POST BOARD ACTION AGENDA

 

Special Meeting of the Cook County Board of Commissioners

County Board Room, County Building

Thursday, October 30, 2003, 2:00 P.M.

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CALL OF THE MEETING

 

ITEM #1

 

Roll call.

 

ROLL CALL

 

Present:            Commissioners Butler, Claypool, Collins, Daley, Gorman, Goslin, Hansen, Maldonado, Moreno, Peraica, Silvestri, Sims, Steele, Suffredin and President Stroger - 15.

 

Absent:             Murphy and Quigley - 2.

 

EXECUTIVE BUDGET FOR FISCAL YEAR 2004

 

ITEM #2

 

Message of the President to the Board of Cook County Commissioners submitting the Executive Budget for Fiscal Year 2004.

 

*  *  *  *  *

 

ITEM #3

 

 

Referral of Budget and Revenue Ordinances to Finance Committee.

 

Submitting a Proposed Ordinance sponsored by

 

JOHN H. STROGER, JR., President, Cook County Board of Commissioners

 

PROPOSED ORDINANCE

 

COOK COUNTY PERSONAL PROPERTY LEASE TRANSACTION TAX

 

            WHEREAS, the County of Cook is a home rule unit of local government pursuant to Article VII, Section 6(a) of the 1970 Illinois Constitution; and

 

            WHEREAS, as a home rule county, County of Cook is authorized by 55 ILCS 5/5-1009 to impose a tax upon all lease receipts; and

 

            WHEREAS, the Board of Cook County Commissioners finds that such alternative and new sources of revenue are required to fund the operations of Cook County Government.

 

            NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF COMMISSIONERS OF THE COUNTY OF COOK, ILLINOIS AS FOLLOWS:

 

SECTIONS:

1.      Title.

2.      Definitions.

3.      Tax Imposed.

4.      Exempt Lessees.

5.      Exempt Leases, Rentals or Uses.

6.      Collection and Remittance Responsibilities of Lessors.

7.      Tax Remittance and Returns.

8.      Registration.

9.      Contents of Lease Agreements.

10.    Maintaining Books and Records.

11.    Rules and Regulations.

12.    Application of Uniform Revenue Procedures Ordinance.

13.    Penalties.

14.    Severability.

PROPOSED ORDINANCE continued

ITEM #3 cont'd

 

Section 1         Title.

 

This ordinance shall be known and may be cited as the Cook County Personal Property Lease Transaction Tax Ordinance.  The tax imposed by this ordinance shall be known as the “Cook County Personal Property Lease Transaction Tax," and is imposed in addition to all other taxes imposed by Cook County, the State of Illinois or any other municipal corporation or political subdivision of the State of Illinois.

 

 

Section 2         Definitions.

 

When any of the following words or terms is used in this chapter, whether or not capitalized and whether or not used in a conjunctive or connective form, they shall have the meaning or construction ascribed to them in this section:

 

         A.  "County" means the County of Cook, Illinois.

 

         B.   "Computer" means, but not by way of limitation, a device that accepts, processes, stores, retrieves, or outputs data including, but not limited to, storage and telecommunication devices or other computer hardware connected to or used with computers.

 

         C.   "Computer program" or “program” means, but not by way of limitation, a series of coded instructions or statements in a form acceptable to a computer and intended for execution on a computer, either directly or indirectly, to bring about a certain result, such as causing the computer to process data and supply the results of the data processing.

 

         D.  "Computer software" or "software" means, but not by way of limitation, data and information that are associated with the hardware of a computer such as a collection of computer programs, routines, compilers, assemblers, translators, manuals, circuit diagrams and operation procedures.

 

         E.   "Data" or "database" means, but not by way of limitation, a representation of information, knowledge, facts, concepts or instructions, including program documentation, which is prepared in a formalized manner and is stored or processed in or transmitted by a computer.  Data may be in any form including, but not limited to, reports, printouts, magnetic or optical storage media, punch cards or data stored internally in the memory of the computer.

 

         F.   "Department of Revenue" or "Department” means the Department of Revenue of Cook County.

 

         G.   "Director of Revenue" or "Director” means the Director of Revenue of Cook County.

 

         H.  “Lease” or "rental" means any transfer of the possession or use of personal property, but not title or ownership, to a user for consideration, whether or not designated as a lease, rental, license or by some other term, and includes a "nonpossessory lease."

