Bill Text: IL HB3359 | 2019-2020 | 101st General Assembly | Introduced

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Bill Title: Creates the Video Service Tax Modernization Act. Imposes a tax upon the act or privilege of providing direct-to-home satellite service, direct broadcast satellite service, or digital audio-visual works to a subscriber in the State. Provides that the tax is imposed at the rate of 5% of the provider's gross revenues derived from or attributable to that subscriber. Creates the Entertainment Tax Fairness Act. Imposes a tax upon the subscribers of entertainment in the State at the rate of 1% of the charges paid for the privilege to witness, view, or otherwise enjoy the entertainment. Defines "entertainment" as any paid video programming, direct-to-home satellite service, direct broadcast satellite service, digital audio-visual works service, or video service to a subscriber in the State.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2019-03-29 - Rule 19(a) / Re-referred to Rules Committee [HB3359 Detail]

Download: Illinois-2019-HB3359-Introduced.html

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101ST GENERAL ASSEMBLY State of Illinois 2019 and 2020 HB3359 Introduced , by Rep. Arthur Turner SYNOPSIS AS INTRODUCED:
New Act
Creates the Video Service Tax Modernization Act. Imposes a tax upon the act or privilege of providing direct-to-home satellite service, direct broadcast satellite service, or digital audio-visual works to a subscriber in the State. Provides that the tax is imposed at the rate of 5% of the provider's gross revenues derived from or attributable to that subscriber. Creates the Entertainment Tax Fairness Act. Imposes a tax upon the subscribers of entertainment in the State at the rate of 1% of the charges paid for the privilege to witness, view, or otherwise enjoy the entertainment. Defines "entertainment" as any paid video programming, direct-to-home satellite service, direct broadcast satellite service, digital audio-visual works service, or video service to a subscriber in the State.
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FISCAL NOTE ACT MAY APPLY
A BILL FOR
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AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
ARTICLE 10. VIDEO SERVICE TAX MODERNIZATION
Section 10-1. Short title. This Act may be cited as the
Video Service Tax Modernization Act.
Section 10-5. Application. This Act applies to the
provision of direct-to-home satellite service, direct
broadcast satellite service, and digital audio-visual works on
or after the effective date of this Act.
This Act does not apply to: (1) satellite radio service or
subscription radio service whereby a digital radio signal is
broadcast without any corresponding or related video
programming or services; or (2) a satellite television
transmission of simulcast horse races broadcast from or
received at locations operated by an organization licensee, an
inter-track wagering licensee, or an inter-track wagering
location licensee licensed under the Illinois Horse Racing Act
of 1975.
Section 10-10. Definitions. As used in this Act:
"Department" means the Department of Revenue.

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"Digital audio-visual works" means a series of related
images that, when shown in succession, impart an impression of
motion, together with accompanying sounds, if any, sold to an
end user with rights of less than permanent use. "Digital
audio-visual works" does not include cable service provided by
a cable operator, as those terms are defined in 47 U.S.C. 522,
and does not include video service provided by a holder, as
those terms are defined in Article 21 of the Public Utilities
Act.
"Direct broadcast satellite service" means video services
transmitted or broadcast by satellite directly to the
subscriber's premises with the use of or accompanied by ground
receiving or distribution equipment, including, but not
limited to, infrastructure to provide Internet access used in
the transmission or broadcast of such video services, at the
subscriber's premises, but not in the uplink process to the
satellite, and includes, but is not limited to, the
retransmission of local broadcast television, the provision of
premium channels, other recurring monthly services, service
and pay-per-view, video-on-demand, and other event-based
services.
"Direct-to-home satellite service" has the meaning given
to that term in Public Law No. 104-104, Title VI, Section
602(a), February 8, 1996, 110 Stat. 144 (reprinted at 47 U.S.C.
152).
"End user" means any person other than a person who

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receives by contract a product transferred electronically for
further commercial broadcast, rebroadcast, transmission,
retransmission, licensing, relicensing, distribution,
redistribution, or exhibition of the product, in whole or in
part, to another person or persons.
"Gross revenue" means all consideration of any kind or
nature received by a provider, or an affiliate of the provider,
in connection with the provision of direct-to-home satellite
service, direct broadcast satellite service, or digital
audio-visual works to subscribers. "Gross revenue" does not
include:
(1) charges for the rental of equipment related to the
provision of direct-to-home satellite service, direct
broadcast satellite service, or digital audiovisual works;
(2) activation, installation, repair, or maintenance
charges or similar service charges related to the provision
of direct-to-home satellite service, direct broadcast
satellite service, or digital audio-visual works;
(3) service order charges, service termination
charges, or any other administrative charges related to the
provision of direct-to-home satellite service, direct
broadcast satellite service, or digital audiovisual works;
(4) revenue not actually received, regardless of
whether it is billed, including, but not limited to, bad
debts;
(5) revenue received by an affiliate or other person in

