2023 Illinois Compiled Statutes › Chapter 35 - REVENUE › 35 ILCS 185/ - Leveling the Playing Field for Illinois Retail Act. › Article 5 - Leveling the Playing Field for Illinois Retail Act

(35 ILCS 185/Art. 5 heading)
Article 5.   Leveling the Playing Field for Illinois Retail Act
(Source: P.A. 101-31, eff. 6-28-19.)
(35 ILCS 185/5-1)
Sec. 5-1. Short title. This Article may be cited as the Leveling the Playing Field for Illinois Retail Act.  References in this Article to "this Act" means this Article.
(Source: P.A. 101-31, eff. 6-28-19.)
(35 ILCS 185/5-5)
Sec. 5-5. Findings. The General Assembly finds that certified service providers and certified automated systems simplify use and occupation tax compliance for remote retailers, which fosters higher levels of accurate tax collection and remittance and generates administrative savings and new marginal tax revenue for both State and local taxing jurisdictions.  By making the services of certified service providers and certified automated systems available to remote retailers as provided in this Act, the State will substantially eliminate the burden on those remote retailers to collect and remit both State and local taxing jurisdiction use and occupation taxes.   While providing a means for remote retailers to collect and remit tax on an even basis with Illinois retailers, this Act also protects existing local tax revenue streams by retaining origin sourcing for all transactions by retailers maintaining a physical presence in Illinois.
(Source: P.A. 101-31, eff. 6-28-19; 101-604, eff. 1-1-20; 102-634, eff. 8-27-21.)
(35 ILCS 185/5-10)
Sec. 5-10. Definitions. As used in this Act:
"Certified service provider" means an agent certified by the Department to perform the remote retailer's use and occupation tax functions, as outlined in the contract between the State and the certified service provider.
"Certified automated system" means an automated software system that is certified by the State as meeting all performance and tax calculation standards required by Department rules.
"Department" means the Department of Revenue.
"Remote retailer" means a retailer as defined in Section 1 of the Retailers' Occupation Tax Act that has an obligation to collect State and local retailers' occupation tax under subsection (b) of Section 2 of the Retailers' Occupation Tax Act.
"Retailers' occupation tax" means the tax levied under the Retailers' Occupation Tax Act and all applicable local retailers' occupation taxes collected by the Department in conjunction with the State retailers' occupation tax.
(Source: P.A. 101-31, eff. 6-28-19.)
(35 ILCS 185/5-15)
Sec. 5-15. Certification of certified service providers.  The Department shall establish standards for the certification of certified service providers and certified automated systems and may act jointly with other states to accomplish these ends.
The Department may take other actions reasonably required to implement the provisions of this Act, including the adoption of rules and emergency rules and the procurement of goods and services, which also may be coordinated jointly with other states.
(Source: P.A. 101-31, eff. 6-28-19; 101-604, eff. 1-1-20.)
(35 ILCS 185/5-20)
Sec. 5-20. Provision of databases.  The Department shall, no later than July 1, 2020:
(1) provide and maintain an electronic database of     defined product categories that identifies the taxability of each category;
(2) provide and maintain an electronic database of     all retailers' occupation tax rates for the jurisdictions in this State that levy a retailers' occupation tax; and
(3) provide and maintain an electronic database that     assigns delivery addresses in this State to the applicable taxing jurisdictions.
(Source: P.A. 101-31, eff. 6-28-19; 101-604, eff. 1-1-20.)
(35 ILCS 185/5-25)
Sec. 5-25. Certification.
(a) The Department shall, no later than July 1, 2020:
(1) establish uniform minimum standards that     companies wishing to be designated as a certified service provider in this State must meet;
(2) establish uniform minimum standards that     certified automated systems must meet;
(3) establish a certification process to review the     systems of companies wishing to be designated as a certified service provider in this State or of companies wishing to use a certified automated process; this certification process shall provide that companies that meet all required standards and whose systems have been tested and approved by the Department for properly determining the taxability of items to be sold, the correct tax rate to apply to a transaction, and the appropriate jurisdictions to which the tax shall be remitted, shall be certified;
(4) enter into a contractual relationship with each     company that qualifies as a certified service provider; those contracts shall, at a minimum, provide:
(A) that the certified service provider shall be         held liable for the tax imposed under this Act and the Use Tax Act and all applicable local occupation taxes administered by the Department if the certified service provider fails to correctly remit the tax after having been provided with the tax and information by a remote retailer to correctly remit the taxes imposed under this Act and the Use Tax Act and all applicable local occupation taxes administered by the Department; if the certified service provider demonstrates to the satisfaction of the Department that its failure to correctly remit tax on a retail sale resulted from the certified service provider's good faith reliance  on incorrect or insufficient information provided by the remote retailer, the certified service provider shall be relieved of liability for the tax on that retail sale; in that case, the remote retailer is liable for any resulting tax due;
(B) the responsibilities of the certified service         provider and the remote retailers that contract with the certified service provider related to record keeping and auditing consistent with requirements imposed under the Retailers' Occupation Tax Act and the Use Tax Act;
(C) for the protection and confidentiality of tax         information consistent with requirements imposed under the Retailers' Occupation Tax Act and the Use Tax Act;
(D) that a certified service provider may claim         the discount provided for in Section 3 of the Retailers' Occupation Tax Act for the tax dollars it collects and timely remits on returns that are timely filed with the Department on behalf of remote retailers; remote retailers using a certified service provider may not claim the discount allowed in Section 3 of the Retailers' Occupation Tax Act with respect to those collections; and
(E) that the certified service provider shall         file a separate return for each remote retailer with which it has a Tax Remittance Agreement.
