(35 ILCS 636/5‑1) Sec. 5‑1. Short title. This Act may be cited as the Simplified Municipal Telecommunications Tax Act. (Source: P.A. 92‑526, eff. 7‑1‑02.)
(35 ILCS 636/5‑5) Sec. 5‑5. Legislative intent. The General Assembly has authorized the corporate authorities of any municipality to impose various fees and taxes on the privilege of originating or receiving telecommunications, and on retailers engaged in the business of transmitting such telecommunications, all of which are remitted by such retailers directly to the imposing municipality. To simplify the imposition and collection of municipal telecommunications taxes and to reduce complication and burden, the General Assembly is repealing the municipal telecommunications tax, the municipal tax on the occupation or privilege of transmitting messages, and the municipal infrastructure maintenance fee, and is enacting this Simplified Municipal Telecommunications Tax Act which provides for a single municipally imposed telecommunications tax which, for municipalities with populations of less than 500,000, will be collected by the Illinois Department of Revenue, but which, for municipalities of 500,000 or more, will continue to be collected by such municipalities. (Source: P.A. 92‑526, eff. 7‑1‑02.)
(35 ILCS 636/5‑7) Sec. 5‑7. Definitions. For purposes of the taxes authorized by this Act: "Amount paid" means the amount charged to the taxpayer's service address in such municipality regardless of where such amount is billed or paid. "Department" means the Illinois Department of Revenue. "Gross charge" means the amount paid for the act or privilege of originating or receiving telecommunications in such municipality and for all services and equipment provided in connection therewith by a retailer, 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. "Gross charges" for private line service shall include charges imposed at each channel termination point within a municipality that has imposed a tax under this Section and charges for the portion of the inter‑office channels provided within that municipality. Charges for that portion of the inter‑office channel connecting 2 or more channel termination points, one or more of which is located within the jurisdictional boundary of such municipality, shall be determined by the retailer by multiplying an amount equal to the total charge for the inter‑office channel by a fraction, the numerator of which is the number of channel termination points that are located within the jurisdictional boundary of the municipality and the denominator of which is the total number of channel termination points connected by the inter‑office channel. Prior to January 1, 2004, any method consistent with this paragraph or other method that reasonably apportions the total charges for inter‑office channels among the municipalities in which channel termination points are located shall be accepted as a reasonable method to determine the taxable portion of an inter‑office channel provided within a municipality for that period. However, "gross charge" shall not include any of the following: (1) Any amounts added to a purchaser's bill because
of a charge made pursuant to: (i) the tax imposed by this Act, (ii) the tax imposed by the Telecommunications Excise Tax Act, (iii) the tax imposed by Section 4251 of the Internal Revenue Code, (iv) 911 surcharges, or (v) charges added to customers' bills pursuant to the provisions of Section 9‑221 or 9‑222 of the Public Utilities Act, as amended, or any similar charges added to customers' bills by retailers who are not subject to rate regulation by the Illinois Commerce Commission for the purpose of recovering any of the tax liabilities or other amounts specified in those provisions of the Public Utilities Act.
(2) Charges for a sent collect telecommunication
received outside of such municipality.
(3) Charges for leased time on equipment or charges
for the storage of data or information for 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.
(4) 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.
(5) Charges to business enterprises certified as
exempt 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 Economic Opportunity.
(6) 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 Act 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.
(7) 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 uncollectible, 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).
(8) Charges paid by inserting coins in coin‑operated
telecommunication devices.
(9) Amounts paid by telecommunications retailers
under the Telecommunications Infrastructure Maintenance Fee Act.
(10) Charges for nontaxable services or
telecommunications if (i) those charges are aggregated with other charges for telecommunications that are taxable, (ii) those charges are not separately stated on the customer bill or invoice, and (iii) the retailer can reasonably identify the nontaxable charges on the retailer's books and records kept in the regular course of business. If the nontaxable charges cannot reasonably be identified, the gross charge from the sale of both taxable and nontaxable services or telecommunications billed on a combined basis shall be attributed to the taxable services or telecommunications. The burden of proving nontaxable charges shall be on the retailer of the telecommunications.
"Interstate telecommunications" means all telecommunications that either originate or terminate outside this State. "Intrastate telecommunications" means all telecommunications that originate and terminate within this State. "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. "Purchase at retail" means the acquisition, consumption or use of telecommunications through a sale at retail. "Retailer" means and includes every person engaged in the business of making sales at retail as defined in this Section. The Department 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 Department, 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 this State in the same manner and subject to the same requirements as a retailer maintaining a place of business within this State. The permit may be revoked by the Department at its discretion. "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. "Sale at retail" means the transmitting, supplying or furnishing of telecommunications and all services and equipment provided 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 for their use or consumption and not for resale. "Service address" means the location of telecommunications equipment from which telecommunications services are originated or at which telecommunications services are received by a taxpayer. In the event this may not be a defined location, as in the case of mobile phones, paging systems, and maritime systems, service address means the customer's place of primary use as defined in the Mobile Telecommunications Sourcing Conformity Act. For air‑to‑ground systems and the like, "service address" shall mean the location of a taxpayer's primary use of the telecommunications equipment as defined by telephone number, authorization code, or location in Illinois where bills are sent. "Taxpayer" means a person who individually or through his or her agents, employees, or permittees engages in the act or privilege of originating or receiving telecommunications in a municipality and who incurs a tax liability as authorized by this Act. "Telecommunications", in addition to the meaning ordinarily and popularly ascribed to it, includes, without limitation, messages or information transmitted through use of local, toll, and wide area telephone service, private line services, channel services, telegraph services, teletypewriter, computer exchange services, cellular mobile telecommunications service, specialized mobile radio, stationary two‑way radio, 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. As used in this Act, "private line" means a dedicated non‑traffic sensitive service for a single customer, that entitles the customer to exclusive or priority use of a communications channel or group of channels, from one or more specified locations to one or more other specified locations. 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 purchases of telecommunications by a telecommunications service provider for use as a component part of the service provided by such provider 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 of, used as a component of, or integrated into, end‑to‑end telecommunications service shall be non‑taxable as sales for resale. Prepaid telephone calling arrangements shall not be considered "telecommunications" subject to the tax imposed under this Act. For purposes of this Section, "prepaid telephone calling arrangements" means that term as defined in Section 2‑27 of the Retailers' Occupation Tax Act. (Source: P.A. 93‑286, eff. 1‑1‑04; 94‑793, eff. 5‑19‑06.)
(35 ILCS 636/5‑10) Sec. 5‑10. Authority. The corporate authorities of any municipality in this State may tax any and all of the following acts or privileges: (a) The act or privilege of originating in such municipality or receiving in such municipality intrastate telecommunications by a person. To prevent actual multi‑municipal taxation of the act or privilege that is subject to taxation under this subsection, any taxpayer, upon proof that the taxpayer has paid a tax in another municipality on that event, shall be allowed a credit against any tax enacted pursuant to or authorized by this Section to the extent of the amount of the tax properly due and paid in the municipality that was not previously allowed as a credit against any other municipal tax. 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. (b) The act or privilege of originating in such municipality or receiving in such municipality interstate telecommunications by a person. To prevent actual multi‑state or multi‑municipal taxation of the act or privilege that is subject to taxation under this subsection, any taxpayer, upon proof that the taxpayer has paid a tax in another state or municipality in this State on such event, shall be allowed a credit against any tax enacted pursuant to or authorized by this Section to the extent of the amount of such tax properly due and paid in such other state or such tax properly due and paid in a municipality in this 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. (Source: P.A. 92‑526, eff. 7‑1‑02; 93‑286, eff. 7‑22‑03.)
(35 ILCS 636/5‑15) Sec. 5‑15. Maximum rates. (a) For municipalities with a population of less than 500,000, the tax authorized by this Act may be imposed at a rate not to exceed 6% of the gross charge for telecommunications purchased at retail. If imposed, the tax must be in increments of 0.25%. (b) For municipalities with a population of 500,000 or more, the tax authorized by this Act may be imposed at a rate not to exceed 7% of the gross charge for telecommunications purchased at retail. If imposed, the tax must be in increments of 0.25%. (Source: P.A. 92‑526, eff. 7‑1‑02.)
