093_HB3843

                                     LRB093 13105 SJM 18355 b

 1        AN ACT in relation to taxes.

 2        Be it enacted by the People of  the  State  of  Illinois,
 3    represented in the General Assembly:

 4        Section  5.  The  Use  Tax  Act  is  amended  by changing
 5    Section 3-5 as follows:

 6        (35 ILCS 105/3-5) (from Ch. 120, par. 439.3-5)
 7        Sec. 3-5.  Exemptions.  Use  of  the  following  tangible
 8    personal property is exempt from the tax imposed by this Act:
 9        (1)  Personal  property  purchased  from  a  corporation,
10    society,    association,    foundation,    institution,    or
11    organization, other than a limited liability company, that is
12    organized and operated as a not-for-profit service enterprise
13    for  the  benefit  of persons 65 years of age or older if the
14    personal property was not purchased by the enterprise for the
15    purpose of resale by the enterprise.
16        (2)  Personal  property  purchased  by  a  not-for-profit
17    Illinois county  fair  association  for  use  in  conducting,
18    operating, or promoting the county fair.
19        (3)  Personal property purchased by a not-for-profit arts
20    or  cultural organization that establishes, by proof required
21    by the Department by rule, that it has received an  exemption
22    under Section 501(c)(3) of the Internal Revenue Code and that
23    is  organized  and operated primarily for the presentation or
24    support of  arts  or  cultural  programming,  activities,  or
25    services.   These  organizations include, but are not limited
26    to, music and dramatic arts organizations  such  as  symphony
27    orchestras  and  theatrical groups, arts and cultural service
28    organizations,   local    arts    councils,    visual    arts
29    organizations, and media arts organizations. On and after the
30    effective  date  of  this  amendatory Act of the 92nd General
31    Assembly, however, an  entity  otherwise  eligible  for  this
 
                            -2-      LRB093 13105 SJM 18355 b
 1    exemption  shall not make tax-free purchases unless it has an
 2    active identification number issued by the Department.
 3        (4)  Personal property purchased by a governmental  body,
 4    by   a  corporation,  society,  association,  foundation,  or
 5    institution   organized   and   operated   exclusively    for
 6    charitable,  religious,  or  educational  purposes,  or  by a
 7    not-for-profit corporation, society, association, foundation,
 8    institution, or organization that has no compensated officers
 9    or employees and that is organized and operated primarily for
10    the recreation of persons 55 years of age or older. A limited
11    liability company may qualify for the  exemption  under  this
12    paragraph  only if the limited liability company is organized
13    and operated exclusively for  educational  purposes.  On  and
14    after July 1, 1987, however, no entity otherwise eligible for
15    this exemption shall make tax-free purchases unless it has an
16    active   exemption   identification   number  issued  by  the
17    Department.
18        (5)  Until July 1,  2003,  a  passenger  car  that  is  a
19    replacement  vehicle to the extent that the purchase price of
20    the car is subject to the Replacement Vehicle Tax.
21        (6)  Until July  1,  2003,  graphic  arts  machinery  and
22    equipment,  including  repair and replacement parts, both new
23    and used, and including that manufactured on  special  order,
24    certified  by  the purchaser to be used primarily for graphic
25    arts  production,  and  including  machinery  and   equipment
26    purchased   for  lease.    Equipment  includes  chemicals  or
27    chemicals acting as catalysts but only if  the  chemicals  or
28    chemicals  acting  as catalysts effect a direct and immediate
29    change upon a graphic arts product.
30        (7)  Farm chemicals.
31        (8)  Legal  tender,  currency,  medallions,  or  gold  or
32    silver  coinage  issued  by  the  State  of   Illinois,   the
33    government of the United States of America, or the government
34    of any foreign country, and bullion.
 
                            -3-      LRB093 13105 SJM 18355 b
 1        (9)  Personal property purchased from a teacher-sponsored
 2    student   organization   affiliated  with  an  elementary  or
 3    secondary school located in Illinois.
 4        (10)  A motor vehicle of  the  first  division,  a  motor
 5    vehicle of the second division that is a self-contained motor
 6    vehicle  designed  or permanently converted to provide living
 7    quarters for  recreational,  camping,  or  travel  use,  with
 8    direct  walk through to the living quarters from the driver's
 9    seat, or a motor vehicle of the second division  that  is  of
10    the  van configuration designed for the transportation of not
11    less than 7 nor  more  than  16  passengers,  as  defined  in
12    Section  1-146 of the Illinois Vehicle Code, that is used for
13    automobile renting, as  defined  in  the  Automobile  Renting
14    Occupation and Use Tax Act.
15        (11)  Farm  machinery  and  equipment, both new and used,
16    including that manufactured on special  order,  certified  by
17    the purchaser to be used primarily for production agriculture
18    or   State   or   federal  agricultural  programs,  including
19    individual replacement parts for the machinery and equipment,
20    including machinery and equipment purchased  for  lease,  and
21    including implements of husbandry defined in Section 1-130 of
22    the  Illinois  Vehicle  Code, farm machinery and agricultural
23    chemical and fertilizer spreaders, and nurse wagons  required
24    to  be registered under Section 3-809 of the Illinois Vehicle
25    Code, but excluding  other  motor  vehicles  required  to  be
26    registered  under  the  Illinois  Vehicle Code. Horticultural
27    polyhouses or hoop houses used for propagating,  growing,  or
28    overwintering  plants  shall be considered farm machinery and
29    equipment under this item (11). Agricultural chemical  tender
30    tanks  and dry boxes shall include units sold separately from
31    a motor vehicle  required  to  be  licensed  and  units  sold
32    mounted  on  a  motor  vehicle required to be licensed if the
33    selling price of the tender is separately stated.
34        Farm machinery  and  equipment  shall  include  precision
 
                            -4-      LRB093 13105 SJM 18355 b
 1    farming  equipment  that  is  installed  or  purchased  to be
 2    installed on farm machinery and equipment including, but  not
 3    limited   to,   tractors,   harvesters,  sprayers,  planters,
 4    seeders, or spreaders. Precision farming equipment  includes,
 5    but  is  not  limited  to,  soil  testing sensors, computers,
 6    monitors, software, global positioning and  mapping  systems,
 7    and other such equipment.
 8        Farm  machinery  and  equipment  also includes computers,
 9    sensors, software, and related equipment  used  primarily  in
10    the  computer-assisted  operation  of  production agriculture
11    facilities,  equipment,  and  activities  such  as,  but  not
12    limited to, the collection, monitoring,  and  correlation  of
13    animal  and  crop  data for the purpose of formulating animal
14    diets and agricultural chemicals.  This item (11)  is  exempt
15    from the provisions of Section 3-90.
16        (12)  Fuel  and  petroleum products sold to or used by an
17    air common carrier, certified by the carrier to be  used  for
18    consumption,  shipment,  or  storage  in  the  conduct of its
19    business as an air common carrier, for a flight destined  for
20    or  returning from a location or locations outside the United
21    States without regard  to  previous  or  subsequent  domestic
22    stopovers.
23        (13)  Proceeds  of  mandatory  service charges separately
24    stated on customers' bills for the purchase  and  consumption
25    of food and beverages purchased at retail from a retailer, to
26    the  extent  that  the  proceeds of the service charge are in
27    fact turned over as tips or as a substitute for tips  to  the
28    employees  who  participate  directly  in preparing, serving,
29    hosting or cleaning up the food  or  beverage  function  with
30    respect to which the service charge is imposed.
31        (14)  Until   July   1,   2003,  oil  field  exploration,
32    drilling, and production equipment, including  (i)  rigs  and
33    parts  of  rigs,  rotary  rigs, cable tool rigs, and workover
34    rigs, (ii) pipe and tubular goods, including casing and drill
 
