HomeMy WebLinkAboutORDINANCE - 2467 - 1/23/1996 - TAX, MUNICIPAL TELECOMMUNICATIONORDINANCE NO. 2467
AN ORDINANCE AMENDING TITLE 3 CHAPTER 2 OF THE
VILLAGE CODE BY ADDING TMM`O A NEW SECTION
PROVIDING FOR A MUNICIPAL TELECC[MMUNICATIONS TAX
WHEREAS, the Village of Elk Grove Village is a Hone Rule
Municipality as defined and set forth in the Constitution of the State
of Illinois and by the provisions thereof is Empowered to enact such
legislation pertaining to its local governmental affairs as is deemed
necessary in the best interest of the Village including the power to
tax; and
WHEREAS, this Ordinance is being adopted pursuant to and by the
Village as a Hone Rule Municipality.
NOW, THEREFORE, BE IT ORDAINED by the President and Board of
Trustees of the Village of Elk Grove Village, Counties of Cook and
DuPage, Illinois as follows:
Section 1: That TITLE 3, CHAPTER 2, of the Village Code of the
Village of Elk Grove Village is hereby amended by adding thereto
Section 3-2-8, Telecommunications Tax, which is set forth on Exhibit A,
attached hereto and by this reference, incorporated herein.
Section 2: That this Ordinance shall be in full force and effect
from and after its passage, approval and publication according to law.
ATTEST:
VOTE: AYES: 4 NAYS: 2 ABSENT: p
PASSED this 23rd day of January , 1996.
APPROVED this 23rd day of January 1996.
Patricia S. Smith
VILLAGE CLERK
Dennis J. Gallitano
VILLAGE PRESIDENT
PUBLISHED this 26th day of January , 1996 in pamphlet form.
EXHIBIT A
3-2-8: - MUNICIPAL TELECOMMUNICATIONS TAX
A. Definitions.) For the purpose of this Chapter, whenever any
of the following words, terms or definitions are used herein,
they shall have the meanings ascribed to them in this Section:
(1) "Village" means the Village of Elk Grove Village,
Illinois.
(2) "Department" means the Finance Department of the
Village of Elk Grove Village.
(3) "Amount Paid" means the amount charged to the
taxpayer's service address in such municipality
regardless of where such amount is billed or paid.
(4) "Gross Charge" means the amount paid for the act or
privilege of originating or receiving
telecommunications in such municipality and for all
services rendered in connection therewith, valued in
money whether paid in money or otherwise, including
cash, credits, services and property of every kind or
nature, and shall be determined without any deduction
on account of the cost of such telecommunications, the
cost of the materials used, labor or service costs or
any other expense whatsoever. In case credit is
extended, the amount thereof shall be included only as
and when paid. However, "gross charge" shall not
include:
(a) Any amounts added to a purchaser's bill
because of a charge made pursuant to: (i) the tax
imposed by this Section, (ii) additional charges
added to purchaser's bill pursuant to Section 9-
222 of the Public Utilities Act, (iii) the tax
imposed by the Telecommunications Excise Tax Act,
or (iv) the tax imposed by Section 4251 of the
Internal Revenue Code;
(b) charges for a sent collect telecommunication
received outside of such municipality;
(c) charges for leased time on equipment or
charges for the storage of data or information or
subsequent retrieval or the processing of data or
information intended to change its form or
content. Such equipment includes, but is not
limited to, the use of calculators, computers,
1
data processing equipment, tabulating equipment or
accounting equipment and also includes the usage
of computers under a time-sharing agreement;
(d) charges for customer equipment, including such
equipment that is leased or rented by the customer
from any source, wherein such charges are
disaggregated and separately identified from other
charges;
(e) charges to business enterprises certified
under Section 9-222.1 of the Public Utilities Act
to the extent of such exemption and during the
period of time specified by the Department of
Commerce and Community Affairs;
(f) charges for telecommunications and all
services on equipment provided in connection
therewith between a parent corporation and its
wholly owned subsidiaries or between wholly owned
subsidiaries when the tax imposed under this
Section has already been paid to a retailer and
only to the extent that the charges between the
parent corporation and wholly owned subsidiaries
represent expense allocation between the
corporations and not the generation of profit for
the corporation rendering such service;
(g) bad debts. "bad debt" shall mean any portion
of a debt that is related to sale at retail for
which gross charges are not otherwise deductible
or excludable that has become worthless or
uncollectible, as determined under applicable
federal income tax standards; provided that if the
portion of the debt deemed to be bad is
subsequently paid, the retailer shall report and
pay the tax on that portion during the reporting
period in which the payment is made; or
(h) charges paid by inserting coins in coin-
operated telecommunication devices.