 

The term “nonpossessory lease" means a lease or rental wherein use but not possession of the personal property is transferred and includes, but is not limited to, leased time on or use of any and all personal property not otherwise itself rented, such as leased time on or for the use of addressing machines, billboards, calculators, computers, computer software, copying equipment or data processing equipment, whether the time is fully or partially utilized, and specifically includes a "nonpossessory computer lease."

 

The term "nonpossessory computer lease" means a nonpossessory lease in which the customer obtains access to the provider's computer and uses the computer and its software to input, modify or retrieve data or information, in each case without the intervention (other then de minimis intervention) of personnel acting on behalf of the provider.  The term "nonpossessory computer lease” includes, but is not limited to, time-sharing or time or other use of a computer with other users.  In the case of a nonpossessory computer lease, the location of the terminal or other device by which a user accesses the computer shall be deemed to be the place of lease or rental and the place of use of the computer for purposes of the tax imposed by this section.

PROPOSED ORDINANCE continued

ITEM #3 cont'd

 

               The words "lease" or "rental" shall include a transfer of the use of software within the meaning of this section only if, for purposes of the Illinois Retailers' Occupation Tax and Illinois Use Tax, the software is not "custom" software and the transfer is an exempt license of software.

 

         I.    “Lease or rental payment period” means the length of time or period of use that is covered by a single lease or rental payment as agreed to under the terms of the lease or rental agreement.

 

         J.    “Lease receipt” or “rental receipt” means the consideration for the lease or rental of personal property, valued in money, whether received in money or otherwise, including cash, credits, property and services, determined without any deduction for costs or expenses whatsoever.  The “lease receipt” or "rental receipt," in the case of a nonpossessory computer lease, includes all charges for the use of the computer's hardware, computer software, computer programs and databases for any purpose whether or not the charge for use is measured by the actual amount of time used or by some other measure.

 

               A transfer of the use or ownership of personal property, or a provision of a service, that is ancillary to a nonpossessory computer lease shall be deemed a separate transaction for purposes of determining whether the charge for the transfer or the service is includible in the lease or rental price of the nonpossessory computer lease only if the transfer or service is optional.  The charge for a transfer or service that is not optional shall be included in the lease or rental price of the underlying nonpossessory computer lease, even if a separate charge for the transfer or service is stated in a contract or invoice.  A transfer or service shall be considered optional for this purpose only if the lessee could have obtained the same nonpossessory computer lease from the same lessor without the transfer or service.

 

         K.  “Lessee” means any person who leases or rents personal property from another, whether the lease or rental price is paid by the lessee or by another person.

 

         L.   “Lessor” means any person, including the assignee of any lease or rental agreement, who leases or rents personal property to users.

 

         M.  "Membership organization" means a corporation or other person that is organized on a membership basis.  A person is wholly owned by members of a membership organization, and that is operated primarily to furnish goods, services or facilities to members of the organization, shall be deemed a membership organization, its owners shall be deemed its members, and the membership organization and the deemed membership organization shall be treated as a member of the other.  A person having trading privileges on an exchange that either is a membership organization, or is directly or indirectly owned 100 percent by a membership organization, shall be treated as a member of the membership organization.  The term “membership organization" does not include an organization whose primary purpose is to sell or lease personal property to persons who do not manage the organization, have the right to elect management, or have trading privileges on the organization.

 

         N.  “Person" means any individual, receiver, administrator, executor, conservator, trust, estate, partnership, joint venture, club, joint stock company, business trust, corporation, association, limited liability company, membership organization, syndicate, society, or any group of individuals acting as a unit, whether mutual, cooperative, fraternal nonprofit, or otherwise, or the state of Illinois or any political subdivision thereof, or the United States or any instrumentality thereof.

 

         O.  “Personal property" means any and all property other than real property.

 

         P.   "Use" means the exercise of any right to or power over personal property by a lessee incident to the lease or rental of that property including, but not limited to, the permanent or temporary storage, stationing or garaging of personal property by the lessee.  “Use” by a lessee includes not only the use of personal property directly by the lessee but also the use of personal property by the lessee's agents, representatives or other authorized designees.

 

Section 3         Tax Imposed.

 

         A.  Except as otherwise provided in this ordinance, a tax is imposed upon receipts from the lease or rental in the County of personal property.

