Page 8 Fiscal Year 2002 Payments to Local Governments
Replacement taxes include Personal Property Replacement Tax, Electricity Distribution
Tax, Invested Capital Taxes, and the state Telecommunications Infrastructure
Maintenance Fee (TIMF).
Personal Property Replacement Income Tax is imposed on
the income of corporations at the rate of 2.5 percent; and
the income of partnerships, trusts, and S corporations at the rate of 1.5 percent.
The Electricity Distribution Tax is imposed on electric utilities or alternative retail
electric suppliers who
distribute electricity for use or consumption (not for resale); and
are not electric cooperatives, school districts, or units of local government.
The tax is based on the kilowatt-hours (kwhs) distributed at the following monthly rates:
$0.00031 for the first 500 million kwhs
$0.0005 for the next 1 billion kwhs
$0.0007 for the next 2.5 billion kwhs
$0.0014 for the next 4 billion kwhs
$0.0018 for the next 7 billion kwhs
$0.00142 for the next 3 billion kwhs
$0.00131 for all kwhs distributed in excess of 18 billion kwhs
The tax rate for Invested Capital Taxes is 0.8 percent of invested capital. These taxes
are imposed on
electric cooperatives that are required to file reports with the Rural Utilities Service;
persons engaged in the business of distributing, supplying, furnishing, or selling
natural gas who are subject to the Gas Revenue Tax; and
water companies subject to taxes imposed by the Illinois Income Tax Act.
The state TIMF is imposed on persons in the business of transmitting, supplying, or
furnishing telecommunications and all associated services in Illinois for compensation
(i.e., telecommunications retailers). The state TIMF is imposed on the gross charges at
the rate of 0.5 percent.
Net collections from replacement taxes are distributed eight times annually to local taxing
districts. Distributions are made in January, March, April, May, July, August, October, and
December.
The formula for distributing replacement tax collections is as follows:
51.65 percent is distributed to Cook County taxing districts, which is then distributed
to the taxing districts in the county on the basis of each district’s share of personal
property tax collection for the 1976 tax year
48.35 percent is distributed to taxing bodies in downstate counties, which is
distributed based on each district’s share of personal property tax collection for the
1977 tax year.
The term “sales tax” actually refers to several tax acts. Sales tax is generally a
combination of “occupation” taxes that are imposed on sellers’ receipts and “use” taxes
that are imposed on amounts paid by purchasers. Sellers owe the occupation tax to the
department; they reimburse themselves for this liability by collecting use tax from the
buyers. “Sales tax” is the combination of all state, local, mass transit, water commission,
home rule occupation and use, non-home rule occupation and use, park and recreation
district, and county public safety taxes.
The basic rate for general merchandise (including items that must be titled or
registered) is 6.25 percent. This basic rate is allocated as shown below.
5.00 state portion ( 80 percent of total collections)
+ 1.25 local portion ( 20 percent of total collections)
6.25 total basic rate (100 percent of total collections)
*See 86 Ill. Adm. Code 130.310.
Tax Rates
and Distribution Formulas
Replacement Taxes
• Personal Property
Replacement Income
Tax
• Electricity Distribution
Tax
• Invested Capital Taxes
• Telecommunications
Infrastructure
Maintenance Fee
State “Sales” Tax
