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NON-TITLED PERSONAL PROPERTY USE TAX

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Full Text of Legislation
Text of Amendment
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Date Introduced: Thursday, October 18, 2012
Date Passed:
Friday, November 09, 2012

Committees:
,Finance Committee
Sponsors:
Deborah Sims,Edwin Reyes,Jeffrey R. Tobolski,Jerry Butler,Jesus G. Garcia,Joan Patricia Murphy,John P. Daley,Larry Suffredin,Robert Steele,Toni Preckwinkle
Co-Sponsors:

Summary:

Creates the Cook County Use of Non-Titled Personal Property Tax Ordinance with a tax rate of 1.25% of the non-titled personal property’s value when first subject to use in the County.  Creates certain exemptions including food and medicine.


Activity Log:


Thursday, October 18, 2012 Introduced County Board :
Thursday, October 18, 2012 Referred to Finance Committee :
Friday, November 02, 2012 Amended by Finance Committee :
Friday, November 02, 2012 Approved by Finance Committee :
Friday, November 09, 2012 Approved by County Board :

Full Text of Legislation:

Submitting a Proposed Ordinance sponsored by:

 

TONI PRECKWINKLE, President, Cook County Board of Commissioners and JERRY BUTLER, JOHN P. DALEY, JESUS G. GARCIA, JOAN PATRICIA MURPHY, EDWIN REYES, DEBORAH SIMS, ROBERT STEELE, LARRY SUFFREDIN and JEFFREY R. TOBOLSKI, Commissioners

  

NON-TITLED PERSONAL PROPERTY USE TAX

 

WHEREAS, businesses in Cook County who purchase non-titled tangible personal property in Cook County often are at a competitive disadvantage among competitors who acquire non-titled  personal property outside of Cook County for use within Cook County; and

 

WHEREAS, businesses in Cook County that sell non-titled personal property often are at a competitive disadvantage among competitors that sell non-titled personal property outside of Cook County for use within Cook County; and

 

WHEREAS, due to changes in industry norms and practices, there has appeared a widening tax loophole through which persons in Cook County are in a position to purposely avoid the sales tax associated with the acquisition of non-titled personal property for use within Cook County; and

 

WHEREAS, it is in the interest of Cook County to take steps that will level the playing field among business interests, close tax loopholes, and incentivize the purchase of non-titled personal property within the County for use within Cook County.

 

NOW THEREFORE BE IT ORDAINED, by the Cook County Board of Commissioners that Chapter 74 Taxation, Article XIX Non-Titled Personal Property Use Tax, Sec. 74-650 through Sec. 74-662 of the Cook County Code, is hereby enacted as follows:

 

ARTICLE XIX.  NON-TITLED PERSONAL PROPERTY USE TAX.

 

Sec. 74-650. - Short title.

 

This Article shall be known and may be cited as the “Cook County Use of Non-Titled Personal Property Tax Ordinance.” 

 

Sec. 74-651. - Definitions.

 

(a)    The following words, terms and phrases, when used in this article, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:

County means the County of Cook.

 

Department means the county’s department of revenue.

 

Director means the director of the department.

 

Illinois Use Tax Act means the State of Illinois’ Use Tax Act, codified at 35 ILCS 1-5/1 et. seq., as from time to time amended, or any successor statute.

 

Non-titled personal property means tangible personal property, as set forth in the Illinois Use Tax Act, other than tangible personal property that is registered or titled with an agency of the State.

 

Person means any means any individual, corporation, limited liability corporation, organization, government, governmental subdivision or agency, business trust, estate, trust, partnership, association and any other legal entity.

 

Personal property means any tangible property other than realty.

 

 Use means the exercise of any right to, or power over, personal property incident to ownership of that property, but does not include (1) the sale of personal property in any form as personal property in the regular course of business to the extent that the property is not first subjected to a use for which it was purchased; (2) the use of property for demonstration purposes; (3) the interim use of personal property by a retailer before the retailer sells the property; or (4) the physical incorporation of personal property, to the extent first subjected to a use for which is was purchased, as an ingredient or constituent into other personal property which is sold in the regular course of business or which the person incorporating such ingredient or constituent therein has undertaken at the time of such purchase to cause to be transported to destinations outside the county.

 

Value means an accurate assessment or evaluation of a non-titled personal property’s worth when first subject to use in the county.

