To further explain the criminal enforcement of criminal sales tax violations, please see below for the new law broken down and explained in parts. This will help in understanding the new legislation. You can refer to the definition of ROT below to help in understanding the new amendment. The excerpts below reflect the legislative intent and application of the law.
Amendment to House Bill 5289
Below is the amendment to House Bill 5289 that creates the new law of sales tax evasion:
AMENDMENT TO HOUSE BILL 5289 AMENDMENT NO. ______. Amend House Bill 5289 on page 1, by replacing lines 7 and 8 with the following: “Sec. 13. Criminal penalties. (a) When the amount due is under $300, any person engaged in the business of selling tangible personal property”;
On page 2, line 3, replace “$1,000” with “$3,000” On page 2, line 22, replace “$1,000” with “$3,000” On page 7, replace line 4 with: “(b) A person commits the offense of sales tax evasion under this Act”; On page 7, replace line 8 with: “the evasion. For purposes of this Section, an “affirmative act in furtherance of the evasion” means an act designed in whole or in part to:
conceal, misrepresent, falsify, or manipulate any material fact; or
tamper with or destroy documents or materials related to a person’s tax liability under this Act.
Two or more acts of sales tax evasion may be charged as”; On page 8, line 1, delete “non-probationable” On page 8, replace line 2 with: “(c) A prosecution for any act in violation of this Section may”
Illinois Retailers’ Occupation Tax Act (ROT)
Definition of “Sale at Retail”
“Sale at retail” means any transfer of the ownership of or title to tangible personal property to a purchaser, for the purpose of use or consumption, and not for the purpose of resale in any form as tangible personal property to the extent not first subjected to a use for which it was purchased, for a valuable consideration.
Provided that the property purchased is deemed to be purchased for the purpose of resale, despite first being used, to the extent to which it is resold as an ingredient of an intentionally produced product or byproduct of manufacturing.
For this purpose, slag produced as an incident to manufacturing pig iron or steel and sold is considered to be an intentionally produced byproduct of manufacturing.
Transactions whereby the possession of the property is transferred but the seller retains the title as security for payment of the selling price shall be deemed to be sales.
Frequently Asked Questions
What is considered criminal sales tax evasion in Chicago, Illinois?
Criminal sales tax evasion in Chicago, Illinois, occurs when a business or individual deliberately takes steps to avoid paying required sales tax. This includes actions like falsifying records, concealing transactions, or tampering with documents to misrepresent tax liabilities.
How did House Bill 5289 change the penalties for sales tax evasion?
House Bill 5289 increased the thresholds for certain penalties. For example, the monetary thresholds for offenses were raised from $1,000 to $3,000. It also clarified that multiple acts of evasion can be prosecuted together and provided a clear definition of “affirmative acts” constituting evasion.
What actions can lead to being charged with sales tax evasion?
Under the amended law, actions such as concealing or falsifying material facts, manipulating financial records, or destroying documents related to tax obligations can lead to charges of sales tax evasion. These are considered “affirmative acts” in furtherance of the crime.
What is the Illinois Retailers’ Occupation Tax Act (ROT) and how does it relate to sales tax?
The Illinois Retailers’ Occupation Tax Act (ROT) governs the collection of sales tax on retail sales of tangible personal property. It defines “sale at retail” and outlines the obligations of retailers in collecting and remitting sales tax to the state.
Can previous acts of evasion be combined into a single prosecution?
Yes, the amendment clarifies that two or more acts of sales tax evasion may be combined into a single charge. This means repeated acts over time can be aggregated, leading to potentially more severe legal consequences.
