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Local Government

Simplified Municipal Telecommunications Tax

What is the Simplified Municipal Telecommunications Tax?

This tax creates a single municipally imposed telecommunications tax. It replaces the

Who receives Simplified Municipal Telecommunications Tax distributions?

Only those municipalities that have imposed the tax by local ordinance or resolution receive distributions of Simplified Municipal Telecommunications Tax.

Is voter approval required before implementation?

No, voter approval is not required but a proper ordinance or resolution must be filed.

What must a municipality do to establish, change, or discontinue this tax?

When you initially establish a simplified telecommunications tax, or if you increase or decrease the rate, you must file a certified copy of the proper ordinance with us.

What is the deadline for filing a proper ordinance?

You must file with us on or before March 20 for the tax rate to take effect July 1 and on or before September 20 for the rate to take effect January 1 of the following year.

What tax rate can be imposed?

Simplified Municipal Telecommunications Tax may be imposed only in ¼ percent increments. There is a 6 percent maximum rate limit.

Who administers this tax?

The Illinois Department of Revenue is responsible for administering the Simplified Municipal Telecommunications Tax.

What is included in our monthly distributions?

In most instances, the money you receive each month represents your share of the tax paid on current returns. By that we mean returns that are filed and paid on time and in full. For the telecommunications tax return to be paid on time, it must be filed on or before the last day of each month following the end of the reporting period.

In addition to the current returns, your distributions will include taxes paid on late-filed returns, payments made for the assessed liability (including penalty and interest charges or additional tax due resulting from a reporting error), and amended returns filed by providers who are paying additional tax.

Why does the amount of my telecommunications tax distributions vary from month to month?

There are many reasons why the amount of telecommunications tax distributions you receive varies from month to month.

Most providers file their returns on a monthly basis. However, some providers qualify to file on a quarterly or annual basis. The distributions you receive in the months of June, September, and December will reflect your share of receipts reported by quarterly filers. The distributions you receive in March will reflect your share of receipts by both quarterly and annual filers.

Please keep in mind that not every provider files on a timely basis. If a provider’s return is not received timely, the amount paid will not be included in a current distribution and may “double up” the amount of telecommunications tax from their particular business for the following month.

Audits completed on accounts, approved overpayments or claims for credit, and payments collected for additional liability also cause variance in distributions. In addition a provider may file amended returns either requesting a refund for overpayment of taxes or by paying additional liability. Either of these situations impact your monthly distribution.

Are there any other facts you should know?

A ½ percent administrative fee is retained by the state treasurer to cover the costs we incur administering taxes imposed by municipalities.

Providers are allowed to take a 1 percent discount for timely filing and payment of these taxes. Any allowable discount that is taken is reflected in the local government distributions that are made.

What financial information is available to the local government?

Local governments that impose the simplified municipal telecommunications tax may enter into a reciprocal agreement for exchange of information with us. This exchange allows designated individuals within the local government to receive specific financial information. Under the terms of the agreement, and in accordance with the Illinois Compiled Statutes, the information provided must be kept confidential.

To update an information exchange agreement or for more information concerning the exchange of information between the Illinois Department of Revenue and local governments, please contact:

Disclosure Officer
Illinois Department of Revenue
101 West Jefferson Street
Springfield, IL 62794

Or by phone: 217-524-7738

Statutory reference: Simplified Municipal Telecommunications Tax Act, 35 ILCS 636/5-1