(5) "Interstate telecommunications" means all
telecommunications that either originate or terminate
outside this State.
(6) "Intrastate telecommunications" means all
telecommunications that originate and terminate within
this State.
(7) "Person" means any natural individual, firm trust,
estate, partnership, association, joint stock company,
2
joint venture, or other representative appointed by
order of any court, the Federal and State governments,
including State universities created by statute, or any
city, town, county, or other political subdivision of
this State.
(8) "Purchase at retail" means the acquisition,
consumption or use of the telecommunications through a
sale at retail.
(9) "Retailer" means and includes every person engaged
in the business of making sales at retail as defined in
this Section. A municipality may in its discretion,
upon application, authorize the collection of the tax
hereby imposed by any retailer not maintaining a place
of business within this State, who to the satisfaction
of the municipality, furnishes adequate security to
insure collection and payment of the tax. Such
retailer shall be issued, without charge, a permit to
collect such tax. When so authorized, it shall be the
duty of such retailer to collect the tax upon all of
the gross charges for telecommunications in such
municipality in the same manner and subject to the same
requirements as a retailer maintaining a place of
business within such municipality.
(10) "Retailer maintaining a place of business in this
State" or any like term, means and includes any
retailer having or maintaining within this State,
directly or by a subsidiary, an office, distribution
facilities, transmission facilities, sales office,
warehouse or other place of business, or any agent or
other representative operating within this State under
the authority of the retailer or its subsidiary,
irrespective of whether such place of business or agent
or other representative is located here permanently or
temporarily, or whether such retailer or subsidiary is
licensed to do business in this State.
(11) "Sale at retail" means the transmitting, supplying
or furnishing of telecommunications and all services
rendered in connection therewith for a consideration to
persons other than the Federal and State governments,
and State universities created by statute and other
than between a parent corporation and its wholly owned
subsidiaries or between wholly owned subsidiaries, when
the tax has already been paid to a retailer and the
gross charge made by one such corporation to another
such corporation is not greater than the gross charge
paid to the retailer for their use or consumption and
not for resale.
3
(12) "Service address" means the location of
telecommunications equipment from which
telecommunications services are originated or at which
telecommunications services are received by a taxpayer.
If this is not a defined location, as in the case of
mobile phones, paging systems, maritime systems, air -
to -ground systems and the like, "service address" shall
mean the location of a taxpayer's primary use of the
telecommunications equipment as defined by telephone
number, authorization code, or location in Illinois
where bills are sent.
(13) "Taxpayer" means a person who individually or
through his agents, employees, or permittees engages in
the act or privilege of originating in such
municipality or receiving in such municipality
telecommunications and who incurs a tax liability under
any ordinance authorized by this Section.
(14) "Telecommunication," in addition to the usual and
popular meaning, includes but is not limited to,
messages or information transmitted through use of
local, toll and wide area telephone service, channel
services, telegraph services, teletypewriter service,
computer exchange services; cellular mobile
telecommunications service, specialized mobile radio
services, paging service, or any other form of mobile
and portable one-way or two-way communications, or any
other transmission of messages or information by
electronic or similar means, between or among points by
wire, cable, fiberoptics, laser, microwave, radio,
satellite or similar facilities. The definition of
"telecommunications" shall not include value added
services in which computer processing applications are
used to act on the form, content, code and protocol of
the information for purposes other than transmission.
"Telecommunications" shall not include purchase of
telecommunications by a telecommunications service
provider for use as a component part of the service
provided by him to the ultimate retail consumer who
originates or terminate the taxable end -to -right of
access charges, charges for use of inner -company
facilities, and all telecommunications resold in the
subsequent provision used as a component of, or
integrated into, end-to-end telecommunication service
shall be non-taxable as sales for resale.
B. Tax Imposed.)A tax is imposed on any or all of the following
acts or privileges:
(1) The act or privilege of originating in such municipality
or receiving in such municipality intrastate
telecommunications by a person at a rate of 35k of the gross
charge for such telecommunications purchased at retail from
a retailer by such person. However, such tax is not imposed
on such 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 municipalities in
this State.
