a) Authority to Impose Tax
1) Pursuant to Section 8-11-5 of the Illinois
Municipal Code [65 ILCS 5], the corporate authorities of a home rule
municipality may impose a tax upon all persons engaged, in such municipality,
in the business of making sales of service at the same rate of tax imposed
pursuant to Section 8-11-1 of the Illinois Municipal Code [65 ILCS
5/8-11-1], of the selling price of all tangible personal property
transferred by such servicemen either in the form of tangible personal property
or in the form of real estate. If imposed, such tax shall only be imposed in
¼% increments.
2)
This additional tax may not be imposed on tangible personal property
taxed at the 1% rate under the Service Occupation Tax Act [35 ILCS
115]. [65 ILCS 5/8-11-5] For guidance on the types of tangible personal
property taxed at the 1% rate, see 86 Ill. Adm. Code
130.310 and
130.311.
3)
Beginning December 1, 2019, this
tax may not be imposed on sales of aviation fuel unless the tax revenue is
expended for airport-related purposes. If a municipality does not have an
airport-related purpose to which it dedicates aviation fuel tax revenue, then
aviation fuel shall be excluded from tax. Each municipality must comply with
the certification requirements for airport-related purposes under Section 2-22
of the Retailers' Occupation Tax Act [35 ILCS 120]. [65 ILCS 5/8-11-5]
"Aviation fuel" means jet fuel and aviation gasoline.
[
35 ILCS
115/9 ]
"Airport-related purposes" has the
meaning ascribed in Section 6z-20.2 of the State Finance Act [30 ILCS
105].
This exception for aviation fuel only applies for so long as the
revenue use requirements of 49 U.S.C.
47107(b) and
49 U.S.C.
47133 are binding on the
State.
4)
The tax
imposed by a home rule municipality pursuant to this Section
and all civil penalties that may be assessed as an incident thereof
shall be collected and enforce by the Department of Revenue. [65 ILCS
5/8-11-5]
b) Passing on
the Tax
The legal incidence of the Home Rule Municipal Service
Occupation Tax is on the serviceman. Nevertheless, the General Assembly has
authorized persons subject to this tax to reimburse
themselves for their serviceman's tax liability by separately stating such tax
as an additional charge, which charge may be stated in combination, in a single
amount, with State tax which servicemen are authorized to collect under the
Service Use Tax Act [35 ILCS 115], pursuant to such bracket
schedules as the Department has prescribed. [65 ILCS
5/8-11-5] (See 86 Ill. Adm. Code 150.Table A).
c) Exclusion from "Selling Price "
Any amount added by a serviceman to the selling price of
tangible personal property as an incident to service because of a Home Rule
Municipal Service Occupation Tax, the Service Occupation Tax, the Service Use
Tax, or any other local occupation tax administered by the Department, shall
not be regarded as a part of the selling price that is subject to such Home
Rule Municipal Service Occupation Tax.