(35 ILCS 636/5‑20) Sec. 5‑20. Imposition. (a) On and after January 1, 2003, for municipalities with populations of less than 500,000, the tax authorized by this Act shall be imposed (except as provided in Sections 5‑25 and 5‑30 of this Act), amended, or repealed by an ordinance adopted by the municipality, which ordinance shall be filed by the municipality with the Department pursuant to the rules of the Department. (1) Any ordinance adopted by a municipality with a
population of less than 500,000 which attempts to impose, amend or repeal the tax authorized by this Act shall be of no force and effect until properly filed with an appropriate form with the Department.
(2) Any certified copy of an ordinance (i) filed
with the Department prior to October 1, 2002 shall be effective with respect to gross charges billed by telecommunications retailers on or after January 1, 2003 and (ii) filed with the Department on or after October 1, 2002 and before April 1, 2003 shall be effective with respect to gross charges billed by telecommunications retailers on or after July 1, 2003. On and after April 1, 2003, any certified copy of an ordinance filed with the Department on or before September 20 or March 20 shall be effective with respect to gross charges billed by telecommunications retailers on or after the following January 1 or July 1, respectively. If the certified ordinance is filed with the Department on or before September 20, the Department shall determine by October 10 whether the ordinance meets the criteria under this Act. If the certified ordinance is filed with the Department on or before March 20, the Department shall determine by April 10 whether the ordinance meets the criteria under this Act. If the ordinance meets the criteria, the Department shall notify the telecommunications retailers via a posting on the Department's web site that the ordinance is approved and shall list the rate. For ordinances filed with the Department on or before September 20, notification must be made no later than October 10. For ordinances filed with the Department on or before March 20, notification must be made no later than April 10.
(b) On and after January 1, 2003, for municipalities with populations of 500,000 or more, the tax authorized by this Act shall be imposed, amended, or repealed, and any authorized exemptions granted, by the adoption of an ordinance and notification to the telecommunications retailers. (Source: P.A. 92‑526, eff. 7‑1‑02; 93‑286, eff. 7‑22‑03.)
(35 ILCS 636/5‑25) Sec. 5‑25. Existing telecommunications taxes and fees. (a) Between July 1, 2002 and August 1, 2002, the Department shall publish a list of the municipalities with a population of less than 500,000 that have, at any time before the effective date of this Act, enacted ordinances imposing any taxes or fees authorized by subparagraph 1 of Section 8‑11‑2 of the Illinois Municipal Code, Section 8‑11‑17 of the Illinois Municipal Code, or Section 20 of the Telecommunications Infrastructure Maintenance Fee Act. Such list shall include the name of each such municipality, the rates at which such taxes or fees are imposed as of the effective date of this Act, and the rate of the new Simplified Municipal Telecommunications Tax, as calculated pursuant to Section 5‑30 of this Act. (b) In compiling the list described in this Section, the Department shall collect information from retailers, municipalities, the Illinois Commerce Commission, and other sources deemed by the Department to be reliable. (c) Any municipality appearing on the list published pursuant to this Section shall not be required to adopt and file an ordinance implementing the tax authorized by this Act. The list shall be conclusive evidence of the imposition of the tax authorized by this Act at the rate appearing on such list. Any tax imposed in such manner shall take effect with respect to gross charges billed by telecommunications retailers on or after January 1, 2003. A municipality may alter such tax only by filing an ordinance with the Department pursuant to Section 5‑20 of this Act. (Source: P.A. 92‑526, eff. 7‑1‑02.)
(35 ILCS 636/5‑30) Sec. 5‑30. Calculation of rates for certain municipalities. The rate of the Simplified Municipal Telecommunications Tax for municipalities on the list described in Section 5‑25 of this Act shall be measured by the sum of the following rates set forth in ordinances enacted by the municipalities at the rates in effect on the effective date of this Act: (1) The rate equal to 70% of the rate set forth in
such ordinance pursuant to subparagraph 1 of Section 8‑11‑2 of the Illinois Municipal Code, rounded to the nearest even 0.25% increment; plus
(2) The rate set forth in such ordinance pursuant to
Section 8‑11‑17 of the Illinois Municipal Code, rounded to the nearest even 0.25% increment; plus
(3) The rate set forth in such ordinance pursuant to
Section 20 of the Telecommunications Infrastructure Maintenance Fee Act.
(Source: P.A. 92‑526, eff. 7‑1‑02.)
(35 ILCS 636/5‑35) Sec. 5‑35. Rebates and exemptions. Any municipality may implement the following rebates and exemptions: (1) A municipality that imposes the tax authorized
by this Act and whose territory includes part of another unit of local government or a school district, may, by separate ordinance, rebate some or all of the amount of such tax paid by the other unit of local government or school district. Any such rebate shall be paid by the municipality directly to the other unit of local government or school district qualifying for the rebate as determined by the municipality's ordinance, which shall not be filed with the Department.
(2) A municipality that imposes the tax authorized
by this Act may, by separate ordinance, rebate some or all of the amount of such tax to persons 65 years of age or older. Any tax related to such rebate shall be rebated from the municipality directly to persons qualified for the rebate as determined by the municipality's ordinance, which shall not be filed with the Department.
(3) A municipality with a population of 500,000 or
more that imposes the tax authorized by this Act may, by separate ordinance, exempt from the tax authorized by this Act, charges for inbound toll‑free telecommunications service commonly known as "800", "877", or "888" or for a similar service, to the extent such municipality has passed an ordinance providing for this exemption.
(Source: P.A. 92‑526, eff. 7‑1‑02.)
(35 ILCS 636/5‑40) Sec. 5‑40. Collection. (a) For municipalities with populations of less than 500,000, the tax authorized by this Act shall be collected from the taxpayer by a retailer maintaining a place of business in this State and shall be remitted by such retailer to the Department. Any tax required to be collected pursuant to or as authorized by this Act and any such tax collected by such retailer and required to be remitted to the Department shall constitute a debt owed by the retailer to the State. 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 Department. The tax authorized by this Act shall constitute a debt of the taxpayer to the retailer until paid, and, if unpaid, is recoverable at law in the same manner as the original charge for such sale at retail. If the retailer fails to collect the tax from the taxpayer, then the taxpayer shall be required to pay the tax directly to the Department in the manner provided by the Department. (b) For municipalities with populations of 500,000 or more, the tax authorized by this Act shall be collected from the taxpayer by a retailer making or effectuating the sale at retail and shall be remitted by such retailer to such municipality. Any tax required to be collected pursuant to an ordinance authorized by this Act and any such tax collected by a 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 such municipality. The tax authorized by this Act shall constitute a debt of the taxpayer to the retailer who made or effectuated the sale at retail until paid and, if unpaid, is recoverable at law in the same manner as the original charge for the sale at retail. If the retailer fails to collect the tax from the taxpayer, then the taxpayer shall be required to pay the tax directly to such municipality in the manner provided by such municipality. The municipality imposing the tax shall provide for its administration and enforcement. (c) Retailers filing tax returns pursuant to this Act shall, at the time of filing such return, pay to a municipality with a population of 500,000 or more or to the Department for all other municipalities, the amount of the tax collected, less a discount of 1% 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 a municipality or the Department upon request. No discount may be claimed by a retailer on returns not timely filed and for taxes not timely remitted. (d) Whenever possible, the tax authorized by this Act shall, when collected, be stated as a distinct item separate and apart from the gross charge for telecommunications. (Source: P.A. 92‑526, eff. 7‑1‑02.)
