Public Act 098-1080
 
HB5684 EnrolledLRB098 16363 HLH 51426 b


  
    AN ACT concerning finance.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  


 
 
    Section 5. If and only if House Bill 2317 of the 98th 
General Assembly becomes law, then the Use Tax Act is amended  
by changing Section 2 as follows:
 



    (35 ILCS 105/2)  (from Ch. 120, par. 439.2)


    Sec. 2. "Use" means the exercise by any person of any right 
or power over
tangible personal property incident to the 
ownership of that property,
except that it does not include the 
sale of such property in any form as
tangible personal property 
in the regular course of business to the extent
that such 
property is not first subjected to a use for which it was

purchased, and does not include the use of such property by its 
owner for
demonstration purposes: Provided that the property 
purchased is deemed to
be purchased for the purpose of resale, 
despite first being used, to the
extent to which it is resold 
as an ingredient of an intentionally produced
product or 
by-product of manufacturing.  "Use" does not mean the 
demonstration
use or interim use of tangible personal property 
by a retailer before he sells
that tangible personal property.  
For watercraft or aircraft, if the period of
demonstration use 
or interim use by the retailer exceeds 18 months,
the retailer

shall pay on the retailers' original cost price the tax imposed 
by this Act,
and no credit for that tax is permitted if the 
watercraft or aircraft is
subsequently sold by the retailer.  
"Use" does not mean the physical
incorporation of tangible 
personal property, to the extent not first subjected
to a use 
for which it was purchased, as an ingredient or constituent, 
into
other tangible personal property (a) which is sold in the 
regular course of
business or (b) which the person 
incorporating such ingredient or constituent
therein has 
undertaken at the time of such purchase to cause to be 
transported
in interstate commerce to destinations outside the 
State of Illinois: Provided
that the property purchased is 
deemed to be purchased for the purpose of
resale, despite first 
being used, to the extent to which it is resold as an

ingredient of an intentionally produced product or by-product 
of manufacturing.

    "Watercraft" means a Class 2, Class 3, or Class 4 
watercraft as defined in
Section 3-2 of the Boat Registration 
and Safety Act, a personal watercraft, or
any boat equipped 
with an inboard motor.

    "Purchase at retail" means the acquisition of the ownership 
of or title
to tangible personal property through a sale at 
retail.

    "Purchaser" means anyone who, through a sale at retail, 
acquires the
ownership of tangible personal property for a 
valuable consideration.

    "Sale at retail" means any transfer of the ownership of or 
title to
tangible personal property to a purchaser, for the 
purpose of use, and not
for the purpose of resale in any form 
as tangible personal property to the
extent not first subjected 
to a use for which it was purchased, for a
valuable 
consideration: Provided that the property purchased is deemed 
to
be purchased for the purpose of resale, despite first being 
used, to the
extent to which it is resold as an ingredient of 
an intentionally produced
product or by-product of 
manufacturing.  For this purpose, slag produced as
an incident 
to manufacturing pig iron or steel and sold is considered to be

an intentionally produced by-product of manufacturing.  "Sale 
at retail"
includes any such transfer made for resale unless 
made in compliance with
Section 2c of the Retailers' Occupation 
Tax Act, as incorporated by
reference into Section 12 of this 
Act.  Transactions whereby the possession
of the property is 
transferred but the seller retains the title as security
for 
payment of the selling price are sales.

    "Sale at retail" shall also be construed to include any 
Illinois
florist's sales transaction in which the purchase 
order is received in
Illinois by a florist and the sale is for 
use or consumption, but the
Illinois florist has a florist in 
another state deliver the property to the
purchaser or the 
purchaser's donee in such other state.

    Nonreusable tangible personal property that is used by 
persons engaged in
the business of operating a restaurant, 
cafeteria, or drive-in is a sale for
resale when it is 
transferred to customers in the ordinary course of business
as 
part of the sale of food or beverages and is used to deliver, 
package, or
consume food or beverages, regardless of where 
consumption of the food or
beverages occurs.  Examples of those 
items include, but are not limited to
nonreusable, paper and 
plastic cups, plates, baskets, boxes, sleeves, buckets
or other 
containers, utensils, straws, placemats, napkins, doggie bags, 
and
wrapping or packaging
materials that are transferred to 
customers as part of the sale of food or
beverages in the 
ordinary course of business.

    The purchase, employment and transfer of such tangible 
personal property
as newsprint and ink for the primary purpose 
of conveying news (with or
without other information) is not a 
purchase, use or sale of tangible
personal property.

