Public Act 90-0357 of the 90th General Assembly
Public Act 90-0357
HB0468 Enrolled LRB9001639DNkbA
AN ACT to amend the Illinois Municipal Code by changing
Section 8-11-17.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Municipal Code is amended by
changing Section 8-11-17 as follows:
(65 ILCS 5/8-11-17) (from Ch. 24, par. 8-11-17)
Sec. 8-11-17. Municipal telecommunications tax.
(a) Beginning on the effective date of this amendatory
Act of 1991, the corporate authorities of any municipality in
this State may tax any or all of the following acts or
privileges:
(1) The act or privilege of originating in such
municipality or receiving in such municipality intrastate
telecommunications by a person at a rate not to exceed 5%
of the gross charge for such telecommunications purchased
at retail from a retailer by such person. However, such
tax is not imposed on such act or privilege to the extent
such act or privilege may not, under the Constitution and
statutes of the United States, be made the subject of
taxation by municipalities in this State.
(2) The act or privilege of originating in such
municipality or receiving in such municipality interstate
telecommunications by a person at a rate not to exceed 5%
of the gross charge for such telecommunications purchased
at retail from a retailer by such person. To prevent
actual multi-state taxation of the act or privilege that
is subject to taxation under this paragraph, any
taxpayer, upon proof that the taxpayer has paid a tax in
another state on such event, shall be allowed a credit
against any tax enacted pursuant to an ordinance
authorized by this paragraph to the extent of the amount
of such tax properly due and paid in such other state
which was not previously allowed as a credit against any
other state or local tax in this State. However, such
tax is not imposed on the act or privilege to the extent
such act or privilege may not, under the Constitution and
statutes of the United States, be made the subject of
taxation by municipalities in this State.
(3) The taxes authorized by paragraphs (1) and (2)
of subsection (a) of this Section may only be levied if
such municipality does not then have in effect an
occupation tax imposed on persons engaged in the business
of transmitting messages by means of electricity as
authorized by Section 8-11-2 of the Illinois Municipal
Code.
(b) The tax authorized by this Section shall be
collected from the taxpayer by a retailer maintaining a place
of business in this State and making or effectuating the sale
at retail and shall be remitted by such retailer to the
municipality. Any tax required to be collected pursuant to
an ordinance authorized by this Section and any such tax
collected by such retailer shall constitute a debt owed by
the retailer to such municipality. Retailers shall collect
the tax from the taxpayer by adding the tax to the gross
charge for the act or privilege of originating or receiving
telecommunications when sold for use, in the manner
prescribed by the municipality. The tax authorized by this
Section shall constitute a debt of the purchaser to the
retailer who provides such taxable services until paid and,
if unpaid, is recoverable at law in the same manner as the
original charge for such taxable services. If the retailer
fails to collect the tax from the taxpayer, then the taxpayer
shall be required to pay the tax directly to the municipality
in the manner provided by the municipality. The municipality
imposing the tax shall provide for its administration and
enforcement.
Beginning January 1, 1994, retailers filing tax returns
pursuant to this Section shall, at the time of filing such
return, pay to the municipality the amount of the tax imposed
by this Section, less a commission of 1.75% which is allowed
to reimburse the retailer for the expenses incurred in
keeping records, billing the customer, preparing and filing
returns, remitting the tax and supplying data to the
municipality upon request. No commission may be claimed by a
retailer for tax not timely remitted to the municipality.
Whenever possible, the tax authorized by this Section
shall, when collected, be stated as a distinct item separate
and apart from the gross charge for telecommunications.
(c) For the purpose of the taxes authorized by this
Section:
(1) "Amount paid" means the amount charged to the
taxpayer's service address in such municipality
regardless of where such amount is billed or paid.
(2) "Gross charge" means the amount paid for the
act or privilege of originating or receiving
telecommunications in such municipality and for all
services rendered in connection therewith, valued in
money whether paid in money or otherwise, including cash,
credits, services and property of every kind or nature,
and shall be determined without any deduction on account
of the cost of such telecommunications, the cost of the
materials used, labor or service costs or any other
expense whatsoever. In case credit is extended, the
amount thereof shall be included only as and when paid.
However, "gross charge" shall not include:
(A) any amounts added to a purchaser's bill
because of a charge made pursuant to: (i) the tax
imposed by this Section, (ii) additional charges
added to a purchaser's bill pursuant to Section
9-222 of the Public Utilities Act, (iii) the tax
imposed by the Telecommunications Excise Tax Act, or
(iv) the tax imposed by Section 4251 of the Internal
Revenue Code;
(B) charges for a sent collect
telecommunication received outside of such
municipality;
(C) charges for leased time on equipment or
charges for the storage of data or information or
subsequent retrieval or the processing of data or
information intended to change its form or content.
Such equipment includes, but is not limited to, the
use of calculators, computers, data processing
equipment, tabulating equipment or accounting
equipment and also includes the usage of computers
under a time-sharing agreement;
(D) charges for customer equipment, including
such equipment that is leased or rented by the
customer from any source, wherein such charges are
disaggregated and separately identified from other
charges;
(E) charges to business enterprises certified
under Section 9-222.1 of the Public Utilities Act to
the extent of such exemption and during the period
of time specified by the Department of Commerce and
Community Affairs;
(F) charges for telecommunications and all
services and equipment provided in connection
therewith between a parent corporation and its
wholly owned subsidiaries or between wholly owned
subsidiaries when the tax imposed under this Section
has already been paid to a retailer and only to the
extent that the charges between the parent
corporation and wholly owned subsidiaries or between
wholly owned subsidiaries represent expense
allocation between the corporations and not the
generation of profit for the corporation rendering
such service;
(G) bad debts ("bad debt" means any portion of
a debt that is related to a sale at retail for which
gross charges are not otherwise deductible or
excludable that has become worthless or
uncollectable, as determined under applicable
federal income tax standards; if the portion of the
debt deemed to be bad is subsequently paid, the
retailer shall report and pay the tax on that
portion during the reporting period in which the
payment is made); or
(H) charges paid by inserting coins in
coin-operated telecommunication devices.