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exchange for supplying goods and services used by a
provider;
(6) the amount of any refunds, rebates, or discounts
made to subscribers, advertisers, or other persons;
(7) revenue from any service that is subject to tax
under the Service Occupation Tax Act, Retailers'
Occupation Tax Act, Service Use Tax Act, or Use Tax Act;
(8) the tax imposed by this Act or any other tax of
general applicability imposed on a provider or a purchaser
of direct-to-home satellite service, direct broadcast
satellite service, or digital audio-visual works by a
federal, State, or local governmental entity and required
to be collected by a person and remitted to the taxing
entity;
(9) charges, other than those charges specifically
described in this Act, that are aggregated or bundled with
such specifically-described charges on a subscriber's
bill, if the provider can reasonably identify the charges
in its books and records kept in the regular course of
business;
(10) revenue from advertising services; or
(11) charges that may not be taxed pursuant to the
federal Internet Tax Freedom Act.
"Permanent" means perpetual or for an indefinite or
unspecified length of time.
"Person" means a natural individual, firm, trust, estate,

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partnership, association, joint stock company, joint venture,
corporation, or limited liability company, or a receiver,
trustee, guardian, or other representative appointed by order
of any court, and includes the federal and State governments,
including State universities created by statute, and
municipalities, counties, and other political subdivisions of
this State.
"Premises" means a residence or place of business of a
subscriber in this State.
"Provider" means a person who transmits, broadcasts,
sells, or distributes direct-to-home satellite service, direct
broadcast satellite service, or digital audio-visual works to
subscribers in the State.
"Subscriber" means a member of the general public who
receives direct-to-home satellite service, direct broadcast
satellite service, or digital audio-visual works from a
provider and does not further distribute the service in the
ordinary course of business.
Section 10-15. Imposition of tax.
(a) A tax is imposed upon the act or privilege of providing
direct-to-home satellite service, direct broadcast satellite
service, or digital audio-visual works to a subscriber in this
State by any provider at the rate of 5% of the provider's gross
revenues derived from or attributable to that subscriber.
(b) For purposes of the tax imposed by subsection (a), a

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subscriber is in this State if the subscriber's street address
representative of where the subscriber's use or access of the
direct-to-home satellite service, direct broadcast satellite
service, or digital audio visual work primarily occurs, which
must be the street address of the subscriber based on such
other information kept by the provider in the regular course of
its business.
(c) The tax imposed by subsection (a) may be passed through
to, and collected from, the provider's subscribers in Illinois.
To the extent allowed under federal or State law, a provider
may identify as a separate line item on each regular bill
issued to a subscriber the amount of the total bill assessed as
a tax under this Act.
(d) To prevent actual multi-state taxation upon the act or
privilege that is subject to taxation under this Act, any
taxpayer, upon proof that that taxpayer has paid a tax in
another state on such event, shall be allowed a credit against
the tax imposed in this Act to the extent of the amount of such
tax properly due and paid in such other state. However, such
tax is not imposed on the act or privilege to the extent such
act or privilege may not, under the Constitution and statutes
of the United States, be made the subject of taxation by the
State.
Section 10-20. Remittances.
(a) On or before the twentieth day of each calendar month,

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every provider of direct-to-home satellite service, direct
broadcast satellite service, or digital audio-visual works
that provides such service or services to a subscriber in this
State during the preceding calendar month shall file a return
with the Department, in a form prescribed by the Department,
stating:
(1) the name of the provider;
(2) the address of the provider's principal place of
business;
(3) the total amount of gross revenues received by the
provider during the preceding calendar month, quarter, or
year, as the case may be, from the provision of
direct-to-home satellite service, direct broadcast
satellite service, or digital audio-visual works during
that preceding calendar month, quarter, or year and upon
the basis of which the tax is imposed;
(4) the amount of tax due;
(5) the signature of the taxpayer; and
(6) such other reasonable information as the
Department may require.
(b) If a taxpayer fails to sign a return within 30 days
after the proper notice and demand for signature by the
Department is received by the taxpayer, then the return shall
be considered valid and any amount shown to be due on the
return shall be deemed assessed.
(c) If the provider is otherwise required to file a monthly