    "Selling price" means the consideration for a sale valued 
in money
whether received in money or otherwise, including 
cash, credits, property
other than as hereinafter provided, and 
services, but not including the
value of or credit given for 
traded-in tangible personal property where the
item that is 
traded-in is of like kind and character as that which is being

sold, and shall be determined without any deduction on account 
of the cost
of the property sold, the cost of materials used, 
labor or service cost or
any other expense whatsoever, but does 
not include interest or finance
charges which appear as 
separate items on the bill of sale or sales
contract nor 
charges that are added to prices by sellers on account of the

seller's tax liability under the "Retailers' Occupation Tax 
Act", or on
account of the seller's duty to collect, from the 
purchaser, the tax that
is imposed by this Act, or, except as 
otherwise provided with respect to any cigarette tax imposed by 
a home rule unit, on account of the seller's tax liability 
under any local occupation tax administered by the Department, 
or, except as otherwise provided with respect to any cigarette 
tax imposed by a home rule unit on account of the seller's duty 
to collect, from the purchasers, the tax that is imposed under 
any local use tax administered by the Department. Effective 
December 1, 1985, "selling price"
shall include charges that 
are added to prices by sellers on account of the
seller's tax 
liability under the Cigarette Tax Act, on account of the 
seller's
duty to collect, from the purchaser, the tax imposed 
under the Cigarette Use
Tax Act, and on account of the seller's 
duty to collect, from the purchaser,
any cigarette tax imposed 
by a home rule unit.

    Notwithstanding any law to the contrary, for any motor 
vehicle, as defined in Section 1-146 of the Vehicle Code, that 
is sold on or after January 1, 2015 July 1, 2014 for the 
purpose of leasing the vehicle for a defined period that is 
longer than one year and (1) is a motor vehicle of the second 
division that: (A) is a self-contained motor vehicle designed 
or permanently converted to provide living quarters for 
recreational, camping, or travel use, with direct walk through 
access to the living quarters from the driver's seat; (B) is of 
the van configuration designed for the transportation of not 
less than 7 nor more than 16 passengers; or (C) has a gross 
vehicle weight rating of 8,000 pounds or less or (2) is a motor 
vehicle of the first division, "selling price" or "amount of 
sale" means the consideration received by the lessor pursuant 
to the lease contract, including amounts due at lease signing 
and all monthly or other regular payments charged over the term 
of the lease.  Also included in the selling price is any amount 
received by the lessor from the lessee for the leased vehicle 
that is not calculated at the time the lease is executed, 
including, but not limited to, excess mileage charges and 
charges for excess wear and tear.  For sales that occur in 
Illinois, with respect to any amount received by the lessor 
from the lessee for the leased vehicle that is not calculated 
at the time the lease is executed, the lessor who purchased the 
motor vehicle does not incur the tax imposed by the Use Tax Act 
on those amounts, and the retailer who makes the retail sale of 
the motor vehicle to the lessor is not required to collect the 
tax imposed by this Act or to pay the tax imposed by the 
Retailers' Occupation Tax Act on those amounts.  However, the 
lessor who purchased the motor vehicle assumes the liability 
for reporting and paying the tax on those amounts directly to 
the Department in the same form (Illinois Retailers' Occupation 
Tax, and local retailers' occupation taxes, if applicable) in 
which the retailer would have reported and paid such tax if the 
retailer had accounted for the tax to the Department.  For 
amounts received by the lessor from the lessee that are not 
calculated at the time the lease is executed, the lessor must 
file the return and pay the tax to the Department by the due 
date otherwise required by this Act for returns other than 
transaction returns.  If the retailer is entitled under this Act 
to a discount for collecting and remitting the tax imposed 
under this Act to the Department with respect to the sale of 
the motor vehicle to the lessor, then the right to the discount 
provided in this Act shall be transferred to the lessor with 
respect to the tax paid by the lessor for any amount received 
by the lessor from the lessee for the leased vehicle that is 
not calculated at the time the lease is executed; provided that 
the discount is only allowed if the return is timely filed and 
for amounts timely paid.  The "selling price" of a motor vehicle 
that is sold on or after January 1, 2015 July 1, 2014 for the 
purpose of leasing for a defined period of longer than one year 
shall not be reduced by the value of or credit given for 
traded-in tangible personal property owned by the lessor, nor 
shall it be reduced by the value of or credit given for 
traded-in tangible personal property owned by the lessee, 
regardless of whether the trade-in value thereof is assigned by 
the lessee to the lessor.  In the case of a motor vehicle that 
is sold for the purpose of leasing for a defined period of 
longer than one year, the sale occurs at the time of the 
delivery of the vehicle, regardless of the due date of any 
lease payments. A lessor who incurs a Retailers' Occupation Tax 
liability on the sale of a motor vehicle coming off lease may 
not take a credit against that liability for the Use Tax the 
lessor paid upon the purchase of the motor vehicle (or for any 
tax the lessor paid with respect to any amount received by the 
lessor from the lessee for the leased vehicle that was not 
calculated at the time the lease was executed) if the selling 
price of the motor vehicle at the time of purchase was 
calculated using the definition of "selling price" as defined 
in this paragraph.      Notwithstanding any other provision of this 
Act to the contrary, lessors shall file all returns and make 
all payments required under this paragraph to the Department by 
electronic means in the manner and form as required by the 
Department.  This paragraph does not apply to leases of motor 
vehicles for which, at the time the lease is entered into, the 
term of the lease is not a defined period, including leases 
with a defined initial period with the option to continue the 
lease on a month-to-month or other basis beyond the initial 
defined period. 
    The phrase "like kind and character" shall be liberally 
construed
(including but not limited to any form of motor 
vehicle for any form of
motor vehicle, or any kind of farm or 
agricultural implement for any other
kind of farm or 
agricultural implement), while not including a kind of item