 

(b)  All words or terms used in this article that are not defined herein or in the uniform penalties, interest, and procedures ordinance, Article III, Chapter 34 of the Cook County Code of Ordinances, as from time to time amended, or any successor ordinance, shall have, to the extent applicable and where the context admits, the meaning set forth in the Illinois Use Tax Act or as otherwise prescribed by rule by the Director.

 

Sec. 74-652. – Tax imposed.

 

(a)    Except as otherwise provided in Sections 74-655 and 74-666 of this article, a tax is imposed upon the privilege of using in the county non-titled personal property which was purchased outside of the county.  The tax shall be at the rate of 1.25% of the non-titled personal property’s value when first subject to use in the County. 

 

(b)   The tax imposed by this article and the obligation to pay the tax is upon the purchaser or user of non-titled personal property. 

 

(c)    The tax imposed by this article shall be payable whenever said non-titled personal property is first subject to use in the county.  Evidence that the purchaser resides or that property was delivered to a location in the county shall be prima facie evidence that the property is purchased for use in the county and first used in the county on the date of delivery.

 

(d)   Nothing in this article shall be construed to impose a tax upon any business or activity which, under the constitution and laws of the United States or the State of Illinois, may not be made the subject of taxation by the County.

 

(e)    The tax is imposed, in addition to all other taxes imposed by the County of Cook, the State of Illinois, or any other municipal corporation or political subdivision of the State of Illinois.

 

Sec. 74-653.  Registration.

 

Every person in Cook County who, in the course of business, acquires non-titled personal property that is subject to this tax shall register with the department in the time, form, and manner required by the department under such policies, procedures, rules, and forms as are promulgated by the department.

 

Sec. 74-654. – Annual Tax Credit.

 

Any person with a tax liability under this ordinance may apply to the department for an annual tax credit up to $31.25 in the form and manner as prescribed by the department.  Upon its granting, the credit shall be applied against the person’s aggregate tax liability arising under this article for each taxable year;

 

provided, however, that no portion of the tax credit for a particular taxable year shall apply against a tax liability arising in another taxable year; and further provided that if a person is liable for the tax in an amount less than $31.25, the tax credit shall in no way result in the disbursement of county proceeds. 

 

Sec. 74-655. – Exempt non-titled personal property.

 

Notwithstanding any other provision of this article, purchases or uses of the following non-titled personal property are not subject to the tax imposed by this article:

 

(a)    Items of non-titled personal property which are exempt from tax under the provisions of the Illinois Use Tax Act, to the extent that the exemptions contained therein are not inconsistent with the provisions of this article.

 

(b)   Food for human consumption which is to be consumed off the premises where it is sold, other than alcoholic beverages, soft drinks, and food which has been prepared for immediate consumption within the county.

 

(c)    Prescription and non-prescription medicines, drugs, medical appliances used by persons who are public-aid recipients in nursing homes; and insulin, urine testing materials, syringes, and needles used by natural persons who are diabetics for personal use.

 

Sec. 74-656. – Exempt uses.

 

Notwithstanding any other provision of this article, the following purchases and uses of non-titled personal property are not subject to the tax imposed by this article:

 

(a)    The use in the county of non-titled personal property acquired outside the county by a nonresident natural person if the property is brought into the county by the person for his or her own use while temporarily in the county or while passing through the county.

 

(b)   The use of non-titled personal property by (1) an interstate carrier for hire as rolling sock moving in interstate commerce; or (2) the lessor under a lease of at least one year, executed or in effect at the time of purchase of the property, to an interstate carrier for hire as rolling stock moving in interstate commerce, but only so long as the property is used by the interstate carrier for hire.

 

(c)    The use by an owner, lessor, or shipper of non-titled personal property which is utilized by interstate carriers for hire as rolling stock moving in interstate commerce as so used by interstate carriers for hire.

 

(d)   The temporary storage in the county of non-titled personal property which is acquired outside the county and which, after being brought into the county and stored temporarily in the county is (1) used solely outside the county; (2) physically attached to, or incorporated into, other tangible personal property which is used solely outside the county; or (3) is altered by converting, fabricating, manufacturing, printing, processing, or shaping and, as altered, is used solely outside the county.

 

(e)    The temporary storage in the county of building materials and fixtures by a combination retailer and construction contractor registered with the state, but only if the contractor thereafter incorporates the building materials and fixtures into real estate located outside the county.