(35 ILCS 636/5‑42) Sec. 5‑42. Procedure for determining proper tax jurisdiction. (a) Tax jurisdiction information provided by a municipality upon written request from a telecommunications retailer. For purposes of this subsection (a), "telecommunications retailer" does not include retailers providing Commercial Mobile Radio Service as the term is used in the Mobile Telecommunications Sourcing Act. (1) A municipality may provide, within 30 days
following receipt of a written request from a telecommunications retailer, the following:
(A) A list containing each street name, known
street name aliases, street address number ranges, applicable directionals, and zip codes associated with each street name, for all street addresses located within the municipality. For a range of street address numbers located within a municipality that consists only of odd or even street numbers, the list must specify whether the street numbers in the range are odd or even. The list shall be alphabetical, except that numbered streets shall be in numerical sequence.
(B) A list containing each postal zip code and
all the city names associated therewith for all zip codes assigned to geographic areas located entirely within the municipality, including zip codes assigned to rural route boxes.
(C) A sequential list containing all rural route
box number ranges and the city names and zip codes associated therewith, for all rural route boxes located within the municipality, except that rural route boxes with postal zip codes entirely within the municipality that are included on the list furnished under paragraph (B) need not be duplicated.
(D) The lists shall be printed. If a list is
available through another medium, however, the municipality shall, upon request, furnish the list through such medium in addition to or in lieu of the printed lists. The municipality shall be responsible for updating the lists as changes occur and for furnishing this information to all telecommunications retailers affected by the changes. Each update shall specify an effective date, which shall be the next ensuing January 1, April 1, July 1, or October 1; shall be furnished to the telecommunications retailer not less than 60 days prior to the effective date; and shall identify the additions, deletions, and other changes to the preceding version of the list. If the information is received less than 60 days prior to the effective date of the change, the telecommunications retailer has until the next ensuing January 1, April 1, July 1, or October 1 to make the appropriate changes.
Nothing in this subsection (a) shall prevent a
municipality from providing a telecommunications retailer with the information set forth in this subdivision (a)(1) in the absence of a written request from the telecommunications retailer.
(2) The telecommunications retailer shall be
responsible for charging the tax to the service addresses contained in the lists requested under subdivision (a)(1) that include all of the elements required by this Section. If a service address is not included in the list or if no list is provided, the telecommunications retailer shall be held harmless from situsing errors provided it uses a reasonable methodology to assign the service address or addresses to a local tax jurisdiction. The telecommunications retailer shall be held harmless for any tax overpayments or underpayments (including penalty or interest) resulting from written information provided by the municipality or, in the case of disputes, the Department. If a municipality is aware of a situsing error in a telecommunications retailer's records, the municipality may file a written notification to the telecommunications retailer at an address specified by the telecommunications retailer describing the street address or addresses that are incorrect and, if known, the affected customer name or names and account number or numbers. If another jurisdiction is claiming the same street address or addresses that are the subject of the notification, the telecommunications retailer must notify the Department as specified in subdivision (a)(3) of this Section, otherwise, the telecommunications retailer shall make such correction to its records within 90 days.
(3) If it is determined from the lists or updates
furnished under subdivision (a)(1) that more than one municipality claims the same address or group of addresses, the telecommunications retailer shall notify the Department within 60 days of discovering the discrepancy. After notification and until resolution, the telecommunications retailer will continue its prior tax treatment and will be held harmless for any tax, penalty, and interest in the event the prior tax treatment is wrong. Upon resolution, the Department will notify the telecommunications retailer in a written form describing the resolution. Upon receipt of the resolution, the telecommunications retailer has until the next ensuing January 1, April 1, July 1, or October 1 to make the change.
(4) Municipalities shall notify any
telecommunications retailer that has previously requested a list under subdivision (a)(1) of this Section of any annexations, de‑annexations, or other boundary changes at least 60 days after the effective date of such changes. The notification shall contain each street name, known street name aliases, street address number ranges, applicable directionals, and zip codes associated with each street name, for all street addresses for which a change has occurred. The notice shall be mailed to an address designated by the telecommunications retailer. The telecommunications retailer has until the next ensuing January 1, April 1, July 1, or October 1 to make the changes described in such notification.
(b) The safe harbor provisions, Sections 40 and 45 of the Mobile Telecommunications Sourcing Conformity Act, shall apply to any telecommunications retailer electing to employ enhanced zip codes (zip+4) to assign each street address, address range, rural route box, or rural route box range in their service area to a specific municipal tax jurisdiction, except as provided under subdivision (c)(5). A telecommunications retailer shall make its election as prescribed by rules adopted by the Department. (c) Persons who believe that they are improperly being charged a tax imposed under this Act because their service address is assigned to the wrong taxing jurisdiction shall file a written complaint with their telecommunications (mobile or non‑mobile) retailer. The written complaint shall include the street address for her or his place of primary use for mobile telecommunications service or the service address for non‑mobile telecommunications, the name and address of the telecommunications retailer who is collecting the tax imposed by this Act, the account name and number for which the person seeks a correction of the tax assignment, a description of the error asserted by that person, an estimated amount of tax claimed to have been incorrectly paid, the time period for which that amount of tax applies, and any other information that the telecommunications retailer may reasonably require to process the request. For purposes of this Section, the terms "place of primary use" and "mobile telecommunications service" shall have the same meanings as those terms are defined in the Mobile Telecommunications Sourcing Conformity Act. Within 60 days after receiving the complaint under this subsection (c), the telecommunications retailer shall review its records, the written complaint, any information submitted by the affected municipality or municipalities, and the electronic database, if existing, or enhanced zip code used pursuant to Section 25 or 40 of the Mobile Telecommunica
(35 ILCS 636/5‑1) Sec. 5‑1. Short title. This Act may be cited as the Simplified Municipal Telecommunications Tax Act. (Source: P.A. 92‑526, eff. 7‑1‑02.)
(35 ILCS 636/5‑5) Sec. 5‑5. Legislative intent. The General Assembly has authorized the corporate authorities of any municipality to impose various fees and taxes on the privilege of originating or receiving telecommunications, and on retailers engaged in the business of transmitting such telecommunications, all of which are remitted by such retailers directly to the imposing municipality. To simplify the imposition and collection of municipal telecommunications taxes and to reduce complication and burden, the General Assembly is repealing the municipal telecommunications tax, the municipal tax on the occupation or privilege of transmitting messages, and the municipal infrastructure maintenance fee, and is enacting this Simplified Municipal Telecommunications Tax Act which provides for a single municipally imposed telecommunications tax which, for municipalities with populations of less than 500,000, will be collected by the Illinois Department of Revenue, but which, for municipalities of 500,000 or more, will continue to be collected by such municipalities. (Source: P.A. 92‑526, eff. 7‑1‑02.)
(35 ILCS 636/5‑7) Sec. 5‑7. Definitions. For purposes of the taxes authorized by this Act: "Amount paid" means the amount charged to the taxpayer's service address in such municipality regardless of where such amount is billed or paid. "Department" means the Illinois Department of Revenue. "Gross charge" means the amount paid for the act or privilege of originating or receiving telecommunications in such municipality and for all services and equipment provided in connection therewith by a retailer, 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. "Gross charges" for private line service shall include charges imposed at each channel termination point within a municipality that has imposed a tax under this Section and charges for the portion of the inter‑office channels provided within that municipality. Charges for that portion of the inter‑office channel connecting 2 or more channel termination points, one or more of which is located within the jurisdictional boundary of such municipality, shall be determined by the retailer by multiplying an amount equal to the total charge for the inter‑office channel by a fraction, the numerator of which is the number of channel termination points that are located within the jurisdictional boundary of the municipality and the denominator of which is the total number of channel termination points connected by the inter‑office channel. Prior to January 1, 2004, any method consistent with this paragraph or other method that reasonably apportions the total charges for inter‑office channels among the municipalities in which channel termination points are located shall be accepted as a reasonable method to determine the taxable portion of an inter‑office channel provided within a municipality for that period. However, "gross charge" shall not include any of the following: (1) Any amounts added to a purchaser's bill because
of a charge made pursuant to: (i) the tax imposed by this Act, (ii) the tax imposed by the Telecommunications Excise Tax Act, (iii) the tax imposed by Section 4251 of the Internal Revenue Code, (iv) 911 surcharges, or (v) charges added to customers' bills pursuant to the provisions of Section 9‑221 or 9‑222 of the Public Utilities Act, as amended, or any similar charges added to customers' bills by retailers who are not subject to rate regulation by the Illinois Commerce Commission for the purpose of recovering any of the tax liabilities or other amounts specified in those provisions of the Public Utilities Act.
