Illinois Department of Revenue
 
 
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Rebate Sharing Agreement FAQ’s

 
 

What is a rebate sharing agreement?

A rebate sharing agreement is an agreement made by a local government (municipality or county) to share or rebate any portion of retailers’ occupation taxes (including, but not limited to, the local share of the state retailer’s occupation taxes, or home rule, non-home rule, or business district taxes) generated by retail sales of tangible personal property.  This includes agreements with retailers, developers, consultants, or other local governments or taxing jurisdictions.

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Do rebate sharing agreements between local governments and other taxing jurisdictions have to be reported under this new law, (i.e. agreements between two municipalities, between a municipality and a county, or between a municipality and a school district)?

Yes. Any agreement in which a local government shares a portion of the sales tax allocations with another business, local government, or taxing district needs to be reported. If the entity does not have a sales tax account ID, the FEIN should be entered as the Account ID.

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We have a situation where sales tax sharing is stipulated in the covenants of a bond issue. Certain incremental sales taxes generated by the tenants of the shopping center, are turned over to a bank trust department which is operating as a bond registrar and paying agent for a bond issue. The paying agent then pays the bond holders. Are these types of agreements subject to the rebate sharing reporting requirement?

No. Bond agreements are not subject to the rebate sharing reporting requirement. This situation describes repayment of bonds, not “sharing” of the sales taxes.

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Is this a new requirement or should this rebate sharing agreement information have been reported before?

This is a new requirement effective January 1, 2013. Agreements that expired or terminated prior to January 1, 2013 do not have to be reported.

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When is my rebate sharing agreement report due?

The department will consider reports timely filed if they are submitted by May 1, 2013. This deadline applies to all agreements in effect from January 1, 2013 through April 1, 2013. Agreements entered into after April 1, 2013, are required to be reported via this web application within 30 days following the execution of the agreement.

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Is there a reporting requirement if my local government does not have any rebate sharing agreements at this time?

No. If the local government does not have any rebate sharing agreements, there is no reporting requirement.

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If my municipality is in more than one county, which location code do I use to log in and report a rebate sharing agreement?

You must log in to the application using the first seven digits of the location code for the business from which the rebated sales taxes are generated. Email the Local Tax Allocation Division using the form at the bottom of this page if you have questions.

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How do I complete the agreement report if the rebate sharing agreement is between my local government and a developer or consulting firm?

In the business information section, enter the FEIN for the developer or consulting firm in the account ID field if the business does not have a sales tax account ID. In the business name field, enter the name of the developer or consulting firm. Then, under location address(es), enter the business address within your local government from which rebated sales are made. For example, the location address may be the developer’s address at the development, such as the mall office.

In section (I) under the terms of the agreement, describe the formula used to distribute the rebate of sales tax for each year of the agreement. For example, 50 percent of the retailers’ occupation taxes generated by tenants of the development (shopping mall) will be paid to the developer for each year of the agreement until a total aggregate of $1,500,000.00 is paid, or 10 years, whichever comes first.

In section (II) under the terms of the agreement, enter the beginning and ending dates for the rebate sharing agreement. Note: If there is a distribution limit on the amount to be rebated which would end the agreement prior to the ending date entered in section (II), specify the limit in section (I).

In section (III) under the terms of the agreement, list the name of each additional party to the agreement and each business which directly or indirectly receives a share, refund, or rebate of the retailers’ occupation tax.

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How do I report agreements with multiple parties to the agreement?

In the business information section, enter the account ID and business name of the primary party.

In section (III) under the terms of the agreement, list the name of each additional party to the agreement and each business which directly or indirectly receives a share, refund, or rebate of the retailers’ occupation tax.

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How do I enter the end date under section (II) of the terms of the agreement if there is no defined end date for the agreement?

Enter a “high” date, such as 12/31/2099.

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What if I discover a mistake after I have submitted an agreement report?

Submit your corrected report by logging in and clicking “Add Agreement”. Go through the steps to enter and submit a new agreement. Then email the Local Tax Allocation Division to notify us of the corrected report submission and identify the incorrect report. We will remove the incorrect report from your local government’s list of agreement reports.

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How do I submit an amendment to an agreement?

If your local government amends an existing rebate sharing agreement, go through the steps to enter and submit a new agreement.

In section (I) under the terms of the agreement, include the date the agreement was amended.

In section (II) under the terms of the agreement, enter the date the agreement was amended as the beginning date.

Under the section for supporting documentation, upload a copy of the amended agreement.

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What do I do if an agreement is terminated prior to the end date that I entered on the agreement report?

Email the Local Tax Allocation Division and we will update the report you submitted. Be sure to include in your email your local government’s name, the business name listed on the rebate sharing agreement that is receiving monies from the local government, and the termination date of the agreement.

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What information will be publicly available starting July 1, 2013?

The agreement reports will be searchable by business name and local government name. The information from the rebate sharing agreement reports will be viewable once selected, however the Department will redact confidential information as required by statute.  The uploaded copy of the agreement will not be included with the rebate sharing reports. The local governments filing the reports are solely responsible for their content. The Department cannot verify the accuracy or completeness of the reports that are submitted.  Any questions about the information contained in the reports should be directed to the local government filing the report.

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