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return, and if the provider's average monthly tax liability to
the Department under this Act does not exceed $200, the
Department may authorize the provider's returns to be filed on
a quarter annual basis, with the return for January, February,
and March of a given year being due by April 20 of that year;
with the return for April, May, and June of a given year being
due by July 20 of that year; with the return for July, August,
and September of a given year being due by October 20 of that
year, and with the return for October, November, and December
of a given year being due by January 20 of the following year.
(d) If the provider is otherwise required to file a monthly
or quarterly return, and if the provider's average monthly tax
liability with the Department under this Act does not exceed
$50, the Department may authorize the provider's returns to be
filed on an annual basis, with the return for a given year
being due by January 20 of the following year.
(e) Those quarterly and annual returns shall be subject to
the same requirements as to form and substance as monthly
returns.
(f) A taxpayer who has an annual tax liability in the
amount set forth in subsection (b) of Section 2505-210 of the
Department of Revenue Law shall make all payments required by
rules of the Department by electronic funds transfer.
Any taxpayer not required to make payments by electronic
funds transfer may make payments by electronic funds transfer
with the permission of the Department.

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All taxpayers required to make payment by electronic funds
transfer and any taxpayers authorized to voluntarily make
payments by electronic funds transfer shall make those payments
in the manner authorized by the Department.
Section 10-25. Records.
(a) A provider on whom the tax is imposed by this Act shall
maintain the necessary records, and any other information
required by the Department, to determine the amount of the tax
that the provider is required to remit and any credit that the
provider is entitled to claim under this Act.
(b) The records shall be open at all times to inspection by
the Department.
Section 10-30. Rules. The Department is authorized to adopt
and enforce any reasonable rules and to prescribe such forms
relating to the administration and enforcement of this Act as
it may deem appropriate.
Section 10-35. Incorporation of Retailers' Occupation Tax
Act and Uniform Penalty and Interest Act. All of the provisions
of Sections 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i, and 5j of the
Retailers' Occupation Tax Act, which are not inconsistent with
this Act, and the Uniform Penalty and Interest Act, shall
apply, as far as practicable, to the subject matter of this Act
to the same extent as if such provisions were included herein.

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References in those incorporated Sections to taxpayers and to
persons engaged in the business of selling tangible personal
property at retail mean providers of direct-to-home satellite
service, direct broadcast satellite service, or digital
audio-visual works when used in this Act.
ARTICLE 15. ENTERTAINMENT TAX FAIRNESS ACT
Section 15-1. Short title. This Act may be cited as the
Entertainment Tax Fairness Act.
Section 15-5. Application. This Act applies to all
subscribers of entertainment in this State for the privilege to
witness, view, or otherwise enjoy the entertainment.
This Act does not apply to: (1) satellite radio service or
subscription radio service whereby a digital radio signal is
broadcast without any corresponding or related video
programming or services; or (2) a satellite television
transmission of simulcast horse races broadcast from or
received at locations operated by an organization licensee, an
inter-track wagering licensee, or an inter-track wagering
location licensee licensed under the Illinois Horse Racing Act
of 1975.
Section 15-10. Definitions. As used in this Act:
"Cable service" has the meaning given to that term in item

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(6) of 47 U.S.C. 522.
"Department" means the Department of Revenue.
"Digital audio-visual works service" means the
transmission of a series of related images that, when shown in
succession, impart an impression of motion, together with
accompanying sounds, if any, sold to an end user with rights of
less than permanent use. "Digital audio-visual works service"
does not include cable service or video service.
"Direct broadcast satellite service" means video services
transmitted or broadcast by satellite directly to the
subscriber's premises with the use of or accompanied by ground
receiving or distribution equipment, including, but not
limited to, infrastructure to provide Internet access used in
the transmission or broadcast of such video services, at the
subscriber's premises, but not in the uplink process to the
satellite, and includes, but is not limited to, the
retransmission of local broadcast television, the provision of
premium channels, other recurring monthly services, service
and pay-per-view, video-on-demand, and other event-based
services.
"Direct-to-home satellite service" has the meaning given
to that term in Public Law No. 104-104, Title VI, Section
602(a), February 8, 1996, 110 Stat. 144 (reprinted at 47 U.S.C.
152).
"End user" means any person other than a person who
receives by contract a product transferred electronically for