which, if sold at retail by that retailer, would be exempt from 
retailers'
occupation tax and use tax as an isolated or 
occasional sale.

    "Department" means the Department of Revenue.

    "Person" means any natural individual, firm, partnership, 
association,
joint stock company, joint adventure, public or 
private corporation, limited
liability company, or a
receiver, 
executor, trustee, guardian or other representative appointed

by order of any court.

    "Retailer" means and includes every person engaged in the 
business of
making sales at retail as defined in this Section.

    A person who holds himself or herself out as being engaged 
(or who habitually
engages) in selling tangible personal 
property at retail is a retailer
hereunder with respect to such 
sales (and not primarily in a service
occupation) 
notwithstanding the fact that such person designs and produces

such tangible personal property on special order for the 
purchaser and in
such a way as to render the property of value 
only to such purchaser, if
such tangible personal property so 
produced on special order serves
substantially the same 
function as stock or standard items of tangible
personal 
property that are sold at retail.

    A person whose activities are organized and conducted 
primarily as a
not-for-profit service enterprise, and who 
engages in selling tangible
personal property at retail 
(whether to the public or merely to members and
their guests) 
is a retailer with respect to such transactions, excepting
only 
a person organized and operated exclusively for charitable, 
religious
or educational purposes either (1), to the extent of 
sales by such person
to its members, students, patients or 
inmates of tangible personal property
to be used primarily for 
the purposes of such person, or (2), to the extent
of sales by 
such person of tangible personal property which is not sold or

offered for sale by persons organized for profit.  The selling 
of school
books and school supplies by schools at retail to 
students is not
"primarily for the purposes of" the school 
which does such selling.  This
paragraph does not apply to nor 
subject to taxation occasional dinners,
social or similar 
activities of a person organized and operated exclusively
for 
charitable, religious or educational purposes, whether or not 
such
activities are open to the public.

    A person who is the recipient of a grant or contract under 
Title VII of
the Older Americans Act of 1965 (P.L. 92-258) and 
serves meals to
participants in the federal Nutrition Program 
for the Elderly in return for
contributions established in 
amount by the individual participant pursuant
to a schedule of 
suggested fees as provided for in the federal Act is not a

retailer under this Act with respect to such transactions.

    Persons who engage in the business of transferring tangible 
personal
property upon the redemption of trading stamps are 
retailers hereunder when
engaged in such business.

    The isolated or occasional sale of tangible personal 
property at retail
by a person who does not hold himself out as 
being engaged (or who does not
habitually engage) in selling 
such tangible personal property at retail or
a sale through a 
bulk vending machine does not make such person a retailer

hereunder.  However, any person who is engaged in a business 
which is not
subject to the tax imposed by the "Retailers' 
Occupation Tax Act" because
of involving the sale of or a 
contract to sell real estate or a
construction contract to 
improve real estate, but who, in the course of
conducting such 
business, transfers tangible personal property to users or

consumers in the finished form in which it was purchased, and 
which does
not become real estate, under any provision of a 
construction contract or
real estate sale or real estate sales 
agreement entered into with some
other person arising out of or 
because of such nontaxable business, is a
retailer to the 
extent of the value of the tangible personal property so

transferred.  If, in such transaction, a separate charge is made 
for the
tangible personal property so transferred, the value of 
such property, for
the purposes of this Act, is the amount so 
separately charged, but not less
than the cost of such property 
to the transferor; if no separate charge is
made, the value of 
such property, for the purposes of this Act, is the cost
to the 
transferor of such tangible personal property.

    "Retailer maintaining a place of business in this State", 
or any like
term, means and includes any of the following 
retailers:


        1. A retailer having or maintaining within this State, 
    directly or by
a subsidiary, an office, distribution house, 
    sales house, warehouse or other
place of business, or any 
    agent or other representative operating within this
State 
    under the authority of the retailer or its subsidiary, 
    irrespective of
whether such place of business or agent or 
    other representative is located here
permanently or 
    temporarily, or whether such retailer or subsidiary is 
    licensed
to do business in this State. However, the 
    ownership of property that is
located at the premises of a 
    printer with which the retailer has contracted for
printing 
    and that consists of the final printed product, property 
    that becomes
a part of the final printed product, or copy 
    from which the printed product is
produced shall not result 
    in the retailer being deemed to have or maintain an
office, 
    distribution house, sales house, warehouse, or other place 
    of business
within this State.
        1.1. Beginning July 1, 2011, a retailer having a 
    contract with a person located in this State under which 
    the person, for a commission or other consideration based 
    upon the sale of tangible personal property by the 
    retailer, directly or indirectly refers potential 
    customers to the retailer by a link on the person's 
    Internet website.  The provisions of this paragraph 1.1 
    shall apply only if the cumulative gross receipts from 
    sales of tangible personal property by the retailer to 
    customers who are referred to the retailer by all persons 
    in this State under such contracts exceed $10,000 during 
    the preceding 4 quarterly periods ending on the last day of 
    March, June, September, and December.
        1.2. Beginning July 1, 2011, a retailer having a 
    contract with a person located in this State under which:
            A. the retailer sells the same or substantially 
        similar line of products as the person located in this 
        State and does so using an identical or substantially 
        similar name, trade name, or trademark as the person 
        located in this State; and
            B. the retailer provides a commission or other 
        consideration to the person located in this State based 
        upon the sale of tangible personal property by the 
        retailer.
    The provisions of this paragraph 1.2 shall apply only if 
    the cumulative gross receipts from sales of tangible 
    personal property by the retailer to customers in this 
    State under all such contracts exceed $10,000 during the 
    preceding 4 quarterly periods ending on the last day of 
    March, June, September, and December. 


        2. A retailer soliciting orders for tangible personal 
    property by
means of a telecommunication or television 
    shopping system (which utilizes toll
free numbers) which is 
    intended by the retailer to be broadcast by cable

    television or other means of broadcasting, to consumers 
    located in this State.


        3. A retailer, pursuant to a contract with a 
    broadcaster or publisher
located in this State, soliciting 
    orders for tangible personal property by
means of 
    advertising which is disseminated primarily to consumers 
    located in
this State and only secondarily to bordering 
    jurisdictions.


        4. A retailer soliciting orders for tangible personal 
    property by mail
if the solicitations are substantial and 
    recurring and if the retailer benefits
from any banking, 
    financing, debt collection, telecommunication, or 
    marketing
activities occurring in this State or benefits 
    from the location in this State
of authorized installation, 
    servicing, or repair facilities.


        5. A retailer that is owned or controlled by the same 
    interests that own
or control any retailer engaging in 
    business in the same or similar line of
business in this 
    State.


        6. A retailer having a franchisee or licensee operating 
    under its trade
name if the franchisee or licensee is 
    required to collect the tax under this
Section.


        7. A retailer, pursuant to a contract with a cable 
    television operator
located in this State, soliciting 
    orders for tangible personal property by
means of 
    advertising which is transmitted or distributed over a 
    cable
television system in this State.


        8. A retailer engaging in activities in Illinois, which 
    activities in
the state in which the retail business 
    engaging in such activities is located
would constitute 
    maintaining a place of business in that state.

    "Bulk vending machine" means a vending machine,
containing 
unsorted confections, nuts, toys, or other items designed

primarily to be used or played with by children
which, when a 
coin or coins of a denomination not larger than $0.50 are 
inserted, are dispensed in equal portions, at random and

without selection by the customer.

(Source: P.A. 95-723, eff. 6-23-08; 96-1544, eff. 3-10-11; 
09800HB2317enr.)

 
    Section 10. If and only if House Bill 2317 of the 98th 
General Assembly becomes law, then the Retailers' Occupation 
Tax Act is amended  by changing Section 1 as follows:
 



    (35 ILCS 120/1)  (from Ch. 120, par. 440)


    Sec. 1. Definitions. "Sale at retail" means any transfer of 
the
ownership of or title to
tangible personal property to a 
purchaser, for the purpose of use or
consumption, and not for 
the purpose of resale in any form as tangible
personal property 
to the extent not first subjected to a use for which it
was 
purchased, for a valuable consideration:  Provided that the 
property
purchased is deemed to be purchased for the purpose of 
resale, despite
first being used, to the extent to which it is 
resold as an ingredient of
an intentionally produced product or 
byproduct of manufacturing.  For this
purpose, slag produced as 
an incident to manufacturing pig iron or steel
and sold is 
considered to be an intentionally produced byproduct of

manufacturing.  Transactions whereby the possession of the 
property is
transferred but the seller retains the title as 
security for payment of the
selling price shall be deemed to be 
sales.

    "Sale at retail" shall be construed to include any transfer 
of the
ownership of or title to tangible personal property to a 
purchaser, for use
or consumption by any other person to whom 
such purchaser may transfer the
tangible personal property 
without a valuable consideration, and to include
any transfer, 
whether made for or without a valuable consideration, for

resale in any form as tangible personal property unless made in 
compliance
with Section 2c of this Act.