(2) Charges for a sent collect telecommunication
received outside of such municipality.
(3) Charges for leased time on equipment or charges
for the storage of data or information for 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.
(4) 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.
(5) Charges to business enterprises certified as
exempt 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 Economic Opportunity.
(6) 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 Act 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.
(7) 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 uncollectible, 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).
(8) Charges paid by inserting coins in coin‑operated
telecommunication devices.
(9) Amounts paid by telecommunications retailers
under the Telecommunications Infrastructure Maintenance Fee Act.
(10) Charges for nontaxable services or
telecommunications if (i) those charges are aggregated with other charges for telecommunications that are taxable, (ii) those charges are not separately stated on the customer bill or invoice, and (iii) the retailer can reasonably identify the nontaxable charges on the retailer's books and records kept in the regular course of business. If the nontaxable charges cannot reasonably be identified, the gross charge from the sale of both taxable and nontaxable services or telecommunications billed on a combined basis shall be attributed to the taxable services or telecommunications. The burden of proving nontaxable charges shall be on the retailer of the telecommunications.
"Interstate telecommunications" means all telecommunications that either originate or terminate outside this State. "Intrastate telecommunications" means all telecommunications that originate and terminate within this State. "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. "Purchase at retail" means the acquisition, consumption or use of telecommunications through a sale at retail. "Retailer" means and includes every person engaged in the business of making sales at retail as defined in this Section. The Department 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 Department, 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 this State in the same manner and subject to the same requirements as a retailer maintaining a place of business within this State. The permit may be revoked by the Department at its discretion. "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. "Sale at retail" means the transmitting, supplying or furnishing of telecommunications and all services and equipment provided 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 for their use or consumption and not for resale. "Service address" means the location of telecommunications equipment from which telecommunications services are originated or at which telecommunications services are received by a taxpayer. In the event this may not be a defined location, as in the case of mobile phones, paging systems, and maritime systems, service address means the customer's place of primary use as defined in the Mobile Telecommunications Sourcing Conformity Act. For air‑to‑ground systems and the like, "service address" shall mean the location of a taxpayer's primary use of the telecommunications equipment as defined by telephone number, authorization code, or location in Illinois where bills are sent. "Taxpayer" means a person who individually or through his or her agents, employees, or permittees engages in the act or privilege of originating or receiving telecommunications in a municipality and who incurs a tax liability as authorized by this Act. "Telecommunications", in addition to the meaning ordinarily and popularly ascribed to it, includes, without limitation, messages or information transmitted through use of local, toll, and wide area telephone service, private line services, channel services, telegraph services, teletypewriter, computer exchange services, cellular mobile telecommunications service, specialized mobile radio, stationary two‑way radio, 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. As used in this Act, "private line" means a dedicated non‑traffic sensitive service for a single customer, that entitles the customer to exclusive or priority use of a communications channel or group of channels, from one or more specified locations to one or more other specified locations. 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 purchases of telecommunications by a telecommunications service provider for use as a component part of the service provided by such provider 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 of, used as a component of, or integrated into, end‑to‑end telecommunications service shall be non‑taxable as sales for resale. Prepaid telephone calling arrangements shall not be considered "telecommunications" subject to the tax imposed under this Act. For purposes of this Section, "prepaid telephone calling arrangements" means that term as defined in Section 2‑27 of the Retailers' Occupation Tax Act. (Source: P.A. 93‑286, eff. 1‑1‑04; 94‑793, eff. 5‑19‑06.)
(35 ILCS 636/5‑10) Sec. 5‑10. Authority. The corporate authorities of any municipality in this State may tax any and all of the following acts or privileges: (a) The act or privilege of originating in such municipality or receiving in such municipality intrastate telecommunications by a person. To prevent actual multi‑municipal taxation of the act or privilege that is subject to taxation under this subsection, any taxpayer, upon proof that the taxpayer has paid a tax in another municipality on that event, shall be allowed a credit against any tax enacted pursuant to or authorized by this Section to the extent of the amount of the tax properly due and paid in the municipality that was not previously allowed as a credit against any other municipal tax. 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. (b) The act or privilege of originating in such municipality or receiving in such municipality interstate telecommunications by a person. To prevent actual multi‑state or multi‑municipal taxation of the act or privilege that is subject to taxation under this subsection, any taxpayer, upon proof that the taxpayer has paid a tax in another state or municipality in this State on such event, shall be allowed a credit against any tax enacted pursuant to or authorized by this Section to the extent of the amount of such tax properly due and paid in such other state or such tax properly due and paid in a municipality in this 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. (Source: P.A. 92‑526, eff. 7‑1‑02; 93‑286, eff. 7‑22‑03.)
(35 ILCS 636/5‑15) Sec. 5‑15. Maximum rates. (a) For municipalities with a population of less than 500,000, the tax authorized by this Act may be imposed at a rate not to exceed 6% of the gross charge for telecommunications purchased at retail. If imposed, the tax must be in increments of 0.25%. (b) For municipalities with a population of 500,000 or more, the tax authorized by this Act may be imposed at a rate not to exceed 7% of the gross charge for telecommunications purchased at retail. If imposed, the tax must be in increments of 0.25%. (Source: P.A. 92‑526, eff. 7‑1‑02.)
(35 ILCS 636/5‑20) Sec. 5‑20. Imposition. (a) On and after January 1, 2003, for municipalities with populations of less than 500,000, the tax authorized by this Act shall be imposed (except as provided in Sections 5‑25 and 5‑30 of this Act), amended, or repealed by an ordinance adopted by the municipality, which ordinance shall be filed by the municipality with the Department pursuant to the rules of the Department. (1) Any ordinance adopted by a municipality with a
population of less than 500,000 which attempts to impose, amend or repeal the tax authorized by this Act shall be of no force and effect until properly filed with an appropriate form with the Department.
(2) Any certified copy of an ordinance (i) filed
with the Department prior to October 1, 2002 shall be effective with respect to gross charges billed by telecommunications retailers on or after January 1, 2003 and (ii) filed with the Department on or after October 1, 2002 and before April 1, 2003 shall be effective with respect to gross charges billed by telecommunications retailers on or after July 1, 2003. On and after April 1, 2003, any certified copy of an ordinance filed with the Department on or before September 20 or March 20 shall be effective with respect to gross charges billed by telecommunications retailers on or after the following January 1 or July 1, respectively. If the certified ordinance is filed with the Department on or before September 20, the Department shall determine by October 10 whether the ordinance meets the criteria under this Act. If the certified ordinance is filed with the Department on or before March 20, the Department shall determine by April 10 whether the ordinance meets the criteria under this Act. If the ordinance meets the criteria, the Department shall notify the telecommunications retailers via a posting on the Department's web site that the ordinance is approved and shall list the rate. For ordinances filed with the Department on or before September 20, notification must be made no later than October 10. For ordinances filed with the Department on or before March 20, notification must be made no later than April 10.
(b) On and after January 1, 2003, for municipalities with populations of 500,000 or more, the tax authorized by this Act shall be imposed, amended, or repealed, and any authorized exemptions granted, by the adoption of an ordinance and notification to the telecommunications retailers. (Source: P.A. 92‑526, eff. 7‑1‑02; 93‑286, eff. 7‑22‑03.)
