 Notwithstanding the foregoing, until December 31, 2008, HB2379 Engrossed -3- LRB9204175SMdvA 1 no municipality shall establish rates that are in excess 2 of rates reasonably calculated to produce revenues that 3 equal the maximum total revenues such municipality could 4 have received under the tax authorized by this 5 subparagraph in the last full calendar year prior to the 6 effective date of Section 65 of this amendatory Act of 7 1997; provided that this shall not be a limitation on the 8 amount of tax revenues actually collected by such 9 municipality. 10 Upon the request of the corporate authorities of a 11 municipality, the Illinois Commerce Commission shall, 12 within 90 days after receipt of such request, promulgate 13 alternative rates for each of these kilowatt-hour 14 categories that will reflect, as closely as reasonably 15 practical for that municipality, the distribution of the 16 tax among classes of purchasers as if the tax were based 17 on a uniform percentage of the purchase price of 18 electricity. A municipality that has adopted an 19 ordinance imposing a tax pursuant to subparagraph 3 as it 20 existed prior to the effective date of Section 65 of this 21 amendatory Act of 1997 may, rather than imposing the tax 22 permitted by this amendatory Act of 1997, continue to 23 impose the tax pursuant to that ordinance with respect to 24 gross receipts received from residential customers 25 through July 31, 1999, and with respect to gross receipts 26 from any non-residential customer until the first bill 27 issued to such customer for delivery services in 28 accordance with Section 16-104 of the Public Utilities 29 Act but in no case later than the last bill issued to 30 such customer before December 31, 2000. No ordinance 31 imposing the tax permitted by this amendatory Act of 1997 32 shall be applicable to any non-residential customer until 33 the first bill issued to such customer for delivery 34 services in accordance with Section 16-104 of the Public HB2379 Engrossed -4- LRB9204175SMdvA 1 Utilities Act but in no case later than the last bill 2 issued to such non-residential customer before December 3 31, 2000. 4 4. Persons engaged in the business of distributing, 5 supplying, furnishing, or selling water for use or 6 consumption within the corporate limits of the 7 municipality, and not for resale, at a rate not to exceed 8 5% of the gross receipts therefrom. 9 None of the taxes authorized by this Section may be 10 imposed with respect to any transaction in interstate 11 commerce or otherwise to the extent to which the business or 12 privilege may not, under the constitution and statutes of the 13 United States, be made the subject of taxation by this State 14 or any political sub-division thereof; nor shall any persons 15 engaged in the business of distributing, supplying, 16 furnishing, selling or transmitting gas, water, or 17 electricity, or engaged in the business of transmitting 18 messages, or using or consuming electricity acquired in a 19 purchase at retail, be subject to taxation under the 20 provisions of this Section for those transactions that are or 21 may become subject to taxation under the provisions of the 22 "Municipal Retailers' Occupation Tax Act" authorized by 23 Section 8-11-1; nor shall any tax authorized by this Section 24 be imposed upon any person engaged in a business or on any 25 privilege unless the tax is imposed in like manner and at the 26 same rate upon all persons engaged in businesses of the same 27 class in the municipality, whether privately or municipally 28 owned or operated, or exercising the same privilege within 29 the municipality. 30 Any of the taxes enumerated in this Section may be in 31 addition to the payment of money, or value of products or 32 services furnished to the municipality by the taxpayer as 33 compensation for the use of its streets, alleys, or other 34 public places, or installation and maintenance therein, HB2379 Engrossed -5- LRB9204175SMdvA 1 thereon or thereunder of poles, wires, pipes or other 2 equipment used in the operation of the taxpayer's business. 