    Sales of tangible personal property, which property, to the 
extent not
first subjected to a use for which it was purchased, 
as an ingredient or
constituent, goes into and forms a part of 
tangible personal property
subsequently the subject of a "Sale 
at retail", are not sales at retail as
defined in this Act:  
Provided that the property purchased is deemed to be
purchased 
for the purpose of resale, despite first being used, to the

extent to which it is resold as an ingredient of an 
intentionally produced
product or byproduct of manufacturing.

    "Sale at retail" shall be construed to include any Illinois 
florist's
sales transaction in which the purchase order is 
received in Illinois by a
florist and the sale is for use or 
consumption, but the Illinois florist
has a florist in another 
state deliver the property to the purchaser or the
purchaser's 
donee in such other state.

    Nonreusable tangible personal property that is used by 
persons engaged in
the business of operating a restaurant, 
cafeteria, or drive-in is a sale for
resale when it is 
transferred to customers in the ordinary course of business
as 
part of the sale of food or beverages and is used to deliver, 
package, or
consume food or beverages, regardless of where 
consumption of the food or
beverages occurs.  Examples of those 
items include, but are not limited to
nonreusable, paper and 
plastic cups, plates, baskets, boxes, sleeves, buckets
or other 
containers, utensils, straws, placemats, napkins, doggie bags, 
and
wrapping or packaging
materials that are transferred to 
customers as part of the sale of food or
beverages in the 
ordinary course of business.

    The purchase, employment and transfer of such tangible 
personal property
as newsprint and ink for the primary purpose 
of conveying news (with or
without other information) is not a 
purchase, use or sale of tangible
personal property.

    A person whose activities are organized and conducted 
primarily as a
not-for-profit service enterprise, and who 
engages in selling tangible
personal property at retail 
(whether to the public or merely to members and
their guests) 
is engaged in the business of selling tangible personal

property at retail with respect to such transactions, excepting 
only a
person organized and operated exclusively for 
charitable, religious or
educational purposes either (1), to 
the extent of sales by such person to
its members, students, 
patients or inmates of tangible personal property to
be used 
primarily for the purposes of such person, or (2), to the 
extent of
sales by such person of tangible personal property 
which is not sold or
offered for sale by persons organized for 
profit.  The selling of school
books and school supplies by 
schools at retail to students is not
"primarily for the 
purposes of" the school which does such selling.  The
provisions 
of this paragraph shall not apply to nor subject to taxation

occasional dinners, socials or similar activities of a person 
organized and
operated exclusively for charitable, religious 
or educational purposes,
whether or not such activities are 
open to the public.

    A person who is the recipient of a grant or contract under 
Title VII of
the Older Americans Act of 1965 (P.L. 92-258) and 
serves meals to
participants in the federal Nutrition Program 
for the Elderly in return for
contributions established in 
amount by the individual participant pursuant
to a schedule of 
suggested fees as provided for in the federal Act is not

engaged in the business of selling tangible personal property 
at retail
with respect to such transactions.

    "Purchaser" means anyone who, through a sale at retail, 
acquires the
ownership of or title to tangible personal 
property for a valuable
consideration.

    "Reseller of motor fuel" means any person engaged in the 
business of selling
or delivering or transferring title of 
motor fuel to another person
other than for use or consumption.

No person shall act as a reseller of motor fuel within this 
State without
first being registered as a reseller pursuant to 
Section 2c or a retailer
pursuant to Section 2a.

    "Selling price" or the "amount of sale" means the 
consideration for a
sale valued in money whether received in 
money or otherwise, including
cash, credits, property, other 
than as hereinafter provided, and services,
but not including 
the value of or credit given for traded-in tangible
personal 
property where the item that is traded-in is of like kind and

character as that which is being sold, and shall be determined 
without any
deduction on account of the cost of the property 
sold, the cost of
materials used, labor or service cost or any 
other expense whatsoever, but
does not include charges that are 
added to prices by sellers on account of
the seller's tax 
liability under this Act, or on account of the seller's
duty to 
collect, from the purchaser, the tax that is imposed by the Use 
Tax
Act, or, except as otherwise provided with respect to any 
cigarette tax imposed by a home rule unit, on account of the 
seller's tax liability under any local occupation tax 
administered by the Department, or, except as otherwise 
provided with respect to any cigarette tax imposed by a home 
rule unit on account of the seller's duty to collect, from the 
purchasers, the tax that is imposed under any local use tax 
administered by the Department.
Effective December 1, 1985, 
"selling price" shall include charges that
are added to prices 
by sellers on account of the seller's
tax liability under the 
Cigarette Tax Act, on account of the sellers'
duty to collect, 
from the purchaser, the tax imposed under the Cigarette
Use Tax 
Act, and on account of the seller's duty to collect, from the

purchaser, any cigarette tax imposed by a home rule unit.