The provisions of this Section shall supersede the provisions of the Illinois Procurement Code.
(b) The Department may act jointly with other states to establish the minimum standards and process for certification required by paragraphs (1), (2), and (3) of subsection (a).
(c) When the systems of a certified service provider or certified automated systems are updated or upgraded, they must be recertified by the Department.  Notification of changes shall be provided to the Department prior to implementation.  Upon receipt of such notification, the Department shall review and test the changes to assess whether the updated system of the certified service provider or the updated certified automated system can properly determine the taxability of items to be sold, the correct tax rate to apply to a transaction, and the appropriate jurisdictions to which the tax shall be remitted.  The Department shall recertify updated systems that meet these requirements.  The certified service provider or retailer using a certified automated system shall be liable for any tax resulting from errors caused by use of an updated or upgraded system prior to recertification by the Department.  In addition to these procedures, the Department may periodically review the system of a certified service provider or the certified automated system used by a retailer to ensure that the system can properly determine the taxability of items to be sold, the correct tax rate to apply to a transaction, and the appropriate jurisdictions to which the tax shall be remitted.
(Source: P.A. 101-31, eff. 6-28-19; 101-604, eff. 1-1-20; 102-634, eff. 8-27-21.)
(35 ILCS 185/5-27)
Sec. 5-27. Tax remittance agreement.
(a) Before using the services of a certified service provider to remit taxes, remote retailers using a certified service provider shall enter into a tax remittance agreement with that certified service provider under which the certified service provider agrees to remit all State retailers' occupation taxes under this Act, use tax, and local occupation taxes administered by the Department for sales made by the remote retailer.  A copy of the tax remittance agreement shall be electronically filed with the Department by the certified service provider no later than 30 days prior to its effective date.
(b) A certified service provider that has entered into a tax remittance agreement with a remote retailer is required to file all returns and remit all taxes required under the tax remittance agreement, including all local occupation taxes administered by the Department, with respect to all sales for which there is not otherwise an exemption.
(Source: P.A. 101-604, eff. 1-1-20.)
(35 ILCS 185/5-30)
Sec. 5-30. Database; relief from liability; annual verification; refunds.
(a) The Department shall, to the best of its ability, utilize an electronic database to provide information assigning purchaser addresses to the proper local taxing jurisdiction.
(b) Remote retailers using certified service providers or certified automated systems and their certified service providers or certified automated systems providers are relieved from liability to the State for having remitted the incorrect amount of use or occupation tax resulting from a certified service provider or certified automated system relying, at the time of the sale, on: (1) erroneous data provided by the State in database files on tax rates, boundaries, or taxing jurisdictions; or (2) erroneous data provided by the State concerning the taxability of products and services.
(c) Beginning February 1, 2022 and on or before February 1 of each year thereafter, the Department shall make available to each local taxing jurisdiction the taxing jurisdiction's boundaries, determined by the Department, for its verification. Jurisdictions shall verify these taxing jurisdiction boundaries and notify the Department of any changes, additions, or deletions by April 1 of each year in the form and manner required by the Department. The Department shall use its best judgment and information to confirm the information provided by the taxing jurisdictions and update its database. The Department shall administer and enforce such changes on the first day of the next following July.
(d) The clerk of any municipality or county from which territory has been annexed or disconnected shall notify the Department of Revenue of that annexation or disconnection in the form and manner required by the Department. Required documentation shall include a certified copy of the plat of annexation or, in the case of disconnection, the ordinance, final judgment, or resolution of disconnection together with an accurate depiction of the territory disconnected. Notification shall be provided to the Department either (i) on or before the first day of April, whereupon the Department shall confirm the information provided by the municipality or county and update its database and proceed to administer and enforce the confirmed changes on the first day of July next  following the proper notification; or (ii) on or before the first day of October, whereupon the Department shall confirm the information provided by the municipality or county and update its database and proceed to administer and enforce the confirmed changes on the first day of January next following proper notification.
(e)  Nothing in this Section affects a customer's right to seek a refund from the remote retailer as provided in this Act.
(Source: P.A. 101-31, eff. 6-28-19; 101-604, eff. 1-1-20.)
(35 ILCS 185/5-97)
Sec. 5-97. Severability. The provisions of this Act are severable under Section 1.31 of the Statute on Statutes.
(Source: P.A. 101-31, eff. 6-28-19.)