(35 ILCS 636/5‑25) Sec. 5‑25. Existing telecommunications taxes and fees. (a) Between July 1, 2002 and August 1, 2002, the Department shall publish a list of the municipalities with a population of less than 500,000 that have, at any time before the effective date of this Act, enacted ordinances imposing any taxes or fees authorized by subparagraph 1 of Section 8‑11‑2 of the Illinois Municipal Code, Section 8‑11‑17 of the Illinois Municipal Code, or Section 20 of the Telecommunications Infrastructure Maintenance Fee Act. Such list shall include the name of each such municipality, the rates at which such taxes or fees are imposed as of the effective date of this Act, and the rate of the new Simplified Municipal Telecommunications Tax, as calculated pursuant to Section 5‑30 of this Act. (b) In compiling the list described in this Section, the Department shall collect information from retailers, municipalities, the Illinois Commerce Commission, and other sources deemed by the Department to be reliable. (c) Any municipality appearing on the list published pursuant to this Section shall not be required to adopt and file an ordinance implementing the tax authorized by this Act. The list shall be conclusive evidence of the imposition of the tax authorized by this Act at the rate appearing on such list. Any tax imposed in such manner shall take effect with respect to gross charges billed by telecommunications retailers on or after January 1, 2003. A municipality may alter such tax only by filing an ordinance with the Department pursuant to Section 5‑20 of this Act. (Source: P.A. 92‑526, eff. 7‑1‑02.)
(35 ILCS 636/5‑30) Sec. 5‑30. Calculation of rates for certain municipalities. The rate of the Simplified Municipal Telecommunications Tax for municipalities on the list described in Section 5‑25 of this Act shall be measured by the sum of the following rates set forth in ordinances enacted by the municipalities at the rates in effect on the effective date of this Act: (1) The rate equal to 70% of the rate set forth in
such ordinance pursuant to subparagraph 1 of Section 8‑11‑2 of the Illinois Municipal Code, rounded to the nearest even 0.25% increment; plus
(2) The rate set forth in such ordinance pursuant to
Section 8‑11‑17 of the Illinois Municipal Code, rounded to the nearest even 0.25% increment; plus
(3) The rate set forth in such ordinance pursuant to
Section 20 of the Telecommunications Infrastructure Maintenance Fee Act.
(Source: P.A. 92‑526, eff. 7‑1‑02.)
(35 ILCS 636/5‑35) Sec. 5‑35. Rebates and exemptions. Any municipality may implement the following rebates and exemptions: (1) A municipality that imposes the tax authorized
by this Act and whose territory includes part of another unit of local government or a school district, may, by separate ordinance, rebate some or all of the amount of such tax paid by the other unit of local government or school district. Any such rebate shall be paid by the municipality directly to the other unit of local government or school district qualifying for the rebate as determined by the municipality's ordinance, which shall not be filed with the Department.
(2) A municipality that imposes the tax authorized
by this Act may, by separate ordinance, rebate some or all of the amount of such tax to persons 65 years of age or older. Any tax related to such rebate shall be rebated from the municipality directly to persons qualified for the rebate as determined by the municipality's ordinance, which shall not be filed with the Department.
(3) A municipality with a population of 500,000 or
more that imposes the tax authorized by this Act may, by separate ordinance, exempt from the tax authorized by this Act, charges for inbound toll‑free telecommunications service commonly known as "800", "877", or "888" or for a similar service, to the extent such municipality has passed an ordinance providing for this exemption.
(Source: P.A. 92‑526, eff. 7‑1‑02.)
(35 ILCS 636/5‑40) Sec. 5‑40. Collection. (a) For municipalities with populations of less than 500,000, the tax authorized by this Act shall be collected from the taxpayer by a retailer maintaining a place of business in this State and shall be remitted by such retailer to the Department. Any tax required to be collected pursuant to or as authorized by this Act and any such tax collected by such retailer and required to be remitted to the Department shall constitute a debt owed by the retailer to the State. 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 Department. The tax authorized by this Act shall constitute a debt of the taxpayer to the retailer until paid, and, if unpaid, is recoverable at law in the same manner as the original charge for such sale at retail. If the retailer fails to collect the tax from the taxpayer, then the taxpayer shall be required to pay the tax directly to the Department in the manner provided by the Department. (b) For municipalities with populations of 500,000 or more, the tax authorized by this Act shall be collected from the taxpayer by a retailer making or effectuating the sale at retail and shall be remitted by such retailer to such municipality. Any tax required to be collected pursuant to an ordinance authorized by this Act and any such tax collected by a 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 such municipality. The tax authorized by this Act shall constitute a debt of the taxpayer to the retailer who made or effectuated the sale at retail until paid and, if unpaid, is recoverable at law in the same manner as the original charge for the sale at retail. If the retailer fails to collect the tax from the taxpayer, then the taxpayer shall be required to pay the tax directly to such municipality in the manner provided by such municipality. The municipality imposing the tax shall provide for its administration and enforcement. (c) Retailers filing tax returns pursuant to this Act shall, at the time of filing such return, pay to a municipality with a population of 500,000 or more or to the Department for all other municipalities, the amount of the tax collected, less a discount of 1% 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 a municipality or the Department upon request. No discount may be claimed by a retailer on returns not timely filed and for taxes not timely remitted. (d) Whenever possible, the tax authorized by this Act shall, when collected, be stated as a distinct item separate and apart from the gross charge for telecommunications. (Source: P.A. 92‑526, eff. 7‑1‑02.)
(35 ILCS 636/5‑42) Sec. 5‑42. Procedure for determining proper tax jurisdiction. (a) Tax jurisdiction information provided by a municipality upon written request from a telecommunications retailer. For purposes of this subsection (a), "telecommunications retailer" does not include retailers providing Commercial Mobile Radio Service as the term is used in the Mobile Telecommunications Sourcing Act. (1) A municipality may provide, within 30 days
following receipt of a written request from a telecommunications retailer, the following:
(A) A list containing each street name, known
street name aliases, street address number ranges, applicable directionals, and zip codes associated with each street name, for all street addresses located within the municipality. For a range of street address numbers located within a municipality that consists only of odd or even street numbers, the list must specify whether the street numbers in the range are odd or even. The list shall be alphabetical, except that numbered streets shall be in numerical sequence.
(B) A list containing each postal zip code and
all the city names associated therewith for all zip codes assigned to geographic areas located entirely within the municipality, including zip codes assigned to rural route boxes.
(C) A sequential list containing all rural route
box number ranges and the city names and zip codes associated therewith, for all rural route boxes located within the municipality, except that rural route boxes with postal zip codes entirely within the municipality that are included on the list furnished under paragraph (B) need not be duplicated.
(D) The lists shall be printed. If a list is
available through another medium, however, the municipality shall, upon request, furnish the list through such medium in addition to or in lieu of the printed lists. The municipality shall be responsible for updating the lists as changes occur and for furnishing this information to all telecommunications retailers affected by the changes. Each update shall specify an effective date, which shall be the next ensuing January 1, April 1, July 1, or October 1; shall be furnished to the telecommunications retailer not less than 60 days prior to the effective date; and shall identify the additions, deletions, and other changes to the preceding version of the list. If the information is received less than 60 days prior to the effective date of the change, the telecommunications retailer has until the next ensuing January 1, April 1, July 1, or October 1 to make the appropriate changes.
Nothing in this subsection (a) shall prevent a
municipality from providing a telecommunications retailer with the information set forth in this subdivision (a)(1) in the absence of a written request from the telecommunications retailer.
(2) The telecommunications retailer shall be
responsible for charging the tax to the service addresses contained in the lists requested under subdivision (a)(1) that include all of the elements required by this Section. If a service address is not included in the list or if no list is provided, the telecommunications retailer shall be held harmless from situsing errors provided it uses a reasonable methodology to assign the service address or addresses to a local tax jurisdiction. The telecommunications retailer shall be held harmless for any tax overpayments or underpayments (including penalty or interest) resulting from written information provided by the municipality or, in the case of disputes, the Department. If a municipality is aware of a situsing error in a telecommunications retailer's records, the municipality may file a written notification to the telecommunications retailer at an address specified by the telecommunications retailer describing the street address or addresses that are incorrect and, if known, the affected customer name or names and account number or numbers. If another jurisdiction is claiming the same street address or addresses that are the subject of the notification, the telecommunications retailer must notify the Department as specified in subdivision (a)(3) of this Section, otherwise, the telecommunications retailer shall make such correction to its records within 90 days.