    Notwithstanding any law to the contrary, for any motor 
vehicle, as defined in Section 1-146 of the Vehicle Code, that 
is sold on or after January 1, 2015 July 1, 2014 for the 
purpose of leasing the vehicle for a defined period that is 
longer than one year and (1) is a motor vehicle of the second 
division that: (A) is a self-contained motor vehicle designed 
or permanently converted to provide living quarters for 
recreational, camping, or travel use, with direct walk through 
access to the living quarters from the driver's seat; (B) is of 
the van configuration designed for the transportation of not 
less than 7 nor more than 16 passengers; or (C) has a gross 
vehicle weight rating of 8,000 pounds or less or (2) is a motor 
vehicle of the first division, "selling price" or "amount of 
sale" means the consideration received by the lessor pursuant 
to the lease contract, including amounts due at lease signing 
and all monthly or other regular payments charged over the term 
of the lease.  Also included in the selling price is any amount 
received by the lessor from the lessee for the leased vehicle 
that is not calculated at the time the lease is executed, 
including, but not limited to, excess mileage charges and 
charges for excess wear and tear.  For sales that occur in 
Illinois, with respect to any amount received by the lessor 
from the lessee for the leased vehicle that is not calculated 
at the time the lease is executed, the lessor who purchased the 
motor vehicle does not incur the tax imposed by the Use Tax Act 
on those amounts, and the retailer who makes the retail sale of 
the motor vehicle to the lessor is not required to collect the 
tax imposed by the Use Tax Act or to pay the tax imposed by this 
Act on those amounts.  However, the lessor who purchased the 
motor vehicle assumes the liability for reporting and paying 
the tax on those amounts directly to the Department in the same 
form (Illinois Retailers' Occupation Tax, and local retailers' 
occupation taxes, if applicable) in which the retailer would 
have reported and paid such tax if the retailer had accounted 
for the tax to the Department.  For amounts received by the 
lessor from the lessee that are not calculated at the time the 
lease is executed, the lessor must file the return and pay the 
tax to the Department by the due date otherwise required by 
this Act for returns other than transaction returns.  If the 
retailer is entitled under this Act to a discount for 
collecting and remitting the tax imposed under this Act to the 
Department with respect to the sale of the motor vehicle to the 
lessor, then the right to the discount provided in this Act 
shall be transferred to the lessor with respect to the tax paid 
by the lessor for any amount received by the lessor from the 
lessee for the leased vehicle that is not calculated at the 
time the lease is executed; provided that the discount is only 
allowed if the return is timely filed and for amounts timely 
paid.  The "selling price" of a motor vehicle that is sold on or 
after January 1, 2015 July 1, 2014 for the purpose of leasing 
for a defined period of longer than one year shall not be 
reduced by the value of or credit given for traded-in tangible 
personal property owned by the lessor, nor shall it be reduced 
by the value of or credit given for traded-in tangible personal 
property owned by the lessee, regardless of whether the 
trade-in value thereof is assigned by the lessee to the lessor.  
In the case of a motor vehicle that is sold for the purpose of 
leasing for a defined period of longer than one year, the sale 
occurs at the time of the delivery of the vehicle, regardless 
of the due date of any lease payments. A lessor who incurs a 
Retailers' Occupation Tax liability on the sale of a motor 
vehicle coming off lease may not take a credit against that 
liability for the Use Tax the lessor paid upon the purchase of 
the motor vehicle (or for any tax the lessor paid with respect 
to any amount received by the lessor from the lessee for the 
leased vehicle that was not calculated at the time the lease 
was executed) if the selling price of the motor vehicle at the 
time of purchase was calculated using the definition of 
"selling price" as defined in this paragraph.

Notwithstanding 
any other provision of this Act to the contrary, lessors shall 
file all returns and make all payments required under this 
paragraph to the Department by electronic means in the manner 
and form as required by the Department.  This paragraph does not 
apply to leases of motor vehicles for which, at the time the 
lease is entered into, the term of the lease is not a defined 
period, including leases with a defined initial period with the 
option to continue the lease on a month-to-month or other basis 
beyond the initial defined period. 
    The phrase "like kind and character" shall be liberally 
construed
(including but not limited to any form of motor 
vehicle for any form of
motor vehicle, or any kind of farm or 
agricultural implement for any other
kind of farm or 
agricultural implement), while not including a kind of item

which, if sold at retail by that retailer, would be exempt from 
retailers'
occupation tax and use tax as an isolated or 
occasional sale.

    "Gross receipts" from the sales of tangible personal 
property at retail
means the total selling price or the amount 
of such sales, as hereinbefore
defined.  In the case of charge 
and time sales, the amount thereof shall be
included only as 
and when payments are received by the seller.
Receipts or other 
consideration derived by a seller from
the sale, transfer or 
assignment of accounts receivable to a wholly owned
subsidiary 
will not be deemed payments prior to the time the purchaser

makes payment on such accounts.

    "Department" means the Department of Revenue.