3 (a) If the corporate authorities of any home rule 4 municipality have adopted an ordinance that imposed a tax on 5 public utility customers, between July 1, 1971, and October 6 1, 1981, on the good faith belief that they were exercising 7 authority pursuant to Section 6 of Article VII of the 1970 8 Illinois Constitution, that action of the corporate 9 authorities shall be declared legal and valid, 10 notwithstanding a later decision of a judicial tribunal 11 declaring the ordinance invalid. No municipality shall be 12 required to rebate, refund, or issue credits for any taxes 13 described in this paragraph, and those taxes shall be deemed 14 to have been levied and collected in accordance with the 15 Constitution and laws of this State. 16 (b) In any case in which (i) prior to October 19, 1979, 17 the corporate authorities of any municipality have adopted an 18 ordinance imposing a tax authorized by this Section (or by 19 the predecessor provision of the "Revised Cities and Villages 20 Act") and have explicitly or in practice interpreted gross 21 receipts to include either charges added to customers' bills 22 pursuant to the provision of paragraph (a) of Section 36 of 23 the Public Utilities Act or charges added to customers' bills 24 by taxpayers who are not subject to rate regulation by the 25 Illinois Commerce Commission for the purpose of recovering 26 any of the tax liabilities or other amounts specified in such 27 paragraph (a) of Section 36 of that Act, and (ii) on or after 28 October 19, 1979, a judicial tribunal has construed gross 29 receipts to exclude all or part of those charges, then 30 neither those municipality nor any taxpayer who paid the tax 31 shall be required to rebate, refund, or issue credits for any 32 tax imposed or charge collected from customers pursuant to 33 the municipality's interpretation prior to October 19, 1979. 34 This paragraph reflects a legislative finding that it would HB2379 Engrossed -6- LRB9204175SMdvA 1 be contrary to the public interest to require a municipality 2 or its taxpayers to refund taxes or charges attributable to 3 the municipality's more inclusive interpretation of gross 4 receipts prior to October 19, 1979, and is not intended to 5 prescribe or limit judicial construction of this Section. The 6 legislative finding set forth in this subsection does not 7 apply to taxes imposed after the effective date of this 8 amendatory Act of 1995. 9 (c) The tax authorized by subparagraph 3 shall be 10 collected from the purchaser by the person maintaining a 11 place of business in this State who delivers the electricity 12 to the purchaser. This tax shall constitute a debt of the 13 purchaser to the person who delivers the electricity to the 14 purchaser and if unpaid, is recoverable in the same manner as 15 the original charge for delivering the electricity. Any tax 16 required to be collected pursuant to an ordinance authorized 17 by subparagraph 3 and any such tax collected by a person 18 delivering electricity shall constitute a debt owed to the 19 municipality by such person delivering the electricity, 20 provided, that the person delivering electricity shall be 21 allowed credit for such tax related to deliveries of 22 electricity the charges for which are written off as 23 uncollectible, and provided further, that if such charges are 24 thereafter collected, the delivering supplier shall be 25 obligated to remit such tax. For purposes of this subsection 26 (c), any partial payment not specifically identified by the 27 purchaser shall be deemed to be for the delivery of 28 electricity. Persons delivering electricity shall collect the 29 tax from the purchaser by adding such tax to the gross charge 30 for delivering the electricity, in the manner prescribed by 31 the municipality. Persons delivering electricity shall also 32 be authorized to add to such gross charge an amount equal to 33 3% of the tax to reimburse the person delivering electricity 34 for the expenses incurred in keeping records, billing HB2379 Engrossed -7- LRB9204175SMdvA 1 customers, preparing and filing returns, remitting the tax 2 and supplying data to the municipality upon request. If the 3 person delivering electricity fails to collect the tax from 4 the purchaser, then the purchaser shall be required to pay 5 the tax directly to the municipality in the manner prescribed 6 by the municipality. Persons delivering electricity who file 7 returns pursuant to this paragraph (c) shall, at the time of 8 filing such return, pay the municipality the amount of the 9 tax collected pursuant to subparagraph 3. 