(2) The act or privilege of originating in such municipality
or receiving in such municipality interstate
telecommunications by a person at a tax rate of 3% of the
gross charge for such telecommunications purchased at retail
from a retailer by such person. To prevent actual multi-
state taxation of the act or privilege that is subject to
taxation under this paragraph, any taxpayer, upon proof that
the taxpayer has paid a tax in another state on such event,
shall be allowed a credit against any tax enacted pursuant
to an ordinance authorized by this paragraph to the extent
of the amount of such tax properly due and paid in such
other state which was not previously allowed as a credit
against any other state or local tax in this 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 municipalities in this State.
(3) If a person, who originates or receives
telecommunications in such a municipality, claims to be a
reseller of such telecommunications, such person shall apply
to the Village for a resale number. Such applicant shall
state facts which will show the Village why such applicant
is not liable for tax under this ordinance on any of such
purchases and shall furnish such additional information as
the Village may reasonably require.
(4) The act or privilege of originating or receiving
telecommunications in the Village shall not be made tax-free
on the ground of being a sale for resale unless the person
has an active resale number issued by the Department and
furnishes that number to the retailer in connection with
certifying to the retailer that a sale is nontaxable as a
sale for resale.
Upon approval of the application, the Village shall assign a
resale number to the applicant and shall certify such number
to the applicant. The Village may cancel any number which
5
is obtained through misrepresentation, or which is used to
send or receive such telecommunication tax-free when such
actions in fact are not for resale, or which no longer
applies because of the person's having discontinued the
making of resales.
The tax imposed by this ordinance shall be in addition to the
payment of money, or value of products or services furnished to
the Village of Elk Grove by the taxpayer as compensation for the
use of its streets, alleys, or other public places, or
installation and maintenance therein, thereon, or thereunder of
poles, wires, pipes, or other equipment used in the operation of
the taxpayer's business.
C. Collection of Tax.) The tax authorized by this ordinance
shall be collected from the taxpayer by a retailer maintaining a
place of business in this State and making or effectuating the
sale at retail and shall be remitted by such retailer to the
Village. Any tax required to be collected pursuant to this
ordinance and any such tax collected by such retailer shall
constitute a debt owed by the retailer to the Village. Retailers
shall collect the tax from the taxpayer by adding the tax to the
gross charge for the act or privilege of originating or receiving
telecommunications when sold for use in the manner prescribed by
the Village. The tax authorized by this ordinance shall
constitute a debt of the purchaser to the retailer who provides
such taxable services until paid and, if unpaid, is recoverable
at law in the same manner as the original charge for such taxable
services. If the retailer fails to collect the tax from the
6
taxpayer, then the taxpayer shall be required to pay the tax
directly to the Village in the manner provided by the Village.
The Village shall, upon application, authorize the collection of
this tax by any retailer not maintaining a place of business in
this state who, to the satisfaction of the Village, furnishes
adequate security to insure collection and payment of the tax.
The tax authorized by this ordinance shall, when collected, be
stated as a distinct item separate and apart from the gross
charge for telecommunications.
D. Earmarked Revenues.) Telecommunication tax revenues resulting
from the imposition of this ordinance shall be earmarked for the
purposes of revitalizing the Village's commercial and industrial
areas. Under no circumstance, shall municipal telecommunication
tax revenue be utilized for projects other than those established
and recommended by the Industrial/Commercial Revitalization
Commission.
Telecommunication tax revenues shall be subject to an annual
review process by the Industrial/Commercial Revitalization
Commission. Such a review shall include but is not limited to
the adequacy, sufficiency, and/or surplus of funding provided by
the Telecommunication Tax.
7
E. Tax Remittance.) On or before the last day of each calendar
month, every retailer maintaining a place of business in this
state and every retailer authorized by the Village to collect the
tax imposed by this ordinance shall file with the Department a
remittance return and remit all applicable tax for the preceding
calendar month. The return shall be filed on a form prescribed
by the Village, containing such information as the Village may
reasonably require.
F. Tax Enforcement.) Any taxpayer who fails to make a return, or
who makes a fraudulent return, or who wilfully violates any other
provision of this ordinance is guilty of misdemeanor and, upon
conviction thereof, shall be fined not less than one hundred
dollars($100) nor more than five hundred dollars ($500), and in
addition shall be liable in civil action for the amount of tax
due, plus interest and costs.
E