PROPOSED ORDINANCE continued

ITEM #3 cont'd

 

         B.   The rate of the tax shall be 4% percent of the lease or rental receipts.  The tax shall be paid by the lessor at the time of receipt of each lease or rental payment, and each tax payment shall be determined by applying the tax rate to the lease or rental payment.

 

         C.   For purposes of this chapter, the lease or rental of personal property shall be deemed to take place at the location where the lessee takes possession or delivery of the personal property.

 

         D.  Notwithstanding Section 3.A, a lessor of personal property leased or rented in the County shall not be required to pay tax upon the receipt of any lease or rental payment period in which the personal property is used solely outside the County; provided, however, that this subsection 3(D) shall not apply to the lease or rental payment period in which the lessee takes possession or delivery of the personal property at a location in the County.

 

         E.   Nothing in this ordinance shall be construed to impose a tax upon any transaction or privilege, which, under the constitutions of the United States or the State of Illinois, may not be made the subject of taxation by the County.

 

Section 4         Exempt Leases.

 

Notwithstanding any other provision of this ordinance, the following lessors shall be exempt from the tax imposed by Section 3:

 

         A.  A lessor that is a governmental body;

 

         B.   A lessor that is an organization organized and operated exclusively for charitable, educational or religious purposes.

 

Section 5         Exempt Leases and Rentals.

 

         A.  Notwithstanding any other provision of this ordinance, the following leases and rentals shall be exempt from the tax imposed by Section 3:

 

               (1)  The lease or rental by an interstate carrier for hire of rolling stock actually moving in interstate commerce.

 

(2)    The lease or rental of personal property where the lease or rental price is paid in its entirety by inserting one or more coins or bills of currency of the United States into a mechanism attached to the personal property.

 

               (3)  The lease or rental of medical appliances or medical equipment by a person for the purpose of correcting or treating parts of his or her own body.

 

               (4)  The lease or rental of personal property if the lessor and lessee are members of the same related group.  For purposes of this exemption, the term "related group" means a person and all other persons directly or indirectly owned 100 percent by the person.  A person shall be deemed to own a corporation if it directly or indirectly owns 100 percent of the corporation's outstanding voting stock.

 

               (5)  The lease or rental of personal property that is leased by a membership organization to a member of such membership organization, or by a person that is wholly owned directly or indirectly by one or more membership organizations to a member of any of such membership organizations, provided that substantially all of the lessor's leases of personal property of the same type are to such members.

 

               (6)  The nonpossessory lease of a computer to effectuate the execution, clearing, processing, matching or recording of a trade on a board of trade designated as a contract market by the Commodity Futures Trading Commission or on a securities exchange registered with the Securities and Exchange Commission, or any other trade of any security (as defined in Section 475(c)(2) of the Internal Revenue Code of 1986, as amended, without regard to the last sentence thereof), or any comparable security with respect to commodities, whether or not the parties to the lease also are parties to the trade.

PROPOSED ORDINANCE continued

ITEM #3 cont'd

 

               (7)  The nonpossessory lease of a computer to effectuate the deposit, withdrawal, transfer or loan of money or securities, including any related review of accounts or investment options by the account owner, whether or not the parties to the lease also are parties to the deposit, withdrawal, transfer or loan.

 

               (8)  Under rules to be prescribed by the Department, the nonpossessory lease of a computer in which the customer's use or control of the provider's computer is de minimis and the related charge is predominantly for information transferred to the customer rather than for the customer's use or control of the computer, such as the nonpossessory lease of a computer to receive either current price quotations or other information having a fleeting or transitory character.

 

               (9)  The lease or rental of a motion picture film by an owner, manager or operator of an amusement that exhibits the film to patrons who are subject to the tax imposed by the Cook County Amusement Tax.

 

         B.   For purposes of applying any of the exemptions contained in this section, every lease or rental payment period shall be deemed a separate transaction or privilege.  Any person claiming an exemption shall have the burden of proving entitlement to the exemption for each lease or rental payment period for which the exemption is claimed.

 

Section 6         Collection and Remittance.

 

It shall be the duty of each lessor to remit the tax to the Department in accordance with Section 7 of this ordinance. 

 

Section 7         Tax Remittance and Returns.

