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Three Sales Tax Bills Sent to Governor

June 3, 2014 | Legislative briefs

from the Northwest Municipal Conference Legislative Update

Three bills addressing sales tax issues advanced in the final days of session and will be sent to the Governor for his consideration. The first, Senate Bill 2612 (Sen. Dan Kotowski / Rep. Barbara Flynn Currie), is part of the effort by the Regional Transportation Authority (RTA) to address the diversion of sales taxes that is costing Chicago area communities sales tax revenues. Senate Bill 2612 clarifies that the sales taxes are to be sourced at the location purchased for the following sales: over-the-counter sales (even when the delivery of the product purchased is arranged); online, in writing or phone sales where the customer picks up the product at that location; sales of food, beverages and other products through a vending machine; and sales of minerals. Senate Bill 2612 also creates a task force to study how to handle sourcing for sales tax purposes for other types of purchases.

The second sales tax bill, Senate Bill 352 (Sen. Toi Hutchinson / Rep. Barbara Flynn Currie), restores the sales tax for purchases made online from retailers that do not have a physical presence (nexus) in Illinois. Similar legislation was previously approved but overturned in court. The newer version addresses the previous issues that led online retailers to oppose it.

The third sales tax bill, House Bill 3885 (Rep. Natalie Manley / Sen. Jennifer Bertino-Tarrant), allows all municipalities to enter into agreements with the Department of Revenue to provide net revenue distributed to the requesting municipality that is directly related to the requesting municipality's local share of the proceeds under the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act, and any locally imposed retailers' occupation tax or service occupation tax.

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