                            -5-      LRB093 13105 SJM 18355 b
 1    strings, (iii) pumps and pump-jack units, (iv) storage  tanks
 2    and  flow  lines, (v) any individual replacement part for oil
 3    field exploration, drilling, and  production  equipment,  and
 4    (vi)   machinery  and  equipment  purchased  for  lease;  but
 5    excluding motor vehicles required to be registered under  the
 6    Illinois Vehicle Code.
 7        (15)  Photoprocessing  machinery and equipment, including
 8    repair and replacement parts, both new  and  used,  including
 9    that   manufactured   on  special  order,  certified  by  the
10    purchaser to  be  used  primarily  for  photoprocessing,  and
11    including  photoprocessing  machinery and equipment purchased
12    for lease.
13        (16)  Until  July  1,  2003,  coal  exploration,  mining,
14    offhighway hauling, processing, maintenance, and  reclamation
15    equipment,  including  replacement  parts  and equipment, and
16    including equipment purchased for lease, but excluding  motor
17    vehicles required to be registered under the Illinois Vehicle
18    Code.
19        (17)  Until  July  1,  2003,  distillation  machinery and
20    equipment, sold as a unit or kit, assembled or  installed  by
21    the  retailer,  certified by the user to be used only for the
22    production of ethyl alcohol that will be used for consumption
23    as motor fuel or  as  a  component  of  motor  fuel  for  the
24    personal use of the user, and not subject to sale or resale.
25        (18)  Manufacturing    and   assembling   machinery   and
26    equipment used primarily in the process of  manufacturing  or
27    assembling tangible personal property for wholesale or retail
28    sale or lease, whether that sale or lease is made directly by
29    the  manufacturer  or  by  some  other  person,  whether  the
30    materials  used  in the process are owned by the manufacturer
31    or some other person, or whether that sale or lease  is  made
32    apart  from or as an incident to the seller's engaging in the
33    service occupation of producing machines, tools, dies,  jigs,
34    patterns,  gauges,  or  other  similar items of no commercial
 
                            -6-      LRB093 13105 SJM 18355 b
 1    value on special order for a particular purchaser.
 2        (19)  Personal  property  delivered  to  a  purchaser  or
 3    purchaser's donee inside Illinois when the purchase order for
 4    that personal property was  received  by  a  florist  located
 5    outside  Illinois  who  has a florist located inside Illinois
 6    deliver the personal property.
 7        (20)  Semen used for artificial insemination of livestock
 8    for direct agricultural production.
 9        (21)  Horses, or interests in horses, registered with and
10    meeting the requirements of any of  the  Arabian  Horse  Club
11    Registry  of  America, Appaloosa Horse Club, American Quarter
12    Horse Association, United  States  Trotting  Association,  or
13    Jockey Club, as appropriate, used for purposes of breeding or
14    racing for prizes.
15        (22)  Computers and communications equipment utilized for
16    any  hospital  purpose  and  equipment used in the diagnosis,
17    analysis, or treatment of hospital patients  purchased  by  a
18    lessor who leases the equipment, under a lease of one year or
19    longer  executed  or  in  effect at the time the lessor would
20    otherwise be subject to the tax imposed by  this  Act,  to  a
21    hospital    that  has  been  issued  an  active tax exemption
22    identification number by the Department under Section  1g  of
23    the  Retailers'  Occupation  Tax  Act.   If  the equipment is
24    leased in a manner that does not qualify for  this  exemption
25    or  is  used in any other non-exempt manner, the lessor shall
26    be liable for the tax imposed under this Act or  the  Service
27    Use  Tax  Act,  as  the case may be, based on the fair market
28    value of the property at  the  time  the  non-qualifying  use
29    occurs.   No  lessor  shall  collect or attempt to collect an
30    amount (however designated) that purports to  reimburse  that
31    lessor for the tax imposed by this Act or the Service Use Tax
32    Act,  as the case may be, if the tax has not been paid by the
33    lessor.  If a lessor improperly collects any such amount from
34    the lessee, the lessee shall have a legal right  to  claim  a
 
                            -7-      LRB093 13105 SJM 18355 b
 1    refund  of  that  amount  from the lessor.  If, however, that
 2    amount is not refunded to the  lessee  for  any  reason,  the
 3    lessor is liable to pay that amount to the Department.
 4        (23)  Personal  property purchased by a lessor who leases
 5    the property, under a lease of  one year or  longer  executed
 6    or  in  effect  at  the  time  the  lessor would otherwise be
 7    subject to the tax imposed by this  Act,  to  a  governmental
 8    body  that  has  been  issued  an  active sales tax exemption
 9    identification number by the Department under Section  1g  of
10    the  Retailers' Occupation Tax Act. If the property is leased
11    in a manner that does not qualify for this exemption or  used
12    in  any  other  non-exempt manner, the lessor shall be liable
13    for the tax imposed under this Act or  the  Service  Use  Tax
14    Act,  as  the  case may be, based on the fair market value of
15    the property at the time the non-qualifying use  occurs.   No
16    lessor shall collect or attempt to collect an amount (however
17    designated)  that  purports  to reimburse that lessor for the
18    tax imposed by this Act or the Service Use Tax  Act,  as  the
19    case  may be, if the tax has not been paid by the lessor.  If
20    a lessor improperly collects any such amount from the lessee,
21    the lessee shall have a legal right to claim a refund of that
22    amount from the lessor.  If,  however,  that  amount  is  not
23    refunded  to  the lessee for any reason, the lessor is liable
24    to pay that amount to the Department.
25        (24)  Beginning with taxable years  ending  on  or  after
26    December  31, 1995 and ending with taxable years ending on or
27    before December 31, 2004, personal property that  is  donated
28    for  disaster  relief  to  be  used  in  a State or federally
29    declared disaster area in Illinois or bordering Illinois by a
30    manufacturer or retailer that is registered in this State  to
31    a   corporation,   society,   association,   foundation,   or
32    institution  that  has  been  issued  a  sales  tax exemption
33    identification number by the Department that assists  victims
34    of the disaster who reside within the declared disaster area.
 
                            -8-      LRB093 13105 SJM 18355 b
 1        (25)  Beginning  with  taxable  years  ending on or after
 2    December 31, 1995 and ending with taxable years ending on  or
 3    before  December  31, 2004, personal property that is used in
 4    the performance of  infrastructure  repairs  in  this  State,
 5    including  but  not  limited  to municipal roads and streets,
 6    access roads, bridges,  sidewalks,  waste  disposal  systems,
 7    water  and  sewer  line  extensions,  water  distribution and
 8    purification facilities, storm water drainage  and  retention
 9    facilities, and sewage treatment facilities, resulting from a
10    State or federally declared disaster in Illinois or bordering
11    Illinois  when  such  repairs  are  initiated  on  facilities
12    located  in  the declared disaster area within 6 months after
13    the disaster.
14        (26)  Beginning  July  1,  1999,  game  or   game   birds
15    purchased  at  a "game breeding and hunting preserve area" or
16    an "exotic game hunting area" as those terms are used in  the
17    Wildlife  Code  or  at  a  hunting enclosure approved through
18    rules adopted by the Department of Natural  Resources.   This
19    paragraph is exempt from the provisions of Section 3-90.
20        (27)  A motor vehicle, as that term is defined in Section
21    1-146  of  the  Illinois  Vehicle  Code, that is donated to a
22    corporation, limited liability company, society, association,
23    foundation,  or  institution  that  is  determined   by   the
24    Department  to  be  organized  and  operated  exclusively for
25    educational purposes.  For purposes  of  this  exemption,  "a
26    corporation, limited liability company, society, association,
27    foundation, or institution organized and operated exclusively
28    for  educational  purposes"  means  all  tax-supported public
29    schools, private schools that offer systematic instruction in
30    useful branches of  learning  by  methods  common  to  public
31    schools  and  that  compare  favorably  in  their  scope  and
32    intensity with the course of study presented in tax-supported
33    schools,  and  vocational  or technical schools or institutes
34    organized and operated exclusively to  provide  a  course  of
 