10 (d) For the purpose of the taxes enumerated in this 11 Section: 12 "Gross receipts" means the consideration received for the 13 transmission of messages, the consideration received for 14 distributing, supplying, furnishing or selling gas for use or 15 consumption and not for resale, and the consideration 16 received for distributing, supplying, furnishing or selling 17 water for use or consumption and not for resale, and for all 18 services rendered in connection therewith valued in money, 19 whether received in money or otherwise, including cash, 20 credit, services and property of every kind and material and 21 for all services rendered therewith, and shall be determined 22 without any deduction on account of the cost of transmitting 23 such messages, without any deduction on account of the cost 24 of the service, product or commodity supplied, the cost of 25 materials used, labor or service cost, or any other expenses 26 whatsoever. "Gross receipts" shall not include that portion 27 of the consideration received for distributing, supplying, 28 furnishing, or selling gas or water to, or for the 29 transmission of messages for, business enterprises described 30 in paragraph (e) of this Section to the extent and during the 31 period in which the exemption authorized by paragraph (e) is 32 in effect or for school districts or units of local 33 government described in paragraph (f) during the period in 34 which the exemption authorized in paragraph (f) is in effect. HB2379 Engrossed -8- LRB9204175SMdvA 1 "Gross receipts" shall not include amounts paid by 2 telecommunications retailers under the Telecommunications 3 Municipal Infrastructure Maintenance Fee Act. 4 For utility bills issued on or after May 1, 1996, but 5 before May 1, 1997, and for receipts from those utility 6 bills, "gross receipts" does not include one-third of (i) 7 amounts added to customers' bills under Section 9-222 of the 8 Public Utilities Act, or (ii) amounts added to customers' 9 bills by taxpayers who are not subject to rate regulation by 10 the Illinois Commerce Commission for the purpose of 11 recovering any of the tax liabilities described in Section 12 9-222 of the Public Utilities Act. For utility bills issued 13 on or after May 1, 1997, but before May 1, 1998, and for 14 receipts from those utility bills, "gross receipts" does not 15 include two-thirds of (i) amounts added to customers' bills 16 under Section 9-222 of the Public Utilities Act, or (ii) 17 amount added to customers' bills by taxpayers who are not 18 subject to rate regulation by the Illinois Commerce 19 Commission for the purpose of recovering any of the tax 20 liabilities described in Section 9-222 of the Public 21 Utilities Act. For utility bills issued on or after May 1, 22 1998, and for receipts from those utility bills, "gross 23 receipts" does not include (i) amounts added to customers' 24 bills under Section 9-222 of the Public Utilities Act, or 25 (ii) amounts added to customers' bills by taxpayers who are 26 not subject to rate regulation by the Illinois Commerce 27 Commission for the purpose of recovering any of the tax 28 liabilities described in Section 9-222 of the Public 29 Utilities Act. 30 For purposes of this Section "gross receipts" shall not 31 include (i) amounts added to customers' bills under Section 32 9-221 of the Public Utilities Act, or (ii) charges added to 33 customers' bills to recover the surcharge imposed under the 34 Emergency Telephone System Act. This paragraph is not HB2379 Engrossed -9- LRB9204175SMdvA 1 intended to nor does it make any change in the meaning of 2 "gross receipts" for the purposes of this Section, but is 3 intended to remove possible ambiguities, thereby confirming 4 the existing meaning of "gross receipts" prior to the 5 effective date of this amendatory Act of 1995. 6 The words "transmitting messages", in addition to the 7 usual and popular meaning of person to person communication, 8 shall include the furnishing, for a consideration, of 9 services or facilities (whether owned or leased), or both, to 10 persons in connection with the transmission of messages where 11 those persons do not, in turn, receive any consideration in 12 connection therewith, but shall not include such furnishing 13 of services or facilities to persons for the transmission of 14 messages to the extent that any such services or facilities 15 for the transmission of messages are furnished for a 16 consideration, by those persons to other persons, for the 17 transmission of messages. 