65 ILCS 5/8-11-5
2021 Illinois Compiled Statutes|Chapter 65 - MUNICIPALITIES|65 ILCS 5/ - Illinois Municipal Code.|Article 8 - Finance

 (from Ch. 24, par. 8-11-5)Sec. 8-11-5. Home Rule Municipal Service Occupation Tax Act. 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 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 as an incident to a sale of  service.  If imposed, such tax shall only be imposed in 1/4% increments. On  and after September 1, 1991, this additional tax may not be imposed on tangible personal property taxed at the 1% rate under the Retailers' Occupation Tax Act. 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.  For purposes of this Section, "airport-related purposes" has the meaning ascribed in Section 6z-20.2 of the State Finance Act.  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.  The changes made to this Section by this amendatory Act of the 101st General Assembly are a denial and limitation of home rule powers and functions under subsection (g) of Section 6 of Article VII of the Illinois Constitution.  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 enforced by the State  Department of Revenue. The certificate of registration which is issued  by the Department to a retailer under the Retailers' Occupation Tax  Act or under the Service Occupation Tax Act shall permit  such registrant to engage in a business which is taxable under any  ordinance or resolution enacted pursuant to this Section without  registering separately with the Department under such ordinance or  resolution or under this Section.  The Department shall have full power  to administer and enforce this Section; to collect all taxes and  penalties due hereunder; to dispose of taxes and penalties so collected  in the manner hereinafter provided, and to determine all rights to  credit memoranda arising on account of the erroneous payment of tax or  penalty hereunder. In the administration of, and compliance with, this  Section the Department and persons who are subject to this Section  shall have the same rights, remedies, privileges, immunities, powers and  duties, and be subject to the same conditions, restrictions,  limitations, penalties and definitions of terms, and employ the same  modes of procedure, as are prescribed in Sections 1a-1, 2, 2a, 3 through  3-50 (in respect to all provisions therein other than the State rate of  tax), 4 (except that the reference to the State shall be to the taxing  municipality), 5, 7, 8 (except that the jurisdiction to which the tax shall  be a debt to the extent indicated in that Section 8 shall be the taxing  municipality), 9 (except as to the disposition of taxes and penalties  collected, and except that the returned merchandise credit for this  municipal tax may not be taken against any State tax, and except that the retailer's discount is not allowed for taxes paid on aviation fuel that are subject to the revenue use requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133), 10, 11, 12  (except the reference therein to Section 2b of the Retailers' Occupation  Tax Act), 13 (except that any reference to the State shall mean the  taxing municipality), the first paragraph of Section 15, 16, 17  (except that credit memoranda issued hereunder may not be used to  discharge any State tax liability), 18, 19 and 20 of the Service  Occupation Tax Act and Section 3-7 of the Uniform Penalty and Interest Act,  as fully as if those provisions were set forth herein.No tax may be imposed by a home rule municipality pursuant to this  Section unless such municipality also imposes a tax at the same rate  pursuant to Section 8-11-1 of this Act.Persons subject to any tax imposed pursuant to the authority granted  in this Section may reimburse themselves for their serviceman's tax  liability hereunder 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, pursuant to such bracket schedules as the  Department may prescribe.Whenever the Department determines that a refund should be made under  this Section to a claimant instead of issuing credit memorandum, the  Department shall notify the State Comptroller, who shall cause the  order to be drawn for the amount specified, and to the person named,  in such notification from the Department.  Such refund shall be paid by  the State Treasurer out of the home rule municipal retailers' occupation  tax fund or the Local Government Aviation Trust Fund, as appropriate.Except as otherwise provided in this paragraph, the Department shall forthwith pay over to the State Treasurer, ex officio, as trustee, all taxes and penalties collected hereunder for deposit into the Home Rule Municipal Retailers' Occupation Tax Fund.   Taxes and penalties collected on aviation fuel sold on or after December 1, 2019, shall be immediately paid over by the Department to the State Treasurer, ex officio, as trustee, for deposit into the Local Government Aviation Trust Fund.  The Department shall only pay moneys into the Local Government Aviation Trust Fund under this Section 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 municipality.As soon as possible after the first day of each month, beginning January 1, 2011, upon certification of the Department of Revenue, the Comptroller shall order transferred, and the Treasurer shall transfer, to the STAR Bonds Revenue Fund the local sales tax increment, as defined in the Innovation Development and Economy Act, collected under this Section during the second preceding calendar month for sales within a STAR bond district.After the monthly transfer to the STAR Bonds Revenue Fund, on  or before the 25th day of each calendar month, the Department shall  prepare and certify to the Comptroller the disbursement of stated sums  of money to named municipalities, the municipalities to be those from  which suppliers and servicemen have paid taxes or penalties hereunder to  the Department during the second preceding calendar month. The amount  to be paid to each municipality shall be the amount (not including credit  memoranda and not including taxes and penalties collected on aviation fuel sold on or after December 1, 2019) collected hereunder during the second preceding calendar  month by the Department, and not including an amount equal to the amount  of refunds made during the second preceding calendar month by the  Department on behalf of such municipality, and not including any amounts that are transferred to the STAR Bonds Revenue Fund, less 1.5% of the remainder, which the Department shall transfer into the Tax Compliance