 

On or before the last day of each calendar month, every lessor shall remit to the Department the tax attributable to lease or rental payments received during the immediately preceding calendar month. Each lessor shall file with the Department a remittance return.  The remittance return shall be in a form prescribed by the Director, containing such information as the Director may reasonably require. 

 

A lessor must remit tax and file remittance on a cash basis.

 

Section 8         Registration.

 

         A.  Every lessor that maintains an office or principal place of business in the County or that is required to pay the tax imposed by this ordinance shall register with the Department on a form prescribed by the Director within 30 days after the effective date of this ordinance, or within 30 days after establishing an office or principal place of business in the County or becoming subject to tax payment responsibilities, as the case may be.

 

         B.   If any information provided by a lessor on a registration form ceases to be accurate, then the lessor must file a corrected form with the Department.

 

Section 9         Contents of Lease Agreement.

 

Unless different requirements are promulgated in regulations issued by the Department, the requirements of this section shall apply.  Every lease or rental agreement, or memorandum or transaction receipt of lease or rental, shall indicate the date of the transaction which it evidences, the name of the lessor, the personal property to which it relates,  and the amount of each lease or rental payment.  All leases, rental agreements, and memoranda or transaction receipts of leases or rentals, shall bear a number upon their face.  No more than one lease or rental agreement, or memorandum or transaction receipt of lease or rental, made by a lessor on any given date shall bear the same number.  The number identifying the lease or rental agreement, or memorandum or transaction receipt of lease or rental, shall be entered and recorded in the books of account required to be kept by Section 10 of this ordinance.

PROPOSED ORDINANCE continued

ITEM #3 cont'd

 

Section 10       Maintaining Books and Records.

 

Every lessor shall retain for at least five years accurate books and records of each transaction or activity requiring that person to collect and remit or to pay the tax imposed by this ordinance, including all original source documents.  All such books and records shall be kept in the English language and, at all reasonable times during business hours of the day, shall be open to inspection by the Department.

 

Section 11       Rules and Regulations.

 

The Director is authorized to adopt, promulgate and enforce rules and regulations pertaining to the administration and enforcement of this ordinance.

 

Section 12       Uniform Penalties, Interest and Procedures Provisions.

 

Whenever not inconsistent with the previsions of this ordinance or whenever this ordinance is silent, the Uniform Penalties, Interest and Procedures provisions set forth in Article to of “An Ordinance Establishing the Department of Revenue, County of Cook,” dated November 20, 1992, (hereinafter “the Uniform Penalties, Interest and Procedures”) shall apply.

 

Section 13       Penalties.

 

Any violation of the ordinance shall be punishable by a fine of not less than $100.00 and not more than $1,000.00 or imprisonment for a period not to exceed six (6) months, or by both such fine and imprisonment. It shall be deemed a violation of this ordinance for any person knowingly to furnish false or inaccurate information as required herein.  Criminal prosecutions pursuant to this ordinance shall in no way bar the right of Cook County to institute proceedings to recover delinquent taxes, interest and penalty due and owing, as well as costs incurred for such proceeding. Civil penalties and interest assessed pursuant to this ordinance shall be computed at a rate provided by the Uniform Penalty, Interest and Procedures.

 

Section 14       Severability.

 

If any clause or other portion of this ordinance is held invalid, that decision shall not affect the validity of the remaining portions of this ordinance. It is hereby declared that all such remaining portions of this ordinance are severable, and that the Cook County Board of Commissioners would have enacted the remaining portions if the portions that may be so held to be invalid had not been included in this ordinance.

 

 

Submitting a Proposed Ordinance Amendment sponsored by

 

JOHN H. STROGER, JR., President, Cook County Board of Commissioners

 

PROPOSED ORDINANCE AMENDMENT

 

COUNTY OF COOK, ILLINOIS

ORDINANCE AMENDING

HOME RULE COUNTY RETAILERS’ OCCUPATION TAX

 

            WHEREAS, County of Cook is a home rule unit of local government pursuant to Article VII, Section 6(a) of the 1970 Illinois Constitution, and

 

            WHEREAS, as a home rule county, County of Cook is authorized by 55ILCS 5\5-1006, as amended, to impose a tax upon all persons in Cook County engaged in the business of selling tangible personal property, and

 

            WHEREAS, the Board of Cook County Commissioners finds that additional revenue is required to fund the operations of Cook County Government, and

 

            WHEREAS, on May 4, 1992, the Board of Cook County Commissioners adopted an ordinance imposing the Home Rule County Retailers’ Occupation Tax.