18 "Person" as used in this Section means any natural 19 individual, firm, trust, estate, partnership, association, 20 joint stock company, joint adventure, corporation, limited 21 liability company, municipal corporation, the State or any of 22 its political subdivisions, any State university created by 23 statute, or a receiver, trustee, guardian or other 24 representative appointed by order of any court. 25 "Person maintaining a place of business in this State" 26 shall mean any person having or maintaining within this 27 State, directly or by a subsidiary or other affiliate, an 28 office, generation facility, distribution facility, 29 transmission facility, sales office or other place of 30 business, or any employee, agent, or other representative 31 operating within this State under the authority of the person 32 or its subsidiary or other affiliate, irrespective of whether 33 such place of business or agent or other representative is 34 located in this State permanently or temporarily, or whether HB2379 Engrossed -10- LRB9204175SMdvA 1 such person, subsidiary or other affiliate is licensed or 2 qualified to do business in this State. 3 "Public utility" shall have the meaning ascribed to it in 4 Section 3-105 of the Public Utilities Act and shall include 5 telecommunications carriers as defined in Section 13-202 of 6 that Act and alternative retail electric suppliers as defined 7 in Section 16-102 of that Act. 8 "Purchase at retail" shall mean any acquisition of 9 electricity by a purchaser for purposes of use or 10 consumption, and not for resale, but shall not include the 11 use of electricity by a public utility directly in the 12 generation, production, transmission, delivery or sale of 13 electricity. 14 "Purchaser" shall mean any person who uses or consumes, 15 within the corporate limits of the municipality, electricity 16 acquired in a purchase at retail. 17 In the case of persons engaged in the business of 18 transmitting messages through the use of mobile equipment, 19 such as cellular phones and paging systems, the gross 20 receipts from the business shall be deemed to originate 21 within the corporate limits of a municipality only if the 22 address to which the bills for the service are sent is within 23 those corporate limits. If, however, that address is not 24 located within a municipality that imposes a tax under this 25 Section, then (i) if the party responsible for the bill is 26 not an individual, the gross receipts from the business shall 27 be deemed to originate within the corporate limits of the 28 municipality where that party's principal place of business 29 in Illinois is located, and (ii) if the party responsible for 30 the bill is an individual, the gross receipts from the 31 business shall be deemed to originate within the corporate 32 limits of the municipality where that party's principal 33 residence in Illinois is located. 34 (e) Any municipality that imposes taxes upon public HB2379 Engrossed -11- LRB9204175SMdvA 1 utilities or upon the privilege of using or consuming 2 electricity pursuant to this Section whose territory includes 3 any part of an enterprise zone or federally designated 4 Foreign Trade Zone or Sub-Zone may, by a majority vote of its 5 corporate authorities, exempt from those taxes for a period 6 not exceeding 20 years any specified percentage of gross 7 receipts of public utilities received from, or electricity 8 used or consumed by, business enterprises that: 9 (1) either (i) make investments that cause the 10 creation of a minimum of 200 full-time equivalent jobs in 11 Illinois, (ii) make investments of at least $175,000,000 12 that cause the creation of a minimum of 150 full-time 13 equivalent jobs in Illinois, or (iii) make investments 14 that cause the retention of a minimum of 1,000 full-time 15 jobs in Illinois; and 16 (2) are either (i) located in an Enterprise Zone 17 established pursuant to the Illinois Enterprise Zone Act 18 or (ii) Department of Commerce and Community Affairs 19 designated High Impact Businesses located in a federally 20 designated Foreign Trade Zone or Sub-Zone; and 21 (3) are certified by the Department of Commerce and 22 Community Affairs as complying with the requirements 23 specified in clauses (1) and (2) of this paragraph (e). 