Special Tax for Public Safety           

[APRIL 2, 2005]  Special County Retailers' Occupation Tax for Public Safety:  Statutory Reference

55 ILCS 5/5-1006.5

Definition

            County governments are authorized to impose, with voter approval, a countywide tax (in 0.25 percent increments) to be collected by the department. The tax is imposed on the same general merchandise base as the state sales tax, excluding titled or registered tangible personal property (such as vehicles, watercraft, aircraft, trailers, and mobile homes) and qualifying food, drugs and medical appliances.

 Filing Requirements

Affected retailers and servicepersons report the tax on Form ST-1, Sales and Use Tax Return. If imposed, the preprinted rate on Form ST-1 will include this tax. The due date is the same as provided for in the Retailers’ Occupation Tax Act, the Service Occupation Tax Act, and the Use Tax Act. For more information, see “Retailers’ Occupation Tax, Service Occupation Tax, Service Use Tax, and Use Tax”

Retailers’ Occupation Tax, Service Occupation Tax, Service Use Tax, Use Tax

Statutory Reference

• Retailers’ Occupation Tax 35 ILCS 120/1 to 120/14

• Service Occupation Tax 35 ILCS 115/1 to 115/21

• Service Use Tax 35 ILCS 110/1 to 110/21

• Use Tax 35 ILCS 105/1 to 105/22

Definition

“Sales tax” is imposed on a seller’s receipts from sales of tangible personal property for use or consumption. Tangible personal property does not include real estate, stocks, bonds, or other “paper” assets representing an interest.

If the seller (typically an out-of-state business, such as a catalog company or a retailer making sales on the Internet) does not charge Illinois Sales Tax, the purchaser must pay the tax directly to the department.

The term “sales tax” actually refers to several tax acts. Sales tax is a combination of “occupation” taxes that are imposed on sellers’ receipts and “use” taxes that are imposed on amounts paid by purchasers. Sellers owe the occupation tax to the department; they reimburse themselves for this liability by collecting use tax from the buyers. “Sales tax” is the combination of all state, local, mass transit, water commission, home rule occupation and use, non-home rule occupation and use, park district, and county public safety taxes.

For purposes of this document, Illinois Sales Tax has three rate structures — one for qualifying food, drugs, and medical appliances; one for items required to be titled or registered; and another for all other general merchandise.

“Qualifying food” applies to food not prepared by the retailer for immediate consumption, such as grocery store food items. “Qualifying food, drugs, and medical appliances” include

• food that has not been prepared for immediate consumption, such as most food sold at grocery stores, excluding hot foods, alcoholic beverages, and soft drinks;

• prescription medicines and nonprescription items claimed to have medicinal value, such as aspirin, cough medicine, medicated hand lotion, and fluoride toothpaste; and

• prescription and nonprescription medical appliances that directly replace a malfunctioning part of the human body, such as corrective eyewear, contact lenses, prostheses, insulin syringes, and dentures.

“Vehicles” include

• motor vehicles, ATVs, watercraft, aircraft, trailers, and mobile homes; and

• motor vehicles, aircraft, and vessels owned by a business when that business moves into or relocates to Illinois.

“Other general merchandise” includes sales of most tangible personal property including sales of

• soft drinks;

• prepared food such as food purchased at a restaurant;

• photo processing (getting pictures developed);

• prewritten and “canned” computer software;

• prepaid telephone calling cards and other prepaid telephone calling arrangements;

• repair parts and other items transferred or sold in conjunction with providing a service under certain circumstances based on the actual selling price.

Tax rates

The fundamental rate for

• qualifying food, drugs, and medical appliances is 1 percent.

• items required to be titled or registered is 6.25 percent.

• other general merchandise is 6.25 percent.

Depending upon the location of the sale, the actual sales tax rate may be higher than the fundamental rate because of home rule, non-home rule, water commission, mass transit, park district, and county public safety sales taxes. Motor fuel distributors must collect “prepaid sales tax” on the motor fuel sold for resale to a retailer who is not an Illinois licensed motor fuel distributor or supplier of diesel and dieselhol. The retailer prepays the sales tax to the motor fuel distributor and then claims a credit for the prepaid tax when the sales tax return is filed. The prepaid sales tax rates are $0.05 per gallon for sales of gasohol and $0.06 per gallon for all other motor fuels.