                            -9-      LRB093 13105 SJM 18355 b
 1    study  of  not  less  than  6  weeks duration and designed to
 2    prepare individuals to follow a trade or to pursue a  manual,
 3    technical,  mechanical,  industrial,  business, or commercial
 4    occupation.
 5        (28)  Beginning  January  1,  2000,   personal  property,
 6    including food, purchased through fundraising events for  the
 7    benefit  of  a  public  or  private  elementary  or secondary
 8    school, a group of those  schools,  or  one  or  more  school
 9    districts if the events are sponsored by an entity recognized
10    by  the school district that consists primarily of volunteers
11    and includes parents and teachers  of  the  school  children.
12    This  paragraph  does not apply to fundraising events (i) for
13    the benefit of private home instruction or (ii) for which the
14    fundraising entity purchases the personal  property  sold  at
15    the  events  from  another individual or entity that sold the
16    property for the purpose of resale by the fundraising  entity
17    and  that  profits  from  the sale to the fundraising entity.
18    This paragraph is exempt from the provisions of Section 3-90.
19        (29)  Beginning January 1, 2000 and through December  31,
20    2001, new or used automatic vending machines that prepare and
21    serve  hot  food  and  beverages, including coffee, soup, and
22    other  items,  and  replacement  parts  for  these  machines.
23    Beginning January 1, 2002 and through June 30, 2003, machines
24    and parts for  machines  used  in  commercial,  coin-operated
25    amusement  and vending business if a use or occupation tax is
26    paid on the gross  receipts  derived  from  the  use  of  the
27    commercial,  coin-operated  amusement  and  vending machines.
28    This paragraph is exempt from the provisions of Section 3-90.
29        (30)  Food for human consumption that is to  be  consumed
30    off  the  premises  where  it  is  sold (other than alcoholic
31    beverages, soft drinks, and food that has been  prepared  for
32    immediate  consumption)  and prescription and nonprescription
33    medicines, drugs,  medical  appliances,  and  insulin,  urine
34    testing  materials,  syringes, and needles used by diabetics,
 
                            -10-     LRB093 13105 SJM 18355 b
 1    for human use, when purchased for use by a  person  receiving
 2    medical assistance under Article 5 of the Illinois Public Aid
 3    Code  who  resides  in a licensed long-term care facility, as
 4    defined in the Nursing Home Care Act.
 5        (31)  Beginning on the effective date of this  amendatory
 6    Act   of   the   92nd   General   Assembly,   computers   and
 7    communications  equipment  utilized  for any hospital purpose
 8    and equipment used in the diagnosis, analysis,  or  treatment
 9    of  hospital  patients  purchased  by a lessor who leases the
10    equipment, under a lease of one year or longer executed or in
11    effect at the time the lessor would otherwise be  subject  to
12    the  tax  imposed  by  this  Act, to a hospital that has been
13    issued an active tax exemption identification number  by  the
14    Department  under Section 1g of the Retailers' Occupation Tax
15    Act.  If the equipment is leased in a manner  that  does  not
16    qualify  for this exemption or is used in any other nonexempt
17    manner, the lessor shall be liable for the tax imposed  under
18    this  Act  or  the  Service  Use Tax Act, as the case may be,
19    based on the fair market value of the property  at  the  time
20    the  nonqualifying  use  occurs.   No lessor shall collect or
21    attempt  to  collect  an  amount  (however  designated)  that
22    purports to reimburse that lessor for the tax imposed by this
23    Act or the Service Use Tax Act, as the case may  be,  if  the
24    tax  has not been paid by the lessor.  If a lessor improperly
25    collects any such amount from the lessee,  the  lessee  shall
26    have  a legal right to claim a refund of that amount from the
27    lessor.  If, however, that amount  is  not  refunded  to  the
28    lessee  for  any  reason,  the  lessor  is liable to pay that
29    amount to the Department. This paragraph is exempt  from  the
30    provisions of Section 3-90.
31        (32)  Beginning  on the effective date of this amendatory
32    Act of the 92nd General Assembly, personal property purchased
33    by a lessor who leases the property, under  a  lease  of  one
34    year  or  longer executed or in effect at the time the lessor
 
                            -11-     LRB093 13105 SJM 18355 b
 1    would otherwise be subject to the tax imposed by this Act, to
 2    a governmental body that has been issued an active sales  tax
 3    exemption  identification  number  by  the  Department  under
 4    Section  1g  of  the  Retailers'  Occupation Tax Act.  If the
 5    property is leased in a manner that does not qualify for this
 6    exemption or used in any other nonexempt manner,  the  lessor
 7    shall  be  liable  for  the tax imposed under this Act or the
 8    Service Use Tax Act, as the case may be, based  on  the  fair
 9    market  value  of  the property at the time the nonqualifying
10    use occurs.  No lessor shall collect or attempt to collect an
11    amount (however designated) that purports to  reimburse  that
12    lessor for the tax imposed by this Act or the Service Use Tax
13    Act,  as the case may be, if the tax has not been paid by the
14    lessor.  If a lessor improperly collects any such amount from
15    the lessee, the lessee shall have a legal right  to  claim  a
16    refund  of  that  amount  from the lessor.  If, however, that
17    amount is not refunded to the  lessee  for  any  reason,  the
18    lessor  is liable to pay that amount to the Department.  This
19    paragraph is exempt from the provisions of Section 3-90.
20        (33)  On and after July 1, 2003, the use in this State of
21    motor vehicles of the second division with  a  gross  vehicle
22    weight  in excess of 8,000 pounds and that are subject to the
23    commercial distribution fee imposed under Section 3-815.1  of
24    the  Illinois  Vehicle Code. This exemption applies to repair
25    and replacement parts added after  the  initial  purchase  of
26    such  a  motor  vehicle  if  that  motor vehicle is used in a
27    manner that would qualify for  the  rolling  stock  exemption
28    otherwise provided for in this Act.
29        (34)  Beginning  on  January  1,  2005, tangible personal
30    property purchased by a not-for-profit corporation  organized
31    under  the General Not For Profit Corporation Act of 1986 for
32    the purpose  of  ownership  and  operation  of  water  supply
33    facilities  for drinking and general domestic use on a mutual
34    or cooperative basis as provided in  subdivision  (a)(23)  of
 
                            -12-     LRB093 13105 SJM 18355 b
 1    Section  103.05 of the General Not For Profit Corporation Act
 2    of 1986. This paragraph is  exempt  from  the  provisions  of
 3    Section 3-90.
 4    (Source:  P.A.  92-35,  eff.  7-1-01;  92-227,  eff.  8-2-01;
 5    92-337,  eff.  8-10-01;  92-484,  eff.  8-23-01; 92-651, eff.
 6    7-11-02; 93-23, eff. 6-20-03; 93-24,  eff.  6-20-03;  revised
 7    9-11-03.)

 8        Section   10.   The  Service  Use  Tax  Act is amended by
 9    changing Section 3-5 as follows:

10        (35 ILCS 110/3-5) (from Ch. 120, par. 439.33-5)
11        Sec. 3-5.  Exemptions.  Use  of  the  following  tangible
12    personal property is exempt from the tax imposed by this Act:
13        (1)  Personal  property  purchased  from  a  corporation,
14    society,    association,    foundation,    institution,    or
15    organization, other than a limited liability company, that is
16    organized and operated as a not-for-profit service enterprise
17    for  the  benefit  of persons 65 years of age or older if the
18    personal property was not purchased by the enterprise for the
19    purpose of resale by the enterprise.
20        (2)  Personal property purchased by a non-profit Illinois
21    county fair association for use in conducting, operating,  or
22    promoting the county fair.
23        (3)  Personal property purchased by a not-for-profit arts
24    or  cultural organization that establishes, by proof required
25    by the Department by rule, that it has received an  exemption
26    under Section 501(c)(3) of the Internal Revenue Code and that
27    is  organized  and operated primarily for the presentation or
28    support of  arts  or  cultural  programming,  activities,  or
29    services.   These  organizations include, but are not limited
30    to, music and dramatic arts organizations  such  as  symphony
31    orchestras  and  theatrical groups, arts and cultural service
32    organizations,   local    arts    councils,    visual    arts
 
                            -13-     LRB093 13105 SJM 18355 b
 1    organizations, and media arts organizations. On and after the
 2    effective  date  of  this  amendatory Act of the 92nd General
 3    Assembly, however, an  entity  otherwise  eligible  for  this
 4    exemption  shall not make tax-free purchases unless it has an
 5    active identification number issued by the Department.
 6        (4)  Legal  tender,  currency,  medallions,  or  gold  or
 7    silver  coinage  issued  by  the  State  of   Illinois,   the
 8    government of the United States of America, or the government
 9    of any foreign country, and bullion.
10        (5)  Until  July  1,  2003,  graphic  arts  machinery and
11    equipment, including repair and replacement parts,  both  new
12    and used, and including that manufactured on special order or
13    purchased  for  lease,  certified by the purchaser to be used
14    primarily for graphic  arts  production.  Equipment  includes
15    chemicals  or  chemicals  acting as catalysts but only if the
16    chemicals or chemicals acting as catalysts  effect  a  direct
17    and immediate change upon a graphic arts product.
18        (6)  Personal property purchased from a teacher-sponsored
19    student   organization   affiliated  with  an  elementary  or
20    secondary school located in Illinois.
21        (7)  Farm machinery and equipment,  both  new  and  used,
22    including  that  manufactured  on special order, certified by
23    the purchaser to be used primarily for production agriculture
24    or  State  or  federal   agricultural   programs,   including
25    individual replacement parts for the machinery and equipment,
26    including  machinery  and  equipment purchased for lease, and
27    including implements of husbandry defined in Section 1-130 of
28    the Illinois Vehicle Code, farm  machinery  and  agricultural
29    chemical  and fertilizer spreaders, and nurse wagons required
30    to be registered under Section 3-809 of the Illinois  Vehicle
31    Code,  but  excluding  other  motor  vehicles  required to be
32    registered under the  Illinois  Vehicle  Code.  Horticultural
33    polyhouses  or  hoop houses used for propagating, growing, or
34    overwintering plants shall be considered farm  machinery  and
 