24 Upon adoption of the ordinance authorizing the exemption, 25 the municipal clerk shall transmit a copy of that ordinance 26 to the Department of Commerce and Community Affairs. The 27 Department of Commerce and Community Affairs shall determine 28 whether the business enterprises located in the municipality 29 meet the criteria prescribed in this paragraph. If the 30 Department of Commerce and Community Affairs determines that 31 the business enterprises meet the criteria, it shall grant 32 certification. The Department of Commerce and Community 33 Affairs shall act upon certification requests within 30 days 34 after receipt of the ordinance. HB2379 Engrossed -12- LRB9204175SMdvA 1 Upon certification of the business enterprise by the 2 Department of Commerce and Community Affairs, the Department 3 of Commerce and Community Affairs shall notify the Department 4 of Revenue of the certification. The Department of Revenue 5 shall notify the public utilities of the exemption status of 6 the gross receipts received from, and the electricity used or 7 consumed by, the certified business enterprises. Such 8 exemption status shall be effective within 3 months after 9 certification. 10 (f) A municipality that imposes taxes upon public 11 utilities or upon the privilege of using or consuming 12 electricity under this Section and whose territory includes 13 part of another unit of local government or a school district 14 may by ordinance exempt the other unit of local government or 15 school district from those taxes. 16 (g) The amendment of this Section by Public Act 84-127 17 shall take precedence over any other amendment of this 18 Section by any other amendatory Act passed by the 84th 19 General Assembly before the effective date of Public Act 20 84-127. 21 (h) In any case in which, before July 1, 1992, a person 22 engaged in the business of transmitting messages through the 23 use of mobile equipment, such as cellular phones and paging 24 systems, has determined the municipality within which the 25 gross receipts from the business originated by reference to 26 the location of its transmitting or switching equipment, then 27 (i) neither the municipality to which tax was paid on that 28 basis nor the taxpayer that paid tax on that basis shall be 29 required to rebate, refund, or issue credits for any such tax 30 or charge collected from customers to reimburse the taxpayer 31 for the tax and (ii) no municipality to which tax would have 32 been paid with respect to those gross receipts if the 33 provisions of this amendatory Act of 1991 had been in effect 34 before July 1, 1992, shall have any claim against the HB2379 Engrossed -13- LRB9204175SMdvA 1 taxpayer for any amount of the tax. 2 (i) Verification of customer tax liability. When a 3 public utility initially provides to a customer a service 4 that is taxed under this Section, that public utility must 5 confirm whether the customer's use or consumption of the 6 service will take place within the corporate limits of a 7 municipality or, in the case of messages transmitted by means 8 of electricity or radio magnetic waves or fiber optics, 9 whether the origination of the message will take place within 10 the corporate limits of a municipality. If the use or 11 consumption or the origination of the message does not take 12 place within a particular municipality, then that 13 municipality may not impose a tax on the customer and the 14 public utility may not collect a tax from the customer on 15 behalf of that municipality under this Section or, with 16 respect to a type of tax identified in this Section, under 17 any home rule power. 18 (j) Notice to taxpayers concerning municipal boundaries. 19 Each bill sent to a customer for any item subject to a tax 20 imposed under this Section or subject to a type of tax 21 identified in this Section that is imposed under a home rule 22 power must contain a notice, in bold print, stating that the 23 municipal tax may be imposed only with respect to use or 24 consumption within the corporate limits of the municipality 25 or, in the case of messages transmitted by means of 26 electricity or radio magnetic waves or fiber optics, the 27 origination of the message within the corporate limits of the 28 municipality. The notice must state that any person who 29 believes he or she is not subject to the tax should notify 30 the municipality. The municipality must investigate and 31 correct any errors promptly. 32 (Source: P.A. 90-16, eff. 6-16-97; 90-561, eff. 8-1-98; 33 90-562, eff. 12-16-97; 90-655, eff. 7-30-98; 91-870, eff. 34 6-22-00.) HB2379 Engrossed -14- LRB9204175SMdvA 1 Section 99. Effective date. This Act takes effect upon 2 becoming law.
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