a) Authority to
Impose Tax
1) Pursuant to the Non-Home Rule
Municipal Retailers' Occupation Tax Act [65 ILCS 5/8-11-1.3], the
corporate authorities of a non-home rule municipality may impose, by ordinance
or resolution adopted in the manner described in Section 8-11-1.1, a tax upon
all persons engaged in the business of selling tangible personal property,
other than on an item of tangible personal property which is titled and
registered by an agency of this State's government, at retail
in the municipality. If imposed, the tax shall be imposed on the gross receipts
from such sales made in the course of such business. The proceeds of the tax
may be used for public infrastructure or for property tax relief or both, as
defined in Section 8-11-1.2.
2)
The tax imposed may not be more
than 1% and may be imposed only in ¼% increments.
3)
If the tax is approved by
referendum on or after July 14, 2010, and before August 5, 2024, the corporate
authorities of the non-home rule municipality may, until January 1, 2031, use
the proceeds of the tax for expenditure or municipal operations, in addition to
or in lieu of any expenditure on public infrastructure or for property tax
relief. If the tax is approved by ordinance or resolution adopted on or after
August 5, 2024, the corporate authorities of the non-home rule municipality,
may until January 1, 2031, use the proceeds of the tax for expenditure on
municipal operations, in addition to or in lieu of any expenditure on public
infrastructure or for property tax relief. [65 ILCS
5/8-11-1.3]
4)
The tax may
not be imposed on tangible personal property taxed at the 1% rate under the
Retailers' Occupation Tax Act [35 ILCS 120]. [65 ILCS 5/8-11-1.3] For
guidance on the types of tangible personal property taxed at the 1% rate, see
86 Ill. Adm. Code
130.310 and
130.311.
5)
Beginning December 1, 2019, this
tax is not 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 is excluded from the 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 5/8-11-1.3]
"Aviation fuel" means jet fuel and aviation gasoline.
[35 ILCS
120/3 ] "Airport-related purposes" has the
meaning ascribed in Section 6z-20.2 of the State Finance Act [30 ILCS
105]. This exclusion for aviation fuel only applies U.S.C. 47133 are
binding on the municipality.
6)
The tax imposed by a municipality
pursuant to this Section and all civil penalties that may be
assessed as an incident thereof shall be collected and enforced by the
Department of Revenue. [65 ILCS 5/8-11-1.3]
b) Passing on the Tax
The legal incidence of the Non-Home Rule Municipal Retailers'
Occupation Tax is on the seller. Nevertheless, the General Assembly has
authorized persons subject to this tax to reimburse
themselves for their seller'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 sellers are required to collect under the Use Tax
Act [35 ILCS 105], pursuant to such bracket schedules as the
Department has prescribed. [65 ILCS 5/8-11-1.3] (See
86 Ill. Adm. Code 150.Table A).
c) Exclusion from "Gross Receipts"
Any amount added to the selling price of tangible personal
property by the seller because of a Non-Home Rule Municipal Retailers'
Occupation Tax, the Retailers' Occupation Tax, the Use Tax Act, or any other
local occupation tax administered by the Department, and collected from the
purchaser, shall not be regarded as a part of the seller's gross receipts that
are subject to such Non-Home Rule Municipal Retailers' Occupation
Tax.