                            -14-     LRB093 13105 SJM 18355 b
 1    equipment  under  this item (7). Agricultural chemical tender
 2    tanks and dry boxes shall include units sold separately  from
 3    a  motor  vehicle  required  to  be  licensed  and units sold
 4    mounted on a motor vehicle required to  be  licensed  if  the
 5    selling price of the tender is separately stated.
 6        Farm  machinery  and  equipment  shall  include precision
 7    farming equipment  that  is  installed  or  purchased  to  be
 8    installed  on farm machinery and equipment including, but not
 9    limited  to,  tractors,   harvesters,   sprayers,   planters,
10    seeders,  or spreaders. Precision farming equipment includes,
11    but is not  limited  to,  soil  testing  sensors,  computers,
12    monitors,  software,  global positioning and mapping systems,
13    and other such equipment.
14        Farm machinery and  equipment  also  includes  computers,
15    sensors,  software,  and  related equipment used primarily in
16    the computer-assisted  operation  of  production  agriculture
17    facilities,  equipment,  and  activities  such  as,  but  not
18    limited  to,  the  collection, monitoring, and correlation of
19    animal and crop data for the purpose  of  formulating  animal
20    diets  and  agricultural  chemicals.  This item (7) is exempt
21    from the provisions of Section 3-75.
22        (8)  Fuel and petroleum products sold to or  used  by  an
23    air  common  carrier, certified by the carrier to be used for
24    consumption, shipment, or  storage  in  the  conduct  of  its
25    business  as an air common carrier, for a flight destined for
26    or returning from a location or locations outside the  United
27    States  without  regard  to  previous  or subsequent domestic
28    stopovers.
29        (9)  Proceeds of  mandatory  service  charges  separately
30    stated  on  customers' bills for the purchase and consumption
31    of food and beverages acquired as an incident to the purchase
32    of a service from  a  serviceman,  to  the  extent  that  the
33    proceeds  of  the  service  charge are in fact turned over as
34    tips or as  a  substitute  for  tips  to  the  employees  who
 
                            -15-     LRB093 13105 SJM 18355 b
 1    participate   directly  in  preparing,  serving,  hosting  or
 2    cleaning up the food or beverage  function  with  respect  to
 3    which the service charge is imposed.
 4        (10)  Until   July   1,   2003,  oil  field  exploration,
 5    drilling, and production equipment, including  (i)  rigs  and
 6    parts  of  rigs,  rotary  rigs, cable tool rigs, and workover
 7    rigs, (ii) pipe and tubular goods, including casing and drill
 8    strings, (iii) pumps and pump-jack units, (iv) storage  tanks
 9    and  flow  lines, (v) any individual replacement part for oil
10    field exploration, drilling, and  production  equipment,  and
11    (vi)   machinery  and  equipment  purchased  for  lease;  but
12    excluding motor vehicles required to be registered under  the
13    Illinois Vehicle Code.
14        (11)  Proceeds from the sale of photoprocessing machinery
15    and  equipment,  including repair and replacement parts, both
16    new and used, including that manufactured on  special  order,
17    certified   by   the  purchaser  to  be  used  primarily  for
18    photoprocessing, and including photoprocessing machinery  and
19    equipment purchased for lease.
20        (12)  Until  July  1,  2003,  coal  exploration,  mining,
21    offhighway  hauling, processing, maintenance, and reclamation
22    equipment, including replacement  parts  and  equipment,  and
23    including  equipment purchased for lease, but excluding motor
24    vehicles required to be registered under the Illinois Vehicle
25    Code.
26        (13)  Semen used for artificial insemination of livestock
27    for direct agricultural production.
28        (14)  Horses, or interests in horses, registered with and
29    meeting the requirements of any of  the  Arabian  Horse  Club
30    Registry  of  America, Appaloosa Horse Club, American Quarter
31    Horse Association, United  States  Trotting  Association,  or
32    Jockey Club, as appropriate, used for purposes of breeding or
33    racing for prizes.
34        (15)  Computers and communications equipment utilized for
 
                            -16-     LRB093 13105 SJM 18355 b
 1    any  hospital  purpose  and  equipment used in the diagnosis,
 2    analysis, or treatment of hospital patients  purchased  by  a
 3    lessor who leases the equipment, under a lease of one year or
 4    longer  executed  or  in  effect at the time the lessor would
 5    otherwise be subject to the tax imposed by  this  Act,  to  a
 6    hospital  that  has  been  issued  an  active  tax  exemption
 7    identification  number  by the Department under Section 1g of
 8    the Retailers' Occupation Tax Act. If the equipment is leased
 9    in a manner that does not qualify for this  exemption  or  is
10    used  in  any  other  non-exempt  manner, the lessor shall be
11    liable for the tax imposed under this Act or the Use Tax Act,
12    as the case may be, based on the fair  market  value  of  the
13    property  at  the  time  the  non-qualifying  use occurs.  No
14    lessor shall collect or attempt to collect an amount (however
15    designated) that purports to reimburse that  lessor  for  the
16    tax  imposed  by this Act or the Use Tax Act, as the case may
17    be, if the tax has not been paid by the lessor.  If a  lessor
18    improperly  collects  any  such  amount  from the lessee, the
19    lessee shall have a legal right to claim  a  refund  of  that
20    amount  from  the  lessor.   If,  however, that amount is not
21    refunded to the lessee for any reason, the lessor  is  liable
22    to pay that amount to the Department.
23        (16)  Personal  property purchased by a lessor who leases
24    the property, under a lease of one year or longer executed or
25    in effect at the time the lessor would otherwise  be  subject
26    to  the  tax imposed by this Act, to a governmental body that
27    has been issued an active tax exemption identification number
28    by  the  Department  under  Section  1g  of  the   Retailers'
29    Occupation  Tax  Act.   If the property is leased in a manner
30    that does not qualify for this exemption or is  used  in  any
31    other  non-exempt  manner, the lessor shall be liable for the
32    tax imposed under this Act or the Use Tax Act,  as  the  case
33    may be, based on the fair market value of the property at the
34    time  the non-qualifying use occurs.  No lessor shall collect
 
                            -17-     LRB093 13105 SJM 18355 b
 1    or attempt to collect an  amount  (however  designated)  that
 2    purports to reimburse that lessor for the tax imposed by this
 3    Act  or  the  Use Tax Act, as the case may be, if the tax has
 4    not been paid by the lessor.  If a lessor improperly collects
 5    any such amount from the lessee,  the  lessee  shall  have  a
 6    legal right to claim a refund of that amount from the lessor.
 7    If,  however,  that  amount is not refunded to the lessee for
 8    any reason, the lessor is liable to pay that  amount  to  the
 9    Department.
10        (17)  Beginning  with  taxable  years  ending on or after
11    December 31, 1995 and ending with taxable years ending on  or
12    before  December  31, 2004, personal property that is donated
13    for disaster relief to  be  used  in  a  State  or  federally
14    declared disaster area in Illinois or bordering Illinois by a
15    manufacturer  or retailer that is registered in this State to
16    a   corporation,   society,   association,   foundation,   or
17    institution that  has  been  issued  a  sales  tax  exemption
18    identification  number by the Department that assists victims
19    of the disaster who reside within the declared disaster area.
20        (18)  Beginning with taxable years  ending  on  or  after
21    December  31, 1995 and ending with taxable years ending on or
22    before December 31, 2004, personal property that is  used  in
23    the  performance  of  infrastructure  repairs  in this State,
24    including but not limited to  municipal  roads  and  streets,
25    access  roads,  bridges,  sidewalks,  waste disposal systems,
26    water and  sewer  line  extensions,  water  distribution  and
27    purification  facilities,  storm water drainage and retention
28    facilities, and sewage treatment facilities, resulting from a
29    State or federally declared disaster in Illinois or bordering
30    Illinois  when  such  repairs  are  initiated  on  facilities
31    located in the declared disaster area within 6  months  after
32    the disaster.
33        (19)  Beginning   July   1,  1999,  game  or  game  birds
34    purchased at a "game breeding and hunting preserve  area"  or
 