NOTE: The rate for reformulated fuel that is labeled as gasohol but contains over 10 percent alcohol is $0.06 per gallon.

Local Taxes

            Units of local government may impose taxes or fees, which the department does not collect. Contact your units of local government (county, municipal, mass transit, etc.) to determine if you must pay any additional taxes or fees not listed below. The following local taxes, which the department collects, may be imposed. Except as noted below, the preprinted rate on the return will include any locally imposed taxes.

• Chicago Home Rule Municipal Soft Drink Retailers’ Occupation Tax

• Chicago Home Rule Use Tax

• County Motor Fuel Tax

• County Public Safety Tax

• DuPage Water Commission Taxes

• Home Rule County Taxes

• Home Rule or Non-home Rule Municipal Taxes

• Mass Transit District Taxes (Metro-East Mass Transit (MED) Taxes and Regional Transportation Authority (RTA) Taxes)

• Metro-East Park and Recreation District Taxes

• Metropolitan Pier and Exposition Authority (MPEA) Food and Beverage Tax

• Special County Retailers’ Occupation Tax for Public Safety

Exemptions

Sales - The following examples of sales of tangible personal property are exempt from tax:

• Sales to state, local, and federal governments

• Sales to not-for-profit organizations that are exclusively charitable, religious, or educational

• Sales of newspapers and magazines

• Sales of tangible personal property to interstate carriers for hire used as rolling stock (e.g., semitractor trailers, railroad cars)

• Sales of machinery and equipment that will be used primarily in manufacturing or assembling of tangible personal property for Wholesale or retail sale or lease and production agriculture

• Qualified sales of building materials that will be incorporated into real estate as part of a project for which a Certificate of Eligibility for Sales Tax Exemption has been issued by the enterprise zone administrator

• Qualifying purchases of tangible personal property used in a manufacturing or assembling process by businesses located in an enterprise zone and certified by the Department of Commerce and Community Affairs as qualifying to make these purchases because jobs will be created or retained

• Sales of legal tender, medallions, and gold bullion issued by qualifying governments

• Fuel used for international flights

• Certain second division motor vehicles and trailers if the Commercial Distribution Fee administered by the Secretary of State is paid.

Organizations — Qualified organizations, as determined by the department, are exempt from paying sales and use taxes in Illinois. Upon approval, we issue each organization a sales tax exemption number. The organization must give this number to a merchant in order to make purchases tax-free. Examples of exempt organizations are listed below.

• State, local, and federal governments

• Not-for-profit organizations that are exclusively charitable, religious, or educational

• Certain senior citizen organizations

• County fair associations

• Not-for-profit organizations that are operated primarily for arts or cultural purposes

• Certain licensed day care centers

Examples of organizations that do not have to collect sales tax on their retail sales

• Elementary or secondary teacher-sponsored student organizations

• Not-for-profit organizations that are exclusively charitable, religious, or educational who make sales to their members primarily for the purposes of the selling organization (e.g., uniforms, insignia, and scouting equipment by Scout organizations to their members; bible sales by a church to its members)

• Certain sales by not-for-profit service organizations operated for the benefit of persons 65 years of age or older

Filing and payment requirements

• Returns

• Titled or registered items — Registered Illinois dealers who sell vehicles, watercraft, aircraft, trailers, and mobile homes must file Form ST-556, Sales Tax Transaction Return, within 20 days of the delivery date.

• Individuals who purchase items that must be titled or registered in Illinois from an out-of-state retailer (i.e., dealer, lending institution, leasing company selling at retail, or leasing company leasing items to Illinois residents) must file Form RUT-25, Use Tax Transaction Return, on the date the Illinois title and registration is applied for, but not more than 30 days after the date the item is brought into Illinois.

• Individuals who purchase (or acquire by gift or transfer) motor vehicles that must be titled or registered from another individual or private party must file Form RUT-50, Vehicle Use Tax Transaction Return, within 30 days from the date the vehicle is purchased or acquired. (See “Vehicle Use Tax”) Individuals who acquire (by gift, donation, transfer, or non-retail purchase) aircraft or watercraft that must be registered must file Form RUT-75, Aircraft/Watercraft Use Tax Transaction Return, no later than 30 days from the date the item was acquired or the date the item was brought into Illinois, whichever is later. (See “Aircraft Use Tax” and “Watercraft Use Tax”.)

