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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