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further commercial broadcast, rebroadcast, transmission,
retransmission, licensing, relicensing, distribution,
redistribution, or exhibition of the product, in whole or in
part, to another person or persons.
"Entertainment" means any paid video programming whether
transmitted by cable service, direct-to-home satellite
service, direct broadcast satellite service, digital
audio-visual works service, or video service to a subscriber in
this State.
"Permanent" means perpetual or for an indefinite or
unspecified length of time.
"Provider" means a person who transmits, broadcasts,
sells, or distributes cable service, direct-to-home satellite
service, direct broadcast satellite service, digital
audio-visual works service, or video service to subscribers in
the State.
"Subscriber" means a member of the general public who
receives cable service, direct-to-home satellite service,
direct broadcast satellite service, or digital audio-visual
works service, or video service from a provider and does not
further distribute the service in the ordinary course of
business.
"Video service" has the meaning given to that term in the
Cable and Video Competition Law of 2007 of the Public Utilities
Act.

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Section 15-15. Imposition of tax.
(a) A tax is imposed upon the subscribers of entertainment
in this State at the rate of 1% of the charges paid for the
privilege to witness, view, or otherwise enjoy the
entertainment.
(b) For purposes of the tax imposed by subsection (a), a
subscriber is in this State if the subscriber's street address
is representative of where the subscriber's use or access of
the entertainment primarily occurs, which must be the street
address of the subscriber based on such other information kept
by the provider in the regular course of its business.
(c) The provider of the entertainment shall collect and
secure from each subscriber the tax imposed by this Act and
remit the tax to the Department as set forth in Section 15-20
of this Act.
Section 15-20. Remittances.
(a) On or before the twentieth day of each calendar month,
every provider shall file a return with the Department, in a
form prescribed by the Department, stating:
(1) the name of the provider;
(2) the address of the provider's principal place of
business;
(3) the total amount of tax revenues collected by the
provider under this Act during the preceding calendar
month, quarter, or year, as the case may be, during that

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preceding calendar month, quarter, or year and upon the
basis of which the tax is imposed;
(4) the amount of tax due;
(5) the signature of the provider; and
(6) such other reasonable information as the
Department may require.
(b) If a provider fails to sign a return within 30 days
after the proper notice and demand for signature by the
Department is received by the provider, then the return shall
be considered valid and any amount shown to be due on the
return shall be deemed assessed.
(c) If the provider is otherwise required to file a monthly
return, and if the amount collected by the provider under this
Act does not exceed $200, the Department may authorize the
provider's returns to be filed on a quarter annual basis, with
the return for January, February, and March of a given year
being due by April 20 of that year; with the return for April,
May, and June of a given year being due by July 20 of that year;
with the return for July, August, and September of a given year
being due by October 20 of that year, and with the return for
October, November, and December of a given year being due by
January 20 of the following year.
(d) If the provider is otherwise required to file a monthly
or quarterly return, and if the amount collected by the
provider under this Act does not exceed $50, the Department may
authorize the provider's returns to be filed on an annual

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basis, with the return for a given year being due by January 20
of the following year.
(e) Those quarterly and annual returns shall be subject to
the same requirements as to form and substance as monthly
returns.
(f) A provider responsible for collecting and remitting the
amount set forth in subsection (b) of Section 2505-210 of the
Department of Revenue Law shall make all payments required by
rules of the Department by electronic funds transfer.
Any provider not required to make payments by electronic
funds transfer may make payments by electronic funds transfer
with the permission of the Department.
All providers required to make payment by electronic funds
transfer and any taxpayers authorized to voluntarily make
payments by electronic funds transfer shall make those payments
in the manner authorized by the Department.
Section 15-25. Records.
(a) A provider subject to this Act shall maintain the
necessary records, and any other information required by the
Department, to determine the amount of the tax that the
provider is required to collect and remit and any credit that
the provider is entitled to claim under this Act.
(b) The records shall be open at all times to inspection by
the Department.

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Section 15-30. Rules. The Department is authorized to adopt
and enforce any reasonable rules and to prescribe such forms
relating to the administration and enforcement of this Act as
it may deem appropriate.
Section 15-35. Incorporation of Retailers' Occupation Tax
Act and Uniform Penalty and Interest Act. All of the provisions
of Sections 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i, and 5j of the
Retailers' Occupation Tax Act, which are not inconsistent with
this Act, and the Uniform Penalty and Interest Act, shall
apply, as far as practicable, to the subject matter of this Act
to the same extent as if such provisions were included herein.
References in those incorporated Sections to taxpayers and to
persons engaged in the business of selling tangible personal
property at retail mean providers of direct-to-home satellite
service, direct broadcast satellite service, or digital
audio-visual works service when used in this Act.