                            -18-     LRB093 13105 SJM 18355 b
 1    an  "exotic game hunting area" as those terms are used in the
 2    Wildlife Code or at  a  hunting  enclosure  approved  through
 3    rules  adopted  by the Department of Natural Resources.  This
 4    paragraph is exempt from the provisions of Section 3-75.
 5        (20)  A motor vehicle, as that term is defined in Section
 6    1-146 of the Illinois Vehicle Code,  that  is  donated  to  a
 7    corporation, limited liability company, society, association,
 8    foundation,   or   institution  that  is  determined  by  the
 9    Department to  be  organized  and  operated  exclusively  for
10    educational  purposes.   For  purposes  of this exemption, "a
11    corporation, limited liability company, society, association,
12    foundation, or institution organized and operated exclusively
13    for educational  purposes"  means  all  tax-supported  public
14    schools, private schools that offer systematic instruction in
15    useful  branches  of  learning  by  methods  common to public
16    schools  and  that  compare  favorably  in  their  scope  and
17    intensity with the course of study presented in tax-supported
18    schools, and vocational or technical  schools  or  institutes
19    organized  and  operated  exclusively  to provide a course of
20    study of not less than  6  weeks  duration  and  designed  to
21    prepare  individuals to follow a trade or to pursue a manual,
22    technical, mechanical, industrial,  business,  or  commercial
23    occupation.
24        (21)  Beginning  January  1,  2000,   personal  property,
25    including  food, purchased through fundraising events for the
26    benefit of  a  public  or  private  elementary  or  secondary
27    school,  a  group  of  those  schools,  or one or more school
28    districts if the events are sponsored by an entity recognized
29    by the school district that consists primarily of  volunteers
30    and  includes  parents  and  teachers of the school children.
31    This paragraph does not apply to fundraising events  (i)  for
32    the benefit of private home instruction or (ii) for which the
33    fundraising  entity  purchases  the personal property sold at
34    the events from another individual or entity  that  sold  the
 
                            -19-     LRB093 13105 SJM 18355 b
 1    property  for the purpose of resale by the fundraising entity
 2    and that profits from the sale  to  the  fundraising  entity.
 3    This paragraph is exempt from the provisions of Section 3-75.
 4        (22)  Beginning  January 1, 2000 and through December 31,
 5    2001, new or used automatic vending machines that prepare and
 6    serve hot food and beverages,  including  coffee,  soup,  and
 7    other  items,  and  replacement  parts  for  these  machines.
 8    Beginning January 1, 2002 and through June 30, 2003, machines
 9    and  parts  for  machines  used  in commercial, coin-operated
10    amusement and vending business if a use or occupation tax  is
11    paid  on  the  gross  receipts  derived  from  the use of the
12    commercial, coin-operated  amusement  and  vending  machines.
13    This paragraph is exempt from the provisions of Section 3-75.
14        (23)  Food  for  human consumption that is to be consumed
15    off the premises where  it  is  sold  (other  than  alcoholic
16    beverages,  soft  drinks, and food that has been prepared for
17    immediate consumption) and prescription  and  nonprescription
18    medicines,  drugs,  medical  appliances,  and  insulin, urine
19    testing materials, syringes, and needles used  by  diabetics,
20    for  human  use, when purchased for use by a person receiving
21    medical assistance under Article 5 of the Illinois Public Aid
22    Code who resides in a licensed long-term  care  facility,  as
23    defined in the Nursing Home Care Act.
24        (24)    Beginning   on   the   effective   date  of  this
25    amendatory Act of the 92nd General  Assembly,  computers  and
26    communications  equipment  utilized  for any hospital purpose
27    and equipment used in the diagnosis, analysis,  or  treatment
28    of  hospital  patients  purchased  by a lessor who leases the
29    equipment, under a lease of one year or longer executed or in
30    effect at the time the lessor would otherwise be  subject  to
31    the  tax  imposed  by  this  Act, to a hospital that has been
32    issued an active tax exemption identification number  by  the
33    Department  under Section 1g of the Retailers' Occupation Tax
34    Act.  If the equipment is leased in a manner  that  does  not
 
                            -20-     LRB093 13105 SJM 18355 b
 1    qualify  for this exemption or is used in any other nonexempt
 2    manner, the lessor shall be liable for the tax imposed  under
 3    this Act or the Use Tax Act, as the case may be, based on the
 4    fair   market   value   of  the  property  at  the  time  the
 5    nonqualifying use occurs. No lessor shall collect or  attempt
 6    to  collect  an  amount (however designated) that purports to
 7    reimburse that lessor for the tax imposed by this Act or  the
 8    Use Tax Act, as the case may be, if the tax has not been paid
 9    by  the  lessor.   If  a  lessor improperly collects any such
10    amount from the lessee, the lessee shall have a  legal  right
11    to  claim  a  refund  of  that  amount  from the lessor.  If,
12    however, that amount is not refunded to the  lessee  for  any
13    reason,  the  lessor  is  liable  to  pay  that amount to the
14    Department. This paragraph is exempt from the  provisions  of
15    Section 3-75.
16        (25)  Beginning  on the effective date of this amendatory
17    Act of the 92nd General Assembly, personal property purchased
18    by a lessor who leases the property, under  a  lease  of  one
19    year  or  longer executed or in effect at the time the lessor
20    would otherwise be subject to the tax imposed by this Act, to
21    a governmental body  that  has  been  issued  an  active  tax
22    exemption  identification  number  by  the  Department  under
23    Section  1g  of  the  Retailers'  Occupation Tax Act.  If the
24    property is leased in a manner that does not qualify for this
25    exemption or is used  in  any  other  nonexempt  manner,  the
26    lessor  shall be liable for the tax imposed under this Act or
27    the Use Tax Act, as the case may be, based on the fair market
28    value of the property  at  the  time  the  nonqualifying  use
29    occurs.   No  lessor  shall  collect or attempt to collect an
30    amount (however designated) that purports to  reimburse  that
31    lessor for the tax imposed by this Act or the Use Tax Act, as
32    the  case may be, if the tax has not been paid by the lessor.
33    If a lessor improperly collects  any  such  amount  from  the
34    lessee, the lessee shall have a legal right to claim a refund
 
                            -21-     LRB093 13105 SJM 18355 b
 1    of  that amount from the lessor.  If, however, that amount is
 2    not refunded to the lessee for  any  reason,  the  lessor  is
 3    liable  to  pay that amount to the Department. This paragraph
 4    is exempt from the provisions of Section 3-75.
 5        (26) Beginning on  January  1,  2005,  tangible  personal
 6    property  purchased by a not-for-profit corporation organized
 7    under the General Not For Profit Corporation Act of 1986  for
 8    the  purpose  of  ownership  and  operation  of  water supply
 9    facilities for drinking and general domestic use on a  mutual
10    or  cooperative  basis  as provided in subdivision (a)(23) of
11    Section 103.05 of the General Not For Profit Corporation  Act
12    of  1986.  This  paragraph  is  exempt from the provisions of
13    Section 3-75.
14    (Source:  P.A.  92-16,  eff.  6-28-01;  92-35,  eff.  e-1-01;
15    92-227, eff.  8-2-01;  92-337,  eff.  8-10-01;  92-484,  eff.
16    8-23-01; 92-651, eff. 7-11-02; 93-24, eff. 6-20-03.)