    "Person" means any natural individual, firm, partnership, 
association,
joint stock company, joint adventure, public or 
private corporation, limited
liability company, or a receiver, 
executor, trustee, guardian or other
representative appointed 
by order of any court.

    The isolated or occasional sale of tangible personal 
property at retail
by a person who does not hold himself out as 
being engaged (or who does not
habitually engage) in selling 
such tangible personal property at retail, or
a sale through a 
bulk vending machine, does not constitute engaging in a

business of selling such tangible personal property at retail 
within the
meaning of this Act; provided that any person who is 
engaged in a business
which is not subject to the tax imposed 
by this Act because of involving
the sale of or a contract to 
sell real estate or a construction contract to
improve real 
estate or a construction contract to engineer, install, and

maintain an integrated system of products, but who, in the 
course of
conducting such business,
transfers tangible 
personal property to users or consumers in the finished
form in 
which it was purchased, and which does not become real estate 
or was
not engineered and installed, under any provision of a 
construction contract or
real estate sale or real estate sales 
agreement entered into with some other
person arising out of or 
because of such nontaxable business, is engaged in the
business 
of selling tangible personal property at retail to the extent 
of the
value of the tangible personal property so transferred. 
If, in such a
transaction, a separate charge is made for the 
tangible personal property so
transferred, the value of such 
property, for the purpose of this Act, shall be
the amount so 
separately charged, but not less than the cost of such property

to the transferor; if no separate charge is made, the value of 
such property,
for the purposes of this Act, is the cost to the 
transferor of such tangible
personal property. Construction 
contracts for the improvement of real estate
consisting of 
engineering, installation, and maintenance of voice, data, 
video,
security, and all telecommunication systems do not 
constitute engaging in a
business of selling tangible personal 
property at retail within the meaning of
this Act if they are 
sold at one specified contract price.

    A person who holds himself or herself out as being engaged 
(or who habitually
engages) in selling tangible personal 
property at retail is a person
engaged in the business of 
selling tangible personal property at retail
hereunder with 
respect to such sales (and not primarily in a service

occupation) notwithstanding the fact that such person designs 
and produces
such tangible personal property on special order 
for the purchaser and in
such a way as to render the property 
of value only to such purchaser, if
such tangible personal 
property so produced on special order serves
substantially the 
same function as stock or standard items of tangible
personal 
property that are sold at retail.

    Persons who engage in the business of transferring tangible 
personal
property upon the redemption of trading stamps are 
engaged in the business
of selling such property at retail and 
shall be liable for and shall pay
the tax imposed by this Act 
on the basis of the retail value of the
property transferred 
upon redemption of such stamps.

    "Bulk vending machine" means a vending machine,
containing 
unsorted confections, nuts, toys, or other items designed

primarily to be used or played with by children
which, when a 
coin or coins of a denomination not larger than $0.50 are

inserted, are dispensed in equal portions, at random and

without selection by the customer.

(Source: P.A. 95-723, eff. 6-23-08; 09800HB2317enr.)



 
    Section 15. The Illinois Vehicle Code is amended  by 
changing Section 5-501 as follows:
 



    (625 ILCS 5/5-501)  (from Ch. 95 1/2, par. 5-501)



    Sec. 5-501. Denial, suspension or revocation or 
cancellation of a license. 
    (a) The license of a person issued under this Chapter may 
be denied,
revoked or suspended if the Secretary of State finds 
that the applicant,
or the officer, director, shareholder 
having a ten percent or
greater ownership interest in the 
corporation, owner, partner, trustee,
manager, employee or the 
licensee
has:

        1.  Violated this Act;

        2.  Made any material misrepresentation to the 
    Secretary of State in
connection with an application for a 
    license, junking certificate,
salvage certificate, title 
    or registration;

        3.  Committed a fraudulent act in connection with 
    selling,
bartering, exchanging, offering for sale or 
    otherwise dealing in
vehicles, chassis, essential parts, 
    or vehicle shells;

        4. As a new vehicle dealer has no contract with a 
    manufacturer or
enfranchised distributor to sell that new 
    vehicle in this State;

        5. Not maintained an established place of business as 
    defined in
this Code;

        6. Failed to file or produce for the Secretary of State 
    any
application, report, document or other pertinent 
    books, records,
documents, letters, contracts, required to 
    be filed or produced under
this Code or any rule or 
    regulation made by the Secretary of State
pursuant to this 
    Code;

        7. Previously had, within 3 years, such a license 
    denied, suspended,
revoked, or cancelled under the 
    provisions of subsection (c)(2)
of this Section;