(3) If it is determined from the lists or updates
furnished under subdivision (a)(1) that more than one municipality claims the same address or group of addresses, the telecommunications retailer shall notify the Department within 60 days of discovering the discrepancy. After notification and until resolution, the telecommunications retailer will continue its prior tax treatment and will be held harmless for any tax, penalty, and interest in the event the prior tax treatment is wrong. Upon resolution, the Department will notify the telecommunications retailer in a written form describing the resolution. Upon receipt of the resolution, the telecommunications retailer has until the next ensuing January 1, April 1, July 1, or October 1 to make the change.
(4) Municipalities shall notify any
telecommunications retailer that has previously requested a list under subdivision (a)(1) of this Section of any annexations, de‑annexations, or other boundary changes at least 60 days after the effective date of such changes. The notification shall contain each street name, known street name aliases, street address number ranges, applicable directionals, and zip codes associated with each street name, for all street addresses for which a change has occurred. The notice shall be mailed to an address designated by the telecommunications retailer. The telecommunications retailer has until the next ensuing January 1, April 1, July 1, or October 1 to make the changes described in such notification.
(b) The safe harbor provisions, Sections 40 and 45 of the Mobile Telecommunications Sourcing Conformity Act, shall apply to any telecommunications retailer electing to employ enhanced zip codes (zip+4) to assign each street address, address range, rural route box, or rural route box range in their service area to a specific municipal tax jurisdiction, except as provided under subdivision (c)(5). A telecommunications retailer shall make its election as prescribed by rules adopted by the Department. (c) Persons who believe that they are improperly being charged a tax imposed under this Act because their service address is assigned to the wrong taxing jurisdiction shall file a written complaint with their telecommunications (mobile or non‑mobile) retailer. The written complaint shall include the street address for her or his place of primary use for mobile telecommunications service or the service address for non‑mobile telecommunications, the name and address of the telecommunications retailer who is collecting the tax imposed by this Act, the account name and number for which the person seeks a correction of the tax assignment, a description of the error asserted by that person, an estimated amount of tax claimed to have been incorrectly paid, the time period for which that amount of tax applies, and any other information that the telecommunications retailer may reasonably require to process the request. For purposes of this Section, the terms "place of primary use" and "mobile telecommunications service" shall have the same meanings as those terms are defined in the Mobile Telecommunications Sourcing Conformity Act. Within 60 days after receiving the complaint under this subsection (c), the telecommunications retailer shall review its records, the written complaint, any information submitted by the affected municipality or municipalities, and the electronic database, if existing, or enhanced zip code used pursuant to Section 25 or 40 of the Mobile Telecommunica
(35 ILCS 636/5‑1) Sec. 5‑1. Short title. This Act may be cited as the Simplified Municipal Telecommunications Tax Act. (Source: P.A. 92‑526, eff. 7‑1‑02.)
(35 ILCS 636/5‑5) Sec. 5‑5. Legislative intent. The General Assembly has authorized the corporate authorities of any municipality to impose various fees and taxes on the privilege of originating or receiving telecommunications, and on retailers engaged in the business of transmitting such telecommunications, all of which are remitted by such retailers directly to the imposing municipality. To simplify the imposition and collection of municipal telecommunications taxes and to reduce complication and burden, the General Assembly is repealing the municipal telecommunications tax, the municipal tax on the occupation or privilege of transmitting messages, and the municipal infrastructure maintenance fee, and is enacting this Simplified Municipal Telecommunications Tax Act which provides for a single municipally imposed telecommunications tax which, for municipalities with populations of less than 500,000, will be collected by the Illinois Department of Revenue, but which, for municipalities of 500,000 or more, will continue to be collected by such municipalities. (Source: P.A. 92‑526, eff. 7‑1‑02.)
(35 ILCS 636/5‑7) Sec. 5‑7. Definitions. For purposes of the taxes authorized by this Act: "Amount paid" means the amount charged to the taxpayer's service address in such municipality regardless of where such amount is billed or paid. "Department" means the Illinois Department of Revenue. "Gross charge" means the amount paid for the act or privilege of originating or receiving telecommunications in such municipality and for all services and equipment provided in connection therewith by a retailer, 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. "Gross charges" for private line service shall include charges imposed at each channel termination point within a municipality that has imposed a tax under this Section and charges for the portion of the inter‑office channels provided within that municipality. Charges for that portion of the inter‑office channel connecting 2 or more channel termination points, one or more of which is located within the jurisdictional boundary of such municipality, shall be determined by the retailer by multiplying an amount equal to the total charge for the inter‑office channel by a fraction, the numerator of which is the number of channel termination points that are located within the jurisdictional boundary of the municipality and the denominator of which is the total number of channel termination points connected by the inter‑office channel. Prior to January 1, 2004, any method consistent with this paragraph or other method that reasonably apportions the total charges for inter‑office channels among the municipalities in which channel termination points are located shall be accepted as a reasonable method to determine the taxable portion of an inter‑office channel provided within a municipality for that period. However, "gross charge" shall not include any of the following: (1) Any amounts added to a purchaser's bill because
of a charge made pursuant to: (i) the tax imposed by this Act, (ii) the tax imposed by the Telecommunications Excise Tax Act, (iii) the tax imposed by Section 4251 of the Internal Revenue Code, (iv) 911 surcharges, or (v) charges added to customers' bills pursuant to the provisions of Section 9‑221 or 9‑222 of the Public Utilities Act, as amended, or any similar charges added to customers' bills by retailers who are not subject to rate regulation by the Illinois Commerce Commission for the purpose of recovering any of the tax liabilities or other amounts specified in those provisions of the Public Utilities Act.
(2) Charges for a sent collect telecommunication
received outside of such municipality.
(3) Charges for leased time on equipment or charges
for the storage of data or information for 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.
(4) 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.
(5) Charges to business enterprises certified as
exempt 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 Economic Opportunity.
(6) 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 Act 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.
(7) 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 uncollectible, 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).
(8) Charges paid by inserting coins in coin‑operated
telecommunication devices.
(9) Amounts paid by telecommunications retailers
under the Telecommunications Infrastructure Maintenance Fee Act.
(10) Charges for nontaxable services or
telecommunications if (i) those charges are aggregated with other charges for telecommunications that are taxable, (ii) those charges are not separately stated on the customer bill or invoice, and (iii) the retailer can reasonably identify the nontaxable charges on the retailer's books and records kept in the regular course of business. If the nontaxable charges cannot reasonably be identified, the gross charge from the sale of both taxable and nontaxable services or telecommunications billed on a combined basis shall be attributed to the taxable services or telecommunications. The burden of proving nontaxable charges shall be on the retailer of the telecommunications.
"Interstate telecommunications" means all telecommunications that either originate or terminate outside this State. "Intrastate telecommunications" means all telecommunications that originate and terminate within this State. "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. "Purchase at retail" means the acquisition, consumption or use of telecommunications through a sale at retail. "Retailer" means and includes every person engaged in the business of making sales at retail as defined in this Section. The Department 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 Department, 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 this State in the same manner and subject to the same requirements as a retailer maintaining a place of business within this State. The permit may be revoked by the Department at its discretion. "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. "Sale at retail" means the transmitting, supplying or furnishing of telecommunications and all services and equipment provided 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 for their use or consumption and not for resale. "Service address" means the location of telecommunications equipment from which telecommunications services are originated or at which telecommunications services are received by a taxpayer. In the event this may not be a defined location, as in the case of mobile phones, paging systems, and maritime systems, service address means the customer's place of primary use as defined in the Mobile Telecommunications Sourcing Conformity Act. For air‑to‑ground systems and the like, "service address" shall mean the location of a taxpayer's primary use of the telecommunications equipment as defined by telephone number, authorization code, or location in Illinois where bills are sent. "Taxpayer" means a person who individually or through his or her agents, employees, or permittees engages in the act or privilege of originating or receiving telecommunications in a municipality and who incurs a tax liability as authorized by this Act. "Telecommunications", in addition to the meaning ordinarily and popularly ascribed to it, includes, without limitation, messages or information transmitted through use of local, toll, and wide area telephone service, private line services, channel services, telegraph services, teletypewriter, computer exchange services, cellular mobile telecommunications service, specialized mobile radio, stationary two‑way radio, 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. As used in this Act, "private line" means a dedicated non‑traffic sensitive service for a single customer, that entitles the customer to exclusive or priority use of a communications channel or group of channels, from one or more specified locations to one or more other specified locations. 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 purchases of telecommunications by a telecommunications service provider for use as a component part of the service provided by such provider 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 of, used as a component of, or integrated into, end‑to‑end telecommunications service shall be non‑taxable as sales for resale. Prepaid telephone calling arrangements shall not be considered "telecommunications" subject to the tax imposed under this Act. For purposes of this Section, "prepaid telephone calling arrangements" means that term as defined in Section 2‑27 of the Retailers' Occupation Tax Act. (Source: P.A. 93‑286, eff. 1‑1‑04; 94‑793, eff. 5‑19‑06.)