17        Section   15.   The Service Occupation Tax Act is amended
18    by changing Section 3-5 as follows:

19        (35 ILCS 115/3-5) (from Ch. 120, par. 439.103-5)
20        Sec. 3-5.  Exemptions.  The following  tangible  personal
21    property is exempt from the tax imposed by this Act:
22        (1)  Personal  property  sold  by a corporation, society,
23    association, foundation, institution, or organization,  other
24    than  a  limited  liability  company,  that  is organized and
25    operated as  a  not-for-profit  service  enterprise  for  the
26    benefit  of  persons 65 years of age or older if the personal
27    property was not purchased by the enterprise for the  purpose
28    of resale by the enterprise.
29        (2)  Personal  property  purchased  by  a  not-for-profit
30    Illinois  county  fair  association  for  use  in conducting,
31    operating, or promoting the county fair.
32        (3)  Personal property purchased  by  any  not-for-profit
 
                            -22-     LRB093 13105 SJM 18355 b
 1    arts  or  cultural  organization  that  establishes, by proof
 2    required by the Department by rule, that it has  received  an
 3    exemption   under  Section  501(c)(3) of the Internal Revenue
 4    Code and that is organized and  operated  primarily  for  the
 5    presentation  or  support  of  arts  or cultural programming,
 6    activities, or services.  These  organizations  include,  but
 7    are  not  limited  to,  music and dramatic arts organizations
 8    such as symphony orchestras and theatrical groups,  arts  and
 9    cultural  service  organizations, local arts councils, visual
10    arts organizations, and  media  arts  organizations.  On  and
11    after  the  effective date of this amendatory Act of the 92nd
12    General Assembly, however, an entity otherwise  eligible  for
13    this  exemption  shall  not make tax-free purchases unless it
14    has an active identification number issued by the Department.
15        (4)  Legal  tender,  currency,  medallions,  or  gold  or
16    silver  coinage  issued  by  the  State  of   Illinois,   the
17    government of the United States of America, or the government
18    of any foreign country, and bullion.
19        (5)  Until  July  1,  2003,  graphic  arts  machinery and
20    equipment, including repair and replacement parts,  both  new
21    and used, and including that manufactured on special order or
22    purchased  for  lease,  certified by the purchaser to be used
23    primarily for graphic  arts  production.  Equipment  includes
24    chemicals  or  chemicals  acting as catalysts but only if the
25    chemicals or chemicals acting as catalysts  effect  a  direct
26    and immediate change upon a graphic arts product.
27        (6)  Personal   property   sold  by  a  teacher-sponsored
28    student  organization  affiliated  with  an   elementary   or
29    secondary school located in Illinois.
30        (7)  Farm  machinery  and  equipment,  both new and used,
31    including that manufactured on special  order,  certified  by
32    the purchaser to be used primarily for production agriculture
33    or   State   or   federal  agricultural  programs,  including
34    individual replacement parts for the machinery and equipment,
 
                            -23-     LRB093 13105 SJM 18355 b
 1    including machinery and equipment purchased  for  lease,  and
 2    including implements of husbandry defined in Section 1-130 of
 3    the  Illinois  Vehicle  Code, farm machinery and agricultural
 4    chemical and fertilizer spreaders, and nurse wagons  required
 5    to  be registered under Section 3-809 of the Illinois Vehicle
 6    Code, but excluding  other  motor  vehicles  required  to  be
 7    registered  under  the  Illinois  Vehicle Code. Horticultural
 8    polyhouses or hoop houses used for propagating,  growing,  or
 9    overwintering  plants  shall be considered farm machinery and
10    equipment under this item (7). Agricultural  chemical  tender
11    tanks  and dry boxes shall include units sold separately from
12    a motor vehicle  required  to  be  licensed  and  units  sold
13    mounted  on  a  motor  vehicle required to be licensed if the
14    selling price of the tender is separately stated.
15        Farm machinery  and  equipment  shall  include  precision
16    farming  equipment  that  is  installed  or  purchased  to be
17    installed on farm machinery and equipment including, but  not
18    limited   to,   tractors,   harvesters,  sprayers,  planters,
19    seeders, or spreaders. Precision farming equipment  includes,
20    but  is  not  limited  to,  soil  testing sensors, computers,
21    monitors, software, global positioning and  mapping  systems,
22    and other such equipment.
23        Farm  machinery  and  equipment  also includes computers,
24    sensors, software, and related equipment  used  primarily  in
25    the  computer-assisted  operation  of  production agriculture
26    facilities,  equipment,  and  activities  such  as,  but  not
27    limited to, the collection, monitoring,  and  correlation  of
28    animal  and  crop  data for the purpose of formulating animal
29    diets and agricultural chemicals.  This item  (7)  is  exempt
30    from the provisions of Section 3-55.
31        (8)  Fuel  and  petroleum  products sold to or used by an
32    air common carrier, certified by the carrier to be  used  for
33    consumption,  shipment,  or  storage  in  the  conduct of its
34    business as an air common carrier, for a flight destined  for
 
                            -24-     LRB093 13105 SJM 18355 b
 1    or  returning from a location or locations outside the United
 2    States without regard  to  previous  or  subsequent  domestic
 3    stopovers.
 4        (9)  Proceeds  of  mandatory  service  charges separately
 5    stated on customers' bills for the purchase  and  consumption
 6    of food and beverages, to the extent that the proceeds of the
 7    service  charge  are  in  fact  turned  over  as tips or as a
 8    substitute for tips to the employees who participate directly
 9    in preparing, serving, hosting or cleaning  up  the  food  or
10    beverage function with respect to which the service charge is
11    imposed.
12        (10)  Until   July   1,   2003,  oil  field  exploration,
13    drilling, and production equipment, including  (i)  rigs  and
14    parts  of  rigs,  rotary  rigs, cable tool rigs, and workover
15    rigs, (ii) pipe and tubular goods, including casing and drill
16    strings, (iii) pumps and pump-jack units, (iv) storage  tanks
17    and  flow  lines, (v) any individual replacement part for oil
18    field exploration, drilling, and  production  equipment,  and
19    (vi)   machinery  and  equipment  purchased  for  lease;  but
20    excluding motor vehicles required to be registered under  the
21    Illinois Vehicle Code.
22        (11)  Photoprocessing  machinery and equipment, including
23    repair and replacement parts, both new  and  used,  including
24    that   manufactured   on  special  order,  certified  by  the
25    purchaser to  be  used  primarily  for  photoprocessing,  and
26    including  photoprocessing  machinery and equipment purchased
27    for lease.
28        (12)  Until  July  1,  2003,  coal  exploration,  mining,
29    offhighway hauling, processing, maintenance, and  reclamation
30    equipment,  including  replacement  parts  and equipment, and
31    including equipment purchased for lease, but excluding  motor
32    vehicles required to be registered under the Illinois Vehicle
33    Code.
34        (13)  Food  for  human consumption that is to be consumed
 
                            -25-     LRB093 13105 SJM 18355 b
 1    off the premises where  it  is  sold  (other  than  alcoholic
 2    beverages,  soft  drinks  and food that has been prepared for
 3    immediate consumption) and prescription and  non-prescription
 4    medicines,  drugs,  medical  appliances,  and  insulin, urine
 5    testing materials, syringes, and needles used  by  diabetics,
 6    for  human  use, when purchased for use by a person receiving
 7    medical assistance under Article 5 of the Illinois Public Aid
 8    Code who resides in a licensed long-term  care  facility,  as
 9    defined in the Nursing Home Care Act.
10        (14)  Semen used for artificial insemination of livestock
11    for direct agricultural production.
12        (15)  Horses, or interests in horses, registered with and
13    meeting  the  requirements  of  any of the Arabian Horse Club
14    Registry of America, Appaloosa Horse Club,  American  Quarter
15    Horse  Association,  United  States  Trotting Association, or
16    Jockey Club, as appropriate, used for purposes of breeding or
17    racing for prizes.
18        (16)  Computers and communications equipment utilized for
19    any hospital purpose and equipment  used  in  the  diagnosis,
20    analysis,  or treatment of hospital patients sold to a lessor
21    who leases the equipment, under a lease of one year or longer
22    executed or in effect at the  time  of  the  purchase,  to  a
23    hospital  that  has  been  issued  an  active  tax  exemption
24    identification  number  by the Department under Section 1g of
25    the Retailers' Occupation Tax Act.
26        (17)  Personal property sold to a lessor who  leases  the
27    property,  under a lease of one year or longer executed or in
28    effect at the time of the purchase, to  a  governmental  body
29    that  has  been issued an active tax exemption identification
30    number by the Department under Section 1g of  the  Retailers'
31    Occupation Tax Act.
32        (18)  Beginning  with  taxable  years  ending on or after
33    December 31, 1995 and ending with taxable years ending on  or
34    before  December  31, 2004, personal property that is donated
 