• Prepaid sales tax on motor fuel — Motor fuel distributors file Form PST-1, Prepaid Sales Tax Return, monthly on the 20th day of the month following the month for which the return is filed.

• NOTE:Retailers claim a credit for the amount of prepaid sales tax on Form ST-1, Sales and Use Tax Return, Line 17.

Qualifying food, drugs, and medical appliances and other general merchandise — Registered Illinois retailers and servicepersons file Form ST-1, Sales and Use Tax Return, monthly, quarterly, or annually, based on the taxpayer’s average monthly liability.

The department determines how often a return must be filed.

• A monthly return is due the 20th day of the month following the month for which the return is filed.

• A quarterly return is due the 20th day of the month following the quarter for which the return is filed.

• An annual return is due January 20th of the year following the year for which the return is filed.

• Illinois residents who make purchases from non-registered out-of-state retailers (such as catalog or Internet transactions) or those who make purchases from servicepersons who do not pay use tax directly to us must file Form ST-44, Illinois Use Tax Return.

• If less than $600 is owed, the return and tax is due April 15th of the year after the year in which the purchase was made.

• If the total tax liability for the year is more than $600, the return and tax is due the last day of the month following the month in which the purchase was made.

• Tangible personal property sold at retail over the Internet is taxed in the same manner as any other retail sale. Generally, if the item of tangible personal property is purchased from an Illinois retailer, the retailer is responsible for collecting and remitting Illinois sales tax.

• out-of-state retailer who does not collect Illinois sales tax, the purchaser owes use tax and is responsible for paying use tax directly to the department using Form ST-44.

• Quarter-monthly payments — If a retailer or serviceperson’s average monthly liability is $20,000 or more, quarter-monthly payments must be made. Payments are due the 7th, 15th, 22nd, and last day of the month. Because the statutory threshold for mandated electronic funds transfer (EFT) program participation is $200,000 annual liability, most taxpayers will remit their quarter-monthly payments by EFT. Taxpayers who mail their quarter-monthly remittances to the department must complete Form RR-3, Sales and Use Tax Quarter-monthly Payment.

• NOTE: Electronic funds transfer program participants do not complete or mail Form RR-3.

• If a motor fuel distributor’s average monthly liability is $20,000 or more, quarter-monthly payments must be made. Payments are due the 7th, 15th, 22nd, and last day of the month. Because the statutory threshold for mandated electronic funds transfer (EFT) program participation is $200,000 annual liability, most taxpayers will remit their quarter-monthly payments by EFT. Taxpayers who mail their quartermonthly remittances to the department must complete Form PST-3, Prepaid Sales Tax on Motor Fuel.

• NOTE: Electronic funds transfer program participants do not complete or mail Form PST-3.

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Vote “YES” for the Public Safety Tax to keep vital Logan County services!

     Public Safety Tax   

If Logan County voters reject a 0.25% Public Safety tax increase, serious consequences will result:
1. Sheriff’s Dept.: Public safety will be at risk because 7 deputies & 3 other employees will be cut
2. Highway Dept.: Snowplowing, road & ditch work will be reduced because 2-3 employees will be cut
3. County & Circuit Clerk: Services will be reduced as 4 employees will be cut
4. Animal Control: Recent improvements in jeopardy. Hours of operation & employee hours will be cut
5. Logan County Health Dept.: Services for many Logan County residents will be severely reduced as 6 employees will be cut; Rural Health Mobile Unit services will be eliminated; clinic hours reduced

The Lincoln & Logan County Development Partnership supports the Public Safety tax increase.  Quality of life for many Logan County residents will suffer if this is not approved.
For more information, please contact:

Elizabeth Davis Ron Schilling Bobbi Abbott Dave Hawkinson Marty Ahrends Grant Evitts Dan Freesmeier

Todd Lowman Jerry Johnson Jim Hawes Marty Neitzel Bill Glaze Paul Short

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