(35 ILCS 636/5‑10) Sec. 5‑10. Authority. The corporate authorities of any municipality in this State may tax any and all of the following acts or privileges: (a) The act or privilege of originating in such municipality or receiving in such municipality intrastate telecommunications by a person. To prevent actual multi‑municipal taxation of the act or privilege that is subject to taxation under this subsection, any taxpayer, upon proof that the taxpayer has paid a tax in another municipality on that event, shall be allowed a credit against any tax enacted pursuant to or authorized by this Section to the extent of the amount of the tax properly due and paid in the municipality that was not previously allowed as a credit against any other municipal tax. 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. (b) The act or privilege of originating in such municipality or receiving in such municipality interstate telecommunications by a person. To prevent actual multi‑state or multi‑municipal taxation of the act or privilege that is subject to taxation under this subsection, any taxpayer, upon proof that the taxpayer has paid a tax in another state or municipality in this State on such event, shall be allowed a credit against any tax enacted pursuant to or authorized by this Section to the extent of the amount of such tax properly due and paid in such other state or such tax properly due and paid in a municipality in this 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. (Source: P.A. 92‑526, eff. 7‑1‑02; 93‑286, eff. 7‑22‑03.)
(35 ILCS 636/5‑15) Sec. 5‑15. Maximum rates. (a) For municipalities with a population of less than 500,000, the tax authorized by this Act may be imposed at a rate not to exceed 6% of the gross charge for telecommunications purchased at retail. If imposed, the tax must be in increments of 0.25%. (b) For municipalities with a population of 500,000 or more, the tax authorized by this Act may be imposed at a rate not to exceed 7% of the gross charge for telecommunications purchased at retail. If imposed, the tax must be in increments of 0.25%. (Source: P.A. 92‑526, eff. 7‑1‑02.)
(35 ILCS 636/5‑20) Sec. 5‑20. Imposition. (a) On and after January 1, 2003, for municipalities with populations of less than 500,000, the tax authorized by this Act shall be imposed (except as provided in Sections 5‑25 and 5‑30 of this Act), amended, or repealed by an ordinance adopted by the municipality, which ordinance shall be filed by the municipality with the Department pursuant to the rules of the Department. (1) Any ordinance adopted by a municipality with a
population of less than 500,000 which attempts to impose, amend or repeal the tax authorized by this Act shall be of no force and effect until properly filed with an appropriate form with the Department.
(2) Any certified copy of an ordinance (i) filed
with the Department prior to October 1, 2002 shall be effective with respect to gross charges billed by telecommunications retailers on or after January 1, 2003 and (ii) filed with the Department on or after October 1, 2002 and before April 1, 2003 shall be effective with respect to gross charges billed by telecommunications retailers on or after July 1, 2003. On and after April 1, 2003, any certified copy of an ordinance filed with the Department on or before September 20 or March 20 shall be effective with respect to gross charges billed by telecommunications retailers on or after the following January 1 or July 1, respectively. If the certified ordinance is filed with the Department on or before September 20, the Department shall determine by October 10 whether the ordinance meets the criteria under this Act. If the certified ordinance is filed with the Department on or before March 20, the Department shall determine by April 10 whether the ordinance meets the criteria under this Act. If the ordinance meets the criteria, the Department shall notify the telecommunications retailers via a posting on the Department's web site that the ordinance is approved and shall list the rate. For ordinances filed with the Department on or before September 20, notification must be made no later than October 10. For ordinances filed with the Department on or before March 20, notification must be made no later than April 10.
(b) On and after January 1, 2003, for municipalities with populations of 500,000 or more, the tax authorized by this Act shall be imposed, amended, or repealed, and any authorized exemptions granted, by the adoption of an ordinance and notification to the telecommunications retailers. (Source: P.A. 92‑526, eff. 7‑1‑02; 93‑286, eff. 7‑22‑03.)
(35 ILCS 636/5‑25) Sec. 5‑25. Existing telecommunications taxes and fees. (a) Between July 1, 2002 and August 1, 2002, the Department shall publish a list of the municipalities with a population of less than 500,000 that have, at any time before the effective date of this Act, enacted ordinances imposing any taxes or fees authorized by subparagraph 1 of Section 8‑11‑2 of the Illinois Municipal Code, Section 8‑11‑17 of the Illinois Municipal Code, or Section 20 of the Telecommunications Infrastructure Maintenance Fee Act. Such list shall include the name of each such municipality, the rates at which such taxes or fees are imposed as of the effective date of this Act, and the rate of the new Simplified Municipal Telecommunications Tax, as calculated pursuant to Section 5‑30 of this Act. (b) In compiling the list described in this Section, the Department shall collect information from retailers, municipalities, the Illinois Commerce Commission, and other sources deemed by the Department to be reliable. (c) Any municipality appearing on the list published pursuant to this Section shall not be required to adopt and file an ordinance implementing the tax authorized by this Act. The list shall be conclusive evidence of the imposition of the tax authorized by this Act at the rate appearing on such list. Any tax imposed in such manner shall take effect with respect to gross charges billed by telecommunications retailers on or after January 1, 2003. A municipality may alter such tax only by filing an ordinance with the Department pursuant to Section 5‑20 of this Act. (Source: P.A. 92‑526, eff. 7‑1‑02.)
(35 ILCS 636/5‑30) Sec. 5‑30. Calculation of rates for certain municipalities. The rate of the Simplified Municipal Telecommunications Tax for municipalities on the list described in Section 5‑25 of this Act shall be measured by the sum of the following rates set forth in ordinances enacted by the municipalities at the rates in effect on the effective date of this Act: (1) The rate equal to 70% of the rate set forth in
such ordinance pursuant to subparagraph 1 of Section 8‑11‑2 of the Illinois Municipal Code, rounded to the nearest even 0.25% increment; plus
(2) The rate set forth in such ordinance pursuant to
Section 8‑11‑17 of the Illinois Municipal Code, rounded to the nearest even 0.25% increment; plus
(3) The rate set forth in such ordinance pursuant to
Section 20 of the Telecommunications Infrastructure Maintenance Fee Act.
(Source: P.A. 92‑526, eff. 7‑1‑02.)
(35 ILCS 636/5‑35) Sec. 5‑35. Rebates and exemptions. Any municipality may implement the following rebates and exemptions: (1) A municipality that imposes the tax authorized
by this Act and whose territory includes part of another unit of local government or a school district, may, by separate ordinance, rebate some or all of the amount of such tax paid by the other unit of local government or school district. Any such rebate shall be paid by the municipality directly to the other unit of local government or school district qualifying for the rebate as determined by the municipality's ordinance, which shall not be filed with the Department.
(2) A municipality that imposes the tax authorized
by this Act may, by separate ordinance, rebate some or all of the amount of such tax to persons 65 years of age or older. Any tax related to such rebate shall be rebated from the municipality directly to persons qualified for the rebate as determined by the municipality's ordinance, which shall not be filed with the Department.