                            -26-     LRB093 13105 SJM 18355 b
 1    for disaster relief to  be  used  in  a  State  or  federally
 2    declared disaster area in Illinois or bordering Illinois by a
 3    manufacturer  or retailer that is registered in this State to
 4    a   corporation,   society,   association,   foundation,   or
 5    institution that  has  been  issued  a  sales  tax  exemption
 6    identification  number by the Department that assists victims
 7    of the disaster who reside within the declared disaster area.
 8        (19)  Beginning with taxable years  ending  on  or  after
 9    December  31, 1995 and ending with taxable years ending on or
10    before December 31, 2004, personal property that is  used  in
11    the  performance  of  infrastructure  repairs  in this State,
12    including but not limited to  municipal  roads  and  streets,
13    access  roads,  bridges,  sidewalks,  waste disposal systems,
14    water and  sewer  line  extensions,  water  distribution  and
15    purification  facilities,  storm water drainage and retention
16    facilities, and sewage treatment facilities, resulting from a
17    State or federally declared disaster in Illinois or bordering
18    Illinois  when  such  repairs  are  initiated  on  facilities
19    located in the declared disaster area within 6  months  after
20    the disaster.
21        (20)  Beginning  July 1, 1999, game or game birds sold at
22    a "game breeding and hunting preserve  area"  or  an  "exotic
23    game  hunting  area"  as those terms are used in the Wildlife
24    Code or at a hunting enclosure approved through rules adopted
25    by the Department of Natural Resources.   This  paragraph  is
26    exempt from the provisions of Section 3-55.
27        (21)  A motor vehicle, as that term is defined in Section
28    1-146  of  the  Illinois  Vehicle  Code, that is donated to a
29    corporation, limited liability company, society, association,
30    foundation,  or  institution  that  is  determined   by   the
31    Department  to  be  organized  and  operated  exclusively for
32    educational purposes.  For purposes  of  this  exemption,  "a
33    corporation, limited liability company, society, association,
34    foundation, or institution organized and operated exclusively
 
                            -27-     LRB093 13105 SJM 18355 b
 1    for  educational  purposes"  means  all  tax-supported public
 2    schools, private schools that offer systematic instruction in
 3    useful branches of  learning  by  methods  common  to  public
 4    schools  and  that  compare  favorably  in  their  scope  and
 5    intensity with the course of study presented in tax-supported
 6    schools,  and  vocational  or technical schools or institutes
 7    organized and operated exclusively to  provide  a  course  of
 8    study  of  not  less  than  6  weeks duration and designed to
 9    prepare individuals to follow a trade or to pursue a  manual,
10    technical,  mechanical,  industrial,  business, or commercial
11    occupation.
12        (22)  Beginning  January  1,  2000,   personal  property,
13    including food, purchased through fundraising events for  the
14    benefit  of  a  public  or  private  elementary  or secondary
15    school, a group of those  schools,  or  one  or  more  school
16    districts if the events are sponsored by an entity recognized
17    by  the school district that consists primarily of volunteers
18    and includes parents and teachers  of  the  school  children.
19    This  paragraph  does not apply to fundraising events (i) for
20    the benefit of private home instruction or (ii) for which the
21    fundraising entity purchases the personal  property  sold  at
22    the  events  from  another individual or entity that sold the
23    property for the purpose of resale by the fundraising  entity
24    and  that  profits  from  the sale to the fundraising entity.
25    This paragraph is exempt from the provisions of Section 3-55.
26        (23)  Beginning January 1, 2000 and through December  31,
27    2001, new or used automatic vending machines that prepare and
28    serve  hot  food  and  beverages, including coffee, soup, and
29    other  items,  and  replacement  parts  for  these  machines.
30    Beginning January 1, 2002 and through June 30, 2003, machines
31    and parts for  machines  used  in  commercial,  coin-operated
32    amusement  and vending business if a use or occupation tax is
33    paid on the gross  receipts  derived  from  the  use  of  the
34    commercial,  coin-operated  amusement  and  vending machines.
 
                            -28-     LRB093 13105 SJM 18355 b
 1    This paragraph is exempt from the provisions of Section 3-55.
 2        (24)  Beginning on the effective date of this  amendatory
 3    Act   of   the   92nd   General   Assembly,   computers   and
 4    communications  equipment  utilized  for any hospital purpose
 5    and equipment used in the diagnosis, analysis,  or  treatment
 6    of  hospital  patients  sold  to  a  lessor  who  leases  the
 7    equipment, under a lease of one year or longer executed or in
 8    effect  at  the  time of the purchase, to a hospital that has
 9    been issued an active tax exemption identification number  by
10    the  Department under Section 1g of the Retailers' Occupation
11    Tax Act.  This paragraph is exempt  from  the  provisions  of
12    Section 3-55.
13        (25)  Beginning  on the effective date of this amendatory
14    Act of the 92nd General Assembly, personal property sold to a
15    lessor who leases the property, under a lease of one year  or
16    longer  executed or in effect at the time of the purchase, to
17    a governmental body  that  has  been  issued  an  active  tax
18    exemption  identification  number  by  the  Department  under
19    Section  1g  of  the  Retailers'  Occupation  Tax  Act.  This
20    paragraph is exempt from the provisions of Section 3-55.
21        (26)  Beginning on January  1,  2002,  tangible  personal
22    property  purchased  from  an Illinois retailer by a taxpayer
23    engaged in centralized purchasing activities in Illinois  who
24    will,  upon  receipt of the property in Illinois, temporarily
25    store the  property  in  Illinois  (i)  for  the  purpose  of
26    subsequently  transporting  it  outside this State for use or
27    consumption thereafter solely outside this State or (ii)  for
28    the  purpose  of being processed, fabricated, or manufactured
29    into,  attached  to,  or  incorporated  into  other  tangible
30    personal property to be transported outside  this  State  and
31    thereafter  used  or consumed solely outside this State.  The
32    Director of Revenue  shall,  pursuant  to  rules  adopted  in
33    accordance  with  the  Illinois Administrative Procedure Act,
34    issue a permit to any taxpayer  in  good  standing  with  the
 
                            -29-     LRB093 13105 SJM 18355 b
 1    Department  who  is  eligible  for  the  exemption under this
 2    paragraph (26).  The permit issued under this paragraph  (26)
 3    shall  authorize  the holder, to the extent and in the manner
 4    specified in the rules adopted under this  Act,  to  purchase
 5    tangible  personal  property  from a retailer exempt from the
 6    taxes imposed by this  Act.   Taxpayers  shall  maintain  all
 7    necessary  books  and  records  to  substantiate  the use and
 8    consumption of all such tangible personal property outside of
 9    the State of Illinois.
10        (27) Beginning on  January  1,  2005,  tangible  personal
11    property  purchased by a not-for-profit corporation organized
12    under the General Not For Profit Corporation Act of 1986  for
13    the  purpose  of  ownership  and  operation  of  water supply
14    facilities for drinking and general domestic use on a  mutual
15    or  cooperative  basis  as provided in subdivision (a)(23) of
16    Section 103.05 of the General Not For Profit Corporation  Act
17    of  1986.  This  paragraph  is  exempt from the provisions of
18    Section 3-55.
19    (Source: P.A.  92-16,  eff.  6-28-01;  92-35,  eff.   7-1-01;
20    92-227,  eff.  8-2-01;  92-337,  eff.  8-10-01;  92-484, eff.
21    8-23-01; 92-488, eff. 8-23-01; 92-651, eff.  7-11-02;  93-24,
22    eff. 6-20-03.)