and Administration Fund. The Department, at the time of each monthly disbursement to the municipalities, shall prepare and certify to the State Comptroller the amount to be transferred into the Tax Compliance and Administration Fund under this Section. Within 10 days after receipt, by  the Comptroller, of the disbursement certification to the municipalities and the Tax Compliance and Administration Fund  provided for in this Section to be given to the Comptroller by the  Department, the Comptroller shall cause the orders to be drawn for the  respective amounts in accordance with the directions contained in such  certification.In addition to the disbursement required by the preceding paragraph and  in order to mitigate delays caused by distribution procedures, an  allocation shall, if requested, be made within 10 days after January 14, 1991,  and in November of 1991 and each year thereafter, to each municipality that  received more than $500,000 during the preceding fiscal year, (July 1 through  June 30) whether collected by the municipality or disbursed by the Department  as required by this Section. Within 10 days after January 14, 1991,  participating municipalities shall notify the Department in writing of their  intent to participate.  In addition, for the initial distribution,  participating municipalities shall certify to the Department the amounts  collected by the municipality for each month under its home rule occupation and  service occupation tax during the period July 1, 1989 through June 30, 1990.  The allocation within 10 days after January 14, 1991,  shall be in an amount equal to the monthly average of these amounts,  excluding the 2 months of highest receipts.  Monthly average for the period  of July 1, 1990 through June 30, 1991 will be determined as follows:  the  amounts collected by the municipality under its home rule occupation and  service occupation tax during the period of July 1, 1990 through September 30,  1990, plus amounts collected by the Department and paid to such  municipality through June 30, 1991, excluding the 2 months of highest  receipts.  The monthly average for each subsequent period of July 1 through  June 30 shall be an amount equal to the monthly distribution made to each  such municipality under the preceding paragraph during this period,  excluding the 2 months of highest receipts.  The distribution made in  November 1991 and each year thereafter under this paragraph and the  preceding paragraph shall be reduced by the amount allocated and disbursed  under this paragraph in the preceding period of July 1 through June 30.  The Department shall prepare and certify to the Comptroller for  disbursement the allocations made in accordance with this paragraph.Nothing in this Section shall be construed to authorize a  municipality to impose a tax upon the privilege of engaging in any  business which under the constitution of the United States may not be  made the subject of taxation by this State.An ordinance or resolution imposing or discontinuing a tax hereunder or  effecting a change in the rate thereof shall be adopted and a certified  copy thereof filed with the Department on or before the first day of June,  whereupon the Department shall proceed to administer and enforce this  Section as of the first day of September next following such adoption and  filing.  Beginning January 1, 1992, an ordinance or resolution imposing or  discontinuing the tax hereunder or effecting a change in the rate thereof  shall be adopted and a certified copy thereof filed with the Department on  or before the first day of July, whereupon the Department shall proceed to  administer and enforce this Section as of the first day of October next  following such adoption and filing. Beginning January 1, 1993, an ordinance  or resolution imposing or discontinuing the tax hereunder or effecting a  change in the rate thereof shall be adopted and a certified copy thereof  filed with the Department on or before the first day of October, whereupon  the Department shall proceed to administer and enforce this Section as of  the first day of January next following such adoption and filing.  However, a municipality located in a county with a population in excess of  3,000,000 that elected to become a home rule unit at the general primary  election in 1994 may adopt an ordinance or resolution imposing the tax under  this Section and file a certified copy of the ordinance or resolution with the  Department on or before July 1, 1994. The Department shall then proceed to  administer and enforce this Section as of October 1, 1994.   Beginning April 1, 1998, an ordinance or  resolution imposing or  discontinuing the tax hereunder or effecting a change in the rate thereof shall  either (i) be adopted and a certified copy thereof filed with the Department on  or  before the first day of April, whereupon the Department shall proceed to  administer and enforce this Section as of the first day of July next following  the adoption and filing; or (ii) be adopted and a certified copy thereof filed  with the Department on or before the first day of October, whereupon the  Department shall proceed to administer and enforce this Section as of the first  day of January next following the adoption and filing.Any unobligated balance remaining in the Municipal Retailers' Occupation  Tax Fund on December 31, 1989, which fund was abolished by Public Act  85-1135, and all receipts of municipal tax as a result of audits of  liability periods prior to January 1, 1990, shall be paid into the Local  Government Tax Fund, for distribution as provided by this Section prior to  the enactment of Public Act 85-1135. All receipts of municipal tax as a  result of an assessment not arising from an audit, for liability periods  prior to January 1, 1990, shall be paid into the Local Government Tax Fund  for distribution before July 1, 1990, as provided by this Section prior to  the enactment of Public Act 85-1135, and on and after July 1, 1990, all  such receipts shall be distributed as provided in Section 6z-18 of the  State Finance Act.As used in this Section, "municipal" and "municipality" means a city,  village or incorporated town, including an incorporated town which has  superseded a civil township.This Section shall be known and may be cited as the Home Rule Municipal  Service Occupation Tax Act.  (Source: P.A. 100-23, eff. 7-6-17; 100-587, eff. 6-4-18; 100-1171, eff. 1-4-19; 101-10, eff. 6-5-19; 101-81, eff. 7-12-19; 101-604, eff. 12-13-19.)