        8. Has committed in any calendar year 3 or more 
    violations, as
determined in any civil or criminal 
    proceeding, of any one or more of
the following Acts:

            a. the "Consumer Finance Act";

            b. the "Consumer Installment Loan Act";

            c. the "Retail Installment Sales Act";

            d. the "Motor Vehicle Retail Installment Sales 
        Act";

            e. "An Act in relation to the rate of interest and 
        other charges in
connection with sales on credit and 
        the lending of money", approved May
24, 1879, as 
        amended;

            f. "An Act to promote the welfare of wage-earners 
        by regulating the
assignment of wages, and prescribing 
        a penalty for the violation
thereof", approved July 1, 
        1935, as amended;

            g. Part 8 of Article XII of the Code of Civil 
        Procedure; or

            h. the "Consumer Fraud Act";

        9. Failed to pay any fees or taxes due under this Act, 
    or has
failed to transmit any fees or taxes received by him 
    for transmittal by
him to the Secretary of State or the 
    State of Illinois;

        10. Converted an abandoned vehicle;

        11. Used a vehicle identification plate or number 
    assigned to a
vehicle other than the one to which 
    originally assigned;

        12. Violated the provisions of Chapter 5 of this Act, 
    as amended;

        13. Violated the provisions of Chapter 4 of this Act, 
    as amended;

        14. Violated the provisions of Chapter 3 of this Act, 
    as amended;

        15. Violated Section 21-2 of the Criminal Code of 1961 
    or the Criminal Code of 2012, Criminal Trespass
to 
    Vehicles;

        16. Made or concealed a material fact in connection 
    with his application
for a license;

        17. Acted in the capacity of a person licensed or acted 
    as a licensee
under this Chapter without having a license 
    therefor;

        18. Failed to pay, within 90 days after a final 
    judgment, any fines
assessed against the licensee pursuant 
    to an action brought under Section 5-404;

        19. Failed to pay the Dealer Recovery Trust Fund fee 
    under Section 5-102.7 of this Code;
        20.  Failed to pay, within 90 days after notice has been 
    given, any fine or fee owed as a result of an 
    administrative citation issued by the Secretary under this 
    Code. 
    (b) In addition to other grounds specified in this Chapter, 
the
Secretary of State, on complaint of the Department of 
Revenue, shall
refuse the issuance or renewal of a license, or 
suspend or revoke such
license, for any of the following 
violations of the "Retailers'
Occupation Tax Act", the tax 
imposed on corporations under subsection (b) of Section 201 of 
the Illinois Income Tax Act, the Personal Property Tax 
Replacement Income Tax imposed under subsections (c) and (d) of 
Section 201 of the Illinois Income Tax Act, or the tax imposed 
under Section 704A of the Illinois Income Tax Act:

        1. Failure to make a tax return;

        2. The filing of a fraudulent return;

        3. Failure to pay all or part of any tax or penalty 
    finally
determined to be due;

        4. Failure to comply with the bonding requirements of 
    the
"Retailers' Occupation Tax Act".

    (b-1) In addition to other grounds specified in this 
Chapter, the
Secretary of State, on complaint of the Motor 
Vehicle Review Board, shall
refuse the issuance or renewal of a 
license, or suspend or revoke that
license, if costs or fees 
assessed under Section 29 or Section 30 of the Motor Vehicle 
Franchise Act have remained unpaid for a period in excess of 90 
days after the licensee received from the Motor Vehicle Board a 
second notice and demand for the costs or fees.  The Motor 
Vehicle Review Board must send the licensee written notice and 
demand for payment of the fees or costs at least 2 times, and 
the second notice and demand must be sent by certified mail.

    (c) Cancellation of a license.

        1. The license of a person issued under this Chapter 
    may be cancelled
by the Secretary of State prior to its 
    expiration in any of the following
situations:

            A. When a license is voluntarily surrendered, by 
        the licensed person;
or 

            B. If the business enterprise is a sole 
        proprietorship, which is not a
franchised dealership, 
        when the sole proprietor dies or is imprisoned for
any 
        period of  time exceeding 30 days; or

            C. If the license was issued to the wrong person or 
        corporation, or
contains an error on its face.  If any 
        person above whose license
has been cancelled wishes to 
        apply for another license, whether during the
same 
        license year or any other year, that person shall be 
        treated as any
other new applicant and the cancellation 
        of the person's prior license
shall not, in and of 
        itself, be a bar to the issuance of a new license.

        2. The license of a person issued under this Chapter 
    may be cancelled
without a hearing when the Secretary of 
    State is notified that the
applicant, or any officer, 
    director, shareholder having a 10 per cent or
greater 
    ownership interest in the corporation, owner, partner, 
    trustee,
manager, employee or member of the applicant or 
    the licensee has been
convicted of any felony involving the 
    selling, bartering, exchanging,
offering for sale, or 
    otherwise dealing in vehicles, chassis, essential
parts, 
    vehicle shells, or ownership documents relating to any of 
    the
above items.

(Source: P.A. 97-480, eff. 10-1-11; 97-838, eff. 7-20-12; 
97-1150, eff. 1-25-13.)

 
    Section 99. Effective date. This Act takes effect upon 
becoming law.

Effective Date:  8/26/2014