(3) "Interstate telecommunications" means all
telecommunications that either originate or terminate
outside this State.
(4) "Intrastate telecommunications" means all
telecommunications that originate and terminate within
this State.
(5) "Person" means any natural individual, firm,
trust, estate, partnership, association, joint stock
company, joint venture, corporation, limited liability
company, or a receiver, trustee, guardian or other
representative appointed by order of any court, the
Federal and State governments, including State
universities created by statute, or any city, town,
county, or other political subdivision of this State.
(6) "Purchase at retail" means the acquisition,
consumption or use of telecommunications through a sale
at retail.
(7) "Retailer" means and includes every person
engaged in the business of making sales at retail as
defined in this Section. A municipality may, in its
discretion, upon application, authorize the collection of
the tax hereby imposed by any retailer not maintaining a
place of business within this State, who to the
satisfaction of the municipality, furnishes adequate
security to insure collection and payment of the tax.
Such retailer shall be issued, without charge, a permit
to collect such tax. When so authorized, it shall be the
duty of such retailer to collect the tax upon all of the
gross charges for telecommunications in such municipality
in the same manner and subject to the same requirements
as a retailer maintaining a place of business within such
municipality.
(8) "Retailer maintaining a place of business in
this State", or any like term, means and includes any
retailer having or maintaining within this State,
directly or by a subsidiary, an office, distribution
facilities, transmission facilities, sales office,
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.
(9) "Sale at retail" means the transmitting,
supplying or furnishing of telecommunications and all
services rendered in connection therewith for a
consideration, to persons other than the Federal and
State governments, and State universities created by
statute and other than between a parent corporation and
its wholly owned subsidiaries or between wholly owned
subsidiaries, when the tax has already been paid to a
retailer and the gross charge made by one such
corporation to another such corporation is not greater
than the gross charge paid to the retailer for their use
or consumption and not for resale.
(10) "Service address" means the location of
telecommunications equipment from which
telecommunications services are originated or at which
telecommunications services are received by a taxpayer.
If this is not a defined location, as in the case of
mobile phones, paging systems, maritime systems,
air-to-ground systems and the like, "service address"
shall mean the location of a taxpayer's primary use of
the telecommunication equipment as defined by telephone
number, authorization code, or location in Illinois where
bills are sent.
(11) "Taxpayer" means a person who individually or
through his agents, employees, or permittees engages in
the act or privilege of originating in such municipality
or receiving in such municipality telecommunications and
who incurs a tax liability under any ordinance authorized
by this Section.
(12) "Telecommunications", in addition to the usual
and popular meaning, includes, but is not limited to,
messages or information transmitted through use of local,
toll and wide area telephone service, channel services,
telegraph services, teletypewriter service, computer
exchange services; cellular mobile telecommunications
service, specialized mobile radio services, paging
service, or any other form of mobile and portable one-way
or two-way communications, or any other transmission of
messages or information by electronic or similar means,
between or among points by wire, cable, fiber optics,
laser, microwave, radio, satellite or similar facilities.
The definition of "telecommunications" shall not include
value added services in which computer processing
applications are used to act on the form, content, code
and protocol of the information for purposes other than
transmission. "Telecommunications" shall not include
purchase of telecommunications by a telecommunications
service provider for use as a component part of the
service provided by him to the ultimate retail consumer
who originates or terminates the taxable end-to-end
communications. Carrier access charges, right of access
charges, charges for use of inter-company facilities, and
all telecommunications resold in the subsequent provision
used as a component of, or integrated into, end-to-end
telecommunications service shall be non-taxable as sales
for resale.
(d) If a person, who originates or receives
telecommunications in such municipality claims to be a
reseller of such telecommunications, such person shall apply
to the municipality for a resale number. Such applicant
shall state facts which will show the municipality why such
applicant is not liable for tax under any ordinance
authorized by this Section on any of such purchases and shall
furnish such additional information as the municipality may
reasonably require.
Upon approval of the application, the municipality shall
assign a resale number to the applicant and shall certify
such number to the applicant. The municipality may cancel
any number which is obtained through misrepresentation, or
which is used to send or receive such telecommunication
tax-free when such actions in fact are not for resale, or
which no longer applies because of the person's having
discontinued the making of resales.
Except as provided hereinabove in this Section, the act
or privilege of sending or receiving telecommunications in
this State shall not be made tax-free on the ground of being
a sale for resale unless the person has an active resale
number from the municipality and furnishes that number to the
retailer in connection with certifying to the retailer that
any sale to such person is non-taxable because of being a
sale for resale.
(e) A municipality that imposes taxes upon
telecommunications under this Section and whose territory
includes part of another unit of local government or a school
district may, by ordinance, exempt the other unit of local
government or school district from those taxes.
(f) A municipality that imposes taxes upon
telecommunications under this Section may, by ordinance, (i)
reduce the rate of the tax for persons 65 years of age or
older or (ii) exempt persons 65 years of age or older from
those taxes.
(Source: P.A. 87-17; 87-895; 88-116; 88-480; 88-499; 88-670,
eff. 12-2-94.)