 

(f)    The purchase or use of non-titled personal property by a common carrier by rail which receives possession of the property in the county and which transports the property, or shares with another common carrier in the transportation of the property, out of the county on a standard uniform bull of lading showing the seller of the property as the shipper or consignor of the property to a destination outside the county, for use outside the county.

 

(g)    The personal use in the county of non-titled personal property acquired outside the county by a natural person who, at the time of acquisition, was not a resident of the county, and who used the property outside the county for at least three months prior to bringing the property into the county.

 

(h)   The use in the county of non-titled personal property by a person who uses said property in the course of business and who relocates to the county, or opens an office, plant, or other facility in the county, if the property has been used at least three months outside the county by the person before being moved into the county.

 

Sec. 74-657. – Filing returns, tax payments, remittances.

 

Any person who is liable for the tax in an amount greater than the annual tax credit provided for in section 74-654 of this ordinance, shall file with and remit to the department, on or before the 20th day of the month or in a timeframe otherwise prescribed by ruling by the director, a tax remittance return and the corresponding tax due from any transaction that occurred in the immediately preceding month, in such form and manner as are, and containing such information as is, promulgated by the director, who may distinguish between natural and non-natural persons in such promulgation.

 

Sec. 74-658. – Required books and records.

 

Every person who is subject to this tax in the course of business shall keep and maintain accurate and complete documents, books, and records of each transaction or activity subject to or exempted by this ordinance, from start to complete, including all original source documents.  All such books and records shall be kept as provided in Chapter 34, Article III, of the Uniform Penalties, Interest, and Procedures Ordinance, and shall, at all reasonable times during normal business hours, be open to inspection, audit, or copying by the department and its agents. 

 

Sec. 74-659. – Violations, penalties.

 

(a)    It shall be a violation of this article to fail to file a return and/or remit tax as prescribed by this article. 

 

(b)   It shall be a violation of this article for a person to fail to act in accordance with Sec. 74-653 of this article.

 

(c)    In case of failure to register, file a tax return and/or remit this tax when due, the department may assess penalties and interest as provided for in this article and/or Chapter 34, Article III, Cook County Uniform Penalties, Interest and Procedures

 

Sec. 74-660. – Rulemaking Authority; Policies, procedures, rules, forms.

 

(a)  The director shall prescribe reasonable rules, policies, definitions, and regulations necessary to carry out the duties imposed upon it by this article and promulgate and publish policies, procedures, rules, forms, and guidance pertaining to all aspects of the administration and enforcement of this article, including rules regarding the valuation of non-titled personal property.

 

Sec. 74-661. – Application of uniform penalties, interest, and procedures ordinance.

 

Whenever not inconsistent with the provisions of this article, of whenever this article is silent, the provisions of the uniform penalties, interest, and procedures ordinance, Article III, Chapter 34 of the Cook County Code of Ordinances, shall apply to and supplement this article.

 

Sec. 74-662. - Enforcement and Inspection. 

 

The department or its designee as may be promulgated by rule by the department shall be authorized to enforce this article and be responsible for issuing citations hereunder. 

 

Effective Date:  This ordinance shall be effective on April 1, 2013.

Text of Amendment:

SUBMITTING A PROPOSED AMENDMENT TO SUBSTITUTE COMMUNICATION NO. 320468

 

SPONSORED BY:

 

TONI PRECKWINKLE, President, Cook County Board of Commissioners and JERRY BUTLER, JOHN P. DALEY, JESUS G. GARCIA, EDWIN REYES, DEBORAH SIMS, ROBERT STEELE, LAWRENCE SUFFREDIN AND JEFFREY R. TOBOLSKI, Cook County Commissioner

 

NON-TITLED PERSONAL PROPERTY USE TAX

 

Sec. 74-654. – Annual Tax Credit.

Any person with a tax liability under this ordinance may apply to the department for an annual tax credit up to $31.25 shall receive an annual tax credit for the first non-titled personal property purchased outside of Cook County and used in Cook County with a value of $3,500.00.  The Department is hereby authorized to institute implement the annual tax credit in the form and manner as prescribed by the Department.  Upon its granting, the The credit shall be applied against the person’s aggregate tax liability arising under this article for each taxable year; provided, however, that no portion of the tax credit for a particular taxable year shall apply against a tax liability arising in another taxable year; and further provided that if a person is liable for the tax in an amount less than $31.25$43.75, the tax credit shall in no way result in the disbursement of county proceeds. 


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