PROPOSED ORDINANCE AMENDMENTS continued

ITEM #3 cont'd

 

            NOW, THEREFORE, BE IT ORDAINED THAT:

 

SECTION 1:   As authorized by the Home Rule County Retailers’ Occupation Tax Law (55ILCS 5\5-1006, on and after September 1, 1992, a tax is imposed county-wide upon all persons in Cook County engaged in the business of selling tangible personal property at retail, at the rate of 3/4% 1% of the gross receipts from such sales made in the course of such business.  The tax shall be paid in the manner provided by the Home Rule County Retail Occupation Tax Law.

 

SECTION 2:   The tax herein provided for shall not be imposed on the sales of food for human consumption which is to be consumed off the premises where it is sold (other than alcoholic beverages, soft drinks and food which has been prepared for immediate consumption), or on prescription and non-prescription medicines, drugs, medical appliances and insulin, urine testing materials, or syringes and needles used by diabetics.  The tax herein provided for shall not apply to tangible personal property titled or registered with an agency of this State’s government.  Nothing in this Ordinance shall be construed to authorize imposition of a tax on the privilege of  engaging in any business which, under the Constitution of the United States, may not be made the subject of taxation.

 

SECTION 3:   The Clerk of the Board is hereby authorized and directed to obtain and transmit a certified copy of this Ordinance to the Illinois Department of Revenue not later than five days after its effective date, and in no case later than April 1, 2004.

 

SECTION 4:   This Ordinance shall be known and cited as the “COOK COUNTY HOME RULE COUNTY RETAILERS’ OCCUPATION TAX ORDINANCE” and shall be effective upon its passage.

 

 

Submitting a Proposed Ordinance Amendment sponsored by

 

JOHN H. STROGER, JR., President, Cook County Board of Commissioners

 

PROPOSED ORDINANCE AMENDMENT

 

COUNTY OF COOK, ILLINOIS

ORDINANCE AMENDING

HOME RULE COUNTY SERVICE OCCUPATION TAX

 

            WHEREAS, County of Cook is a home rule unit of local government pursuant to Article VII, Section 6(a) of the 1970 Illinois Constitution, and

 

            WHEREAS, as a home rule county, County of Cook is authorized by 55 ILCS 5\5-1007, as amended, to impose a tax upon all persons in Cook County engaged in the business of making sales of service, and

 

            WHEREAS, the Board of Cook County Commissioners finds that additional of revenue is required to fund the operations of Cook County Government, and

 

            WHEREAS, on May 4, 1992, the Board of Cook County Commissioners adopted an Ordinance imposing the Home Rule County Service Occupational Tax.

 

            NOW, THEREFORE, BE IT ORDAINED THAT:

 

Section 1.        As authorized by the Home Rule County Service Occupation Tax Law (ILCS 5\5-1007), on and after September 1, 1992, a tax is imposed countywide upon all persons in Cook County engaged in the business of making sales of service at the rate of 3/4% 1% of the selling price of all tangible personal property transferred by such service person either in the form of tangible personal property or in the form of real estate as an incident to a sale of service.  The tax shall be paid in the manner provided by the Home Rule County Service Occupation Tax Law.

PROPOSED ORDINANCE AMENDMENTS continued

ITEM #3 cont'd

 

Section 2.        The tax herein provided for shall not be imposed on the sales of food for human consumption which is to be consumed off the premises where it is sold (other than alcoholic beverages, soft drinks and food which has been prepared for immediate consumption), or on prescription and nonprescription medicines, drugs, medical appliances and insulin, urine testing materials, or syringes and needles used by diabetics.  Nothing in this Ordinance shall be construed to authorize imposition of a tax on the privilege of engaging in any business which, under the Constitution of the United States, may not be made the subject of taxation.

 

Section 3.        The Clerk of the Board is hereby authorized and directed to obtain and transmit a certified copy of this Ordinance to the Illinois Department of Revenue not later than five days after its effective date, and in no case later than April 1, 2004.

 

Section 4.        This Ordinance shall be known and cited as the “COOK COUNTY HOME RULE COUNTY SERVICE OCCUPATION TAX ORDINANCE” and shall be effective upon its passage.

 

 

MOTION TO ADJOURN

 

ITEM #4

 

 

Roll call.