Illinois State and Local Tax Updates July 2019

Illinois: electronic cigarettes now considered tobacco products

July 31, 2019

Electronic cigarettes are now considered “tobacco products.” An e-cigarette is defined as any device that employs a battery to heat a solution to produce a vapor intended for inhalation, any cartridge of a solution intended to be used with or in the device or to refill the device, or any solution, whether or not it contains nicotine, intended for use in the device. Beginning on July 1, 2019, the tax on e-cigarettes will be imposed at the rate of 15% of the wholesale price of electronic cigarettes sold or otherwise disposed of to retailers or consumers located in Illinois.


New Illinois parking tax goes into effect Jan 1, 2020

July 31, 2019

Beginning on Jan. 1, 2020, be prepared for a new parking tax. The tax will be levied for the use of a parking space in a parking lot or garage at the rate of 6% of the purchase price for the parking space paid for on an hourly, daily or weekly basis, and 9% of the purchase price for the parking space paid for on a monthly or annual basis. The tax will be collected from the purchaser by the operator. All returns and payments must be done electronically.


Amusement tax ordinance preempted by Coast Guard and Maritime Transportation Security Act

July 24, 2019

An Illinois Appellate Court determined that the amusement tax ordinance levying taxes on a taxpayer was preempted by the Coast Guard and Maritime Transportation Security Act from 2006 through 2012. Subsequent payments were entitled to a credit because the taxpayer’s licensing fees were relevant to a patron’s liability for the amusement tax. The taxpayer, a Chicago tour boat operator, didn’t collect amusement tax between 2006 and 2012 because he’d received a letter from the City of Chicago stating that patrons qualified for an amusement tax credit if an amusement operator had an agreement with the city to pay for the operator’s use of the public way. (Dkt. No. 1-18-1428)


State Comptroller to use Illinois Property Tax Relief Fund to pay rebates to residential property taxpayers

July 24, 2019

Beginning in 2021, the Illinois Property Tax Relief Fund will be used by the State Comptroller to pay rebates to residential property taxpayers in Illinois. The State Comptroller will calculate the property tax rebate amount by dividing the total amount appropriated from the Illinois Property Tax Relief Fund for making rebates by the total number of homestead exemptions granted for property in Illinois. The county treasurer will reduce each property tax bill for homestead property by the property tax rebate amount and will include a separate line item on each property tax bill stating the property tax rebate amount from the Illinois Property Tax Relief Fund.


Illinois enacts tax credit for data center investments

July 17, 2019

The Department of Commerce and Economic Opportunity will issue a credit certification against Illinois corporate and individual income taxes to qualifying Illinois data centers. For taxable years beginning on January 1, 2019, the department will award data center construction employment tax credits against Illinois corporate and individual income taxes. A data center construction employment tax credit is equal to 20% of the wages paid during the taxable year to a full-time or part-time employee of a construction contractor employed by a certified data center.


New sports-wagering taxes now in effect in Illinois

July 17, 2019

To hold a license to operate sports wagering, a master sports wagering licensee must pay 15% of its adjusted gross wagering receipts to the state. The taxes levied and collected are due no later than the last day of the month following the calendar month in which the adjusted gross sports wagering receipts were received. In addition, Illinois will collect 2% of the adjusted gross receipts from sports wagers that are placed within a home rule county with a population of more than three million inhabitants.


Illinois extends deadline for Franchise Tax and License Fee Amnesty Act

July 10, 2019

Illinois extends the deadline for its Franchise Tax and License Fee Amnesty Act. Between October 1, 2019, and November 15, 2019, all taxpayers owing a license fee that was for any tax period ending after March 15, 2008, and on or before June 30, 2019, will be able to make payment under the amnesty program.


Marketplace facilitators and sellers must collect Illinois use tax January 1, 2020

July 10, 2019

Illinois Governor J.B. Pritzker has signed legislation requiring marketplace facilitators and marketplace sellers to collect Illinois use tax beginning January 1, 2020. A marketplace facilitator is required to collect tax if the cumulative gross receipts from sales of tangible personal property to purchasers in Illinois by the marketplace facilitator and by marketplace sellers are $100,000 or more; or the marketplace facilitator and marketplace sellers cumulatively enter into 200 or more separate transactions for the sale of tangible personal property to purchasers in Illinois. The legislation also expands the manufacturing and assembling machinery and equipment exemption.


New Illinois tax requirements for electronic cigarettes now in effect

July 3, 2019

The Illinois Department of Revenue has issued a bulletin on the Tobacco Products Tax Act. Effective July 1, 2019, the act defines an e-cigarette as 1) any device that employs a battery to heat a substance to produce a vapor intended for inhalation, 2) any cartridge of a substance intended to be used with the device, or 3) any substance, regardless of whether it contains nicotine, intended for use in the device. The tobacco products tax is imposed on distributors at the rate of 15% of the wholesale price of the e-cigarette sold to retailers or consumers in Illinois. For more information: https://bit.ly/2KJHLi6


Illinois legalizes marijuana and imposes new tax to generate revenue

July 3, 2019

The Cannabis Purchaser Excise Tax must be collected by the cannabis retailer at the following rates: Cannabis with a THC level at or below 35% is taxed at 10% of the purchase price; cannabis with a THC level above 35% is taxed at a rate of 25% of the purchase price; and cannabis-infused product is taxed at a rate of 20% of the purchase price. The tax won’t be imposed on cannabis that’s subject to tax under the Compassionate Use of Medical Cannabis Pilot Program Act. The Cannabis Cultivation Privilege Tax is applicable beginning January 1, 2020.

 

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