(3) A municipality with a population of 500,000 or
more that imposes the tax authorized by this Act may, by separate ordinance, exempt from the tax authorized by this Act, charges for inbound toll‑free telecommunications service commonly known as "800", "877", or "888" or for a similar service, to the extent such municipality has passed an ordinance providing for this exemption.
(Source: P.A. 92‑526, eff. 7‑1‑02.)
(35 ILCS 636/5‑40) Sec. 5‑40. Collection. (a) For municipalities with populations of less than 500,000, the tax authorized by this Act shall be collected from the taxpayer by a retailer maintaining a place of business in this State and shall be remitted by such retailer to the Department. Any tax required to be collected pursuant to or as authorized by this Act and any such tax collected by such retailer and required to be remitted to the Department shall constitute a debt owed by the retailer to the State. 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 Department. The tax authorized by this Act shall constitute a debt of the taxpayer to the retailer until paid, and, if unpaid, is recoverable at law in the same manner as the original charge for such sale at retail. If the retailer fails to collect the tax from the taxpayer, then the taxpayer shall be required to pay the tax directly to the Department in the manner provided by the Department. (b) For municipalities with populations of 500,000 or more, the tax authorized by this Act shall be collected from the taxpayer by a retailer making or effectuating the sale at retail and shall be remitted by such retailer to such municipality. Any tax required to be collected pursuant to an ordinance authorized by this Act and any such tax collected by a 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 such municipality. The tax authorized by this Act shall constitute a debt of the taxpayer to the retailer who made or effectuated the sale at retail until paid and, if unpaid, is recoverable at law in the same manner as the original charge for the sale at retail. If the retailer fails to collect the tax from the taxpayer, then the taxpayer shall be required to pay the tax directly to such municipality in the manner provided by such municipality. The municipality imposing the tax shall provide for its administration and enforcement. (c) Retailers filing tax returns pursuant to this Act shall, at the time of filing such return, pay to a municipality with a population of 500,000 or more or to the Department for all other municipalities, the amount of the tax collected, less a discount of 1% 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 a municipality or the Department upon request. No discount may be claimed by a retailer on returns not timely filed and for taxes not timely remitted. (d) Whenever possible, the tax authorized by this Act shall, when collected, be stated as a distinct item separate and apart from the gross charge for telecommunications. (Source: P.A. 92‑526, eff. 7‑1‑02.)
(35 ILCS 636/5‑42) Sec. 5‑42. Procedure for determining proper tax jurisdiction. (a) Tax jurisdiction information provided by a municipality upon written request from a telecommunications retailer. For purposes of this subsection (a), "telecommunications retailer" does not include retailers providing Commercial Mobile Radio Service as the term is used in the Mobile Telecommunications Sourcing Act. (1) A municipality may provide, within 30 days
following receipt of a written request from a telecommunications retailer, the following:
(A) A list containing each street name, known
street name aliases, street address number ranges, applicable directionals, and zip codes associated with each street name, for all street addresses located within the municipality. For a range of street address numbers located within a municipality that consists only of odd or even street numbers, the list must specify whether the street numbers in the range are odd or even. The list shall be alphabetical, except that numbered streets shall be in numerical sequence.
(B) A list containing each postal zip code and
all the city names associated therewith for all zip codes assigned to geographic areas located entirely within the municipality, including zip codes assigned to rural route boxes.
(C) A sequential list containing all rural route
box number ranges and the city names and zip codes associated therewith, for all rural route boxes located within the municipality, except that rural route boxes with postal zip codes entirely within the municipality that are included on the list furnished under paragraph (B) need not be duplicated.
(D) The lists shall be printed. If a list is
available through another medium, however, the municipality shall, upon request, furnish the list through such medium in addition to or in lieu of the printed lists. The municipality shall be responsible for updating the lists as changes occur and for furnishing this information to all telecommunications retailers affected by the changes. Each update shall specify an effective date, which shall be the next ensuing January 1, April 1, July 1, or October 1; shall be furnished to the telecommunications retailer not less than 60 days prior to the effective date; and shall identify the additions, deletions, and other changes to the preceding version of the list. If the information is received less than 60 days prior to the effective date of the change, the telecommunications retailer has until the next ensuing January 1, April 1, July 1, or October 1 to make the appropriate changes.
Nothing in this subsection (a) shall prevent a
municipality from providing a telecommunications retailer with the information set forth in this subdivision (a)(1) in the absence of a written request from the telecommunications retailer.
(2) The telecommunications retailer shall be
responsible for charging the tax to the service addresses contained in the lists requested under subdivision (a)(1) that include all of the elements required by this Section. If a service address is not included in the list or if no list is provided, the telecommunications retailer shall be held harmless from situsing errors provided it uses a reasonable methodology to assign the service address or addresses to a local tax jurisdiction. The telecommunications retailer shall be held harmless for any tax overpayments or underpayments (including penalty or interest) resulting from written information provided by the municipality or, in the case of disputes, the Department. If a municipality is aware of a situsing error in a telecommunications retailer's records, the municipality may file a written notification to the telecommunications retailer at an address specified by the telecommunications retailer describing the street address or addresses that are incorrect and, if known, the affected customer name or names and account number or numbers. If another jurisdiction is claiming the same street address or addresses that are the subject of the notification, the telecommunications retailer must notify the Department as specified in subdivision (a)(3) of this Section, otherwise, the telecommunications retailer shall make such correction to its records within 90 days.
(3) If it is determined from the lists or updates
furnished under subdivision (a)(1) that more than one municipality claims the same address or group of addresses, the telecommunications retailer shall notify the Department within 60 days of discovering the discrepancy. After notification and until resolution, the telecommunications retailer will continue its prior tax treatment and will be held harmless for any tax, penalty, and interest in the event the prior tax treatment is wrong. Upon resolution, the Department will notify the telecommunications retailer in a written form describing the resolution. Upon receipt of the resolution, the telecommunications retailer has until the next ensuing January 1, April 1, July 1, or October 1 to make the change.
(4) Municipalities shall notify any
telecommunications retailer that has previously requested a list under subdivision (a)(1) of this Section of any annexations, de‑annexations, or other boundary changes at least 60 days after the effective date of such changes. The notification shall contain each street name, known street name aliases, street address number ranges, applicable directionals, and zip codes associated with each street name, for all street addresses for which a change has occurred. The notice shall be mailed to an address designated by the telecommunications retailer. The telecommunications retailer has until the next ensuing January 1, April 1, July 1, or October 1 to make the changes described in such notification.
(b) The safe harbor provisions, Sections 40 and 45 of the Mobile Telecommunications Sourcing Conformity Act, shall apply to any telecommunications retailer electing to employ enhanced zip codes (zip+4) to assign each street address, address range, rural route box, or rural route box range in their service area to a specific municipal tax jurisdiction, except as provided under subdivision (c)(5). A telecommunications retailer shall make its election as prescribed by rules adopted by the Department. (c) Persons who believe that they are improperly being charged a tax imposed under this Act because their service address is assigned to the wrong taxing jurisdiction shall file a written complaint with their telecommunications (mobile or non‑mobile) retailer. The written complaint shall include the street address for her or his place of primary use for mobile telecommunications service or the service address for non‑mobile telecommunications, the name and address of the telecommunications retailer who is collecting the tax imposed by this Act, the account name and number for which the person seeks a correction of the tax assignment, a description of the error asserted by that person, an estimated amount of tax claimed to have been incorrectly paid, the time period for which that amount of tax applies, and any other information that the telecommunications retailer may reasonably require to process the request. For purposes of this Section, the terms "place of primary use" and "mobile telecommunications service" shall have the same meanings as those terms are defined in the Mobile Telecommunications Sourcing Conformity Act. Within 60 days after receiving the complaint under this subsection (c), the telecommunications retailer shall review its records, the written complaint, any information submitted by the affected municipality or municipalities, and the electronic database, if existing, or enhanced zip code used pursuant to Section 25 or 40 of the Mobile Telecommunica