23        Section 20.  The Retailers' Occupation Tax Act is amended
24    by changing Section 2-5 as follows:

25        (35 ILCS 120/2-5) (from Ch. 120, par. 441-5)
26        Sec. 2-5.  Exemptions.  Gross receipts from proceeds from
27    the  sale  of  the  following  tangible personal property are
28    exempt from the tax imposed by this Act:
29        (1)  Farm chemicals.
30        (2)  Farm machinery and equipment,  both  new  and  used,
31    including  that  manufactured  on special order, certified by
32    the purchaser to be used primarily for production agriculture
 
                            -30-     LRB093 13105 SJM 18355 b
 1    or  State  or  federal   agricultural   programs,   including
 2    individual replacement parts for the machinery and equipment,
 3    including  machinery  and  equipment purchased for lease, and
 4    including implements of husbandry defined in Section 1-130 of
 5    the Illinois Vehicle Code, farm  machinery  and  agricultural
 6    chemical  and fertilizer spreaders, and nurse wagons required
 7    to be registered under Section 3-809 of the Illinois  Vehicle
 8    Code,  but  excluding  other  motor  vehicles  required to be
 9    registered under the  Illinois  Vehicle  Code.  Horticultural
10    polyhouses  or  hoop houses used for propagating, growing, or
11    overwintering plants shall be considered farm  machinery  and
12    equipment  under  this item (2). Agricultural chemical tender
13    tanks and dry boxes shall include units sold separately  from
14    a  motor  vehicle  required  to  be  licensed  and units sold
15    mounted on a motor vehicle required to be  licensed,  if  the
16    selling price of the tender is separately stated.
17        Farm  machinery  and  equipment  shall  include precision
18    farming equipment  that  is  installed  or  purchased  to  be
19    installed  on farm machinery and equipment including, but not
20    limited  to,  tractors,   harvesters,   sprayers,   planters,
21    seeders,  or spreaders. Precision farming equipment includes,
22    but is not  limited  to,  soil  testing  sensors,  computers,
23    monitors,  software,  global positioning and mapping systems,
24    and other such equipment.
25        Farm machinery and  equipment  also  includes  computers,
26    sensors,  software,  and  related equipment used primarily in
27    the computer-assisted  operation  of  production  agriculture
28    facilities,  equipment,  and  activities  such  as,  but  not
29    limited  to,  the  collection, monitoring, and correlation of
30    animal and crop data for the purpose  of  formulating  animal
31    diets  and  agricultural  chemicals.  This item (7) is exempt
32    from the provisions of Section 2-70.
33        (3)  Until  July  1,  2003,  distillation  machinery  and
34    equipment, sold as a unit or kit, assembled or  installed  by
 
                            -31-     LRB093 13105 SJM 18355 b
 1    the  retailer,  certified by the user to be used only for the
 2    production of ethyl alcohol that will be used for consumption
 3    as motor fuel or  as  a  component  of  motor  fuel  for  the
 4    personal use of the user, and not subject to sale or resale.
 5        (4)  Until  July  1,  2003,  graphic  arts  machinery and
 6    equipment, including repair and replacement parts,  both  new
 7    and used, and including that manufactured on special order or
 8    purchased  for  lease,  certified by the purchaser to be used
 9    primarily for graphic  arts  production.  Equipment  includes
10    chemicals  or  chemicals  acting as catalysts but only if the
11    chemicals or chemicals acting as catalysts  effect  a  direct
12    and immediate change upon a graphic arts product.
13        (5)  A  motor  vehicle  of  the  first  division, a motor
14    vehicle of the second division that is a self-contained motor
15    vehicle designed or permanently converted to  provide  living
16    quarters  for  recreational,  camping,  or  travel  use, with
17    direct walk through access to the living  quarters  from  the
18    driver's seat, or a motor vehicle of the second division that
19    is  of  the van configuration designed for the transportation
20    of not less than 7 nor more than 16 passengers, as defined in
21    Section 1-146 of the Illinois Vehicle Code, that is used  for
22    automobile  renting,  as  defined  in  the Automobile Renting
23    Occupation and Use Tax Act.
24        (6)  Personal  property  sold  by   a   teacher-sponsored
25    student   organization   affiliated  with  an  elementary  or
26    secondary school located in Illinois.
27        (7)  Until July 1, 2003, proceeds of that portion of  the
28    selling price of a passenger car the sale of which is subject
29    to the Replacement Vehicle Tax.
30        (8)  Personal  property  sold  to an Illinois county fair
31    association for use in conducting,  operating,  or  promoting
32    the county fair.
33        (9)  Personal  property  sold to a not-for-profit arts or
34    cultural organization that establishes, by proof required  by
 
                            -32-     LRB093 13105 SJM 18355 b
 1    the  Department  by  rule,  that it has received an exemption
 2    under Section 501(c)(3) of the Internal Revenue Code and that
 3    is organized and operated primarily for the  presentation  or
 4    support  of  arts  or  cultural  programming,  activities, or
 5    services.  These organizations include, but are  not  limited
 6    to,  music  and  dramatic arts organizations such as symphony
 7    orchestras and theatrical groups, arts and  cultural  service
 8    organizations,    local    arts    councils,    visual   arts
 9    organizations, and media arts organizations. On and after the
10    effective date of this amendatory Act  of  the  92nd  General
11    Assembly,  however,  an  entity  otherwise  eligible for this
12    exemption shall not make tax-free purchases unless it has  an
13    active identification number issued by the Department.
14        (10)  Personal  property  sold by a corporation, society,
15    association, foundation, institution, or organization,  other
16    than  a  limited  liability  company,  that  is organized and
17    operated as  a  not-for-profit  service  enterprise  for  the
18    benefit  of  persons 65 years of age or older if the personal
19    property was not purchased by the enterprise for the  purpose
20    of resale by the enterprise.
21        (11)  Personal property sold to a governmental body, to a
22    corporation, society, association, foundation, or institution
23    organized and operated exclusively for charitable, religious,
24    or  educational purposes, or to a not-for-profit corporation,
25    society,    association,    foundation,    institution,    or
26    organization that has no compensated  officers  or  employees
27    and   that  is  organized  and  operated  primarily  for  the
28    recreation of persons 55 years of age  or  older.  A  limited
29    liability  company  may  qualify for the exemption under this
30    paragraph only if the limited liability company is  organized
31    and  operated  exclusively  for  educational purposes. On and
32    after July 1, 1987, however, no entity otherwise eligible for
33    this exemption shall make tax-free purchases unless it has an
34    active identification number issued by the Department.
 
                            -33-     LRB093 13105 SJM 18355 b
 1        (12)  Tangible  personal  property  sold  to   interstate
 2    carriers  for  hire  for  use  as  rolling  stock  moving  in
 3    interstate commerce or to lessors under leases of one year or
 4    longer  executed  or  in  effect  at  the time of purchase by
 5    interstate carriers for hire for use as rolling stock  moving
 6    in   interstate   commerce   and   equipment  operated  by  a
 7    telecommunications provider, licensed as a common carrier  by
 8    the  Federal  Communications Commission, which is permanently
 9    installed in or affixed  to  aircraft  moving  in  interstate
10    commerce.
11        (12-5)  On  and after July 1, 2003, motor vehicles of the
12    second division with a gross  vehicle  weight  in  excess  of
13    8,000  pounds that are subject to the commercial distribution
14    fee imposed under Section 3-815.1  of  the  Illinois  Vehicle
15    Code.  This exemption applies to repair and replacement parts
16    added after the initial purchase of such a motor  vehicle  if
17    that motor vehicle is used in a manner that would qualify for
18    the  rolling  stock  exemption otherwise provided for in this
19    Act.
20        (13)  Proceeds from sales to owners, lessors, or shippers
21    of tangible personal property that is utilized by  interstate
22    carriers  for  hire  for  use  as  rolling  stock  moving  in
23    interstate    commerce    and   equipment   operated   by   a
24    telecommunications provider, licensed as a common carrier  by
25    the  Federal  Communications Commission, which is permanently
26    installed in or affixed  to  aircraft  moving  in  interstate
27    commerce.
28        (14)  Machinery  and  equipment  that will be used by the
29    purchaser, or a lessee of the  purchaser,  primarily  in  the
30    process  of  manufacturing  or  assembling  tangible personal
31    property for wholesale or retail sale or lease,  whether  the
32    sale or lease is made directly by the manufacturer or by some
33    other  person,  whether the materials used in the process are
34    owned by the manufacturer or some other  person,  or  whether
 
                            -34-     LRB093 13105 SJM 18355 b
 1    the sale or lease is made apart from or as an incident to the
 2    seller's  engaging  in  the  service  occupation of producing
 3    machines, tools,  dies,  jigs,  patterns,  gauges,  or  other
 4    similar  items  of no commercial value on special order for a
 5    particular purchaser.
 6        (15)  Proceeds of mandatory  service  charges  separately
 7    stated  on  customers'  bills for purchase and consumption of
 8    food and beverages, to the extent that the  proceeds  of  the
 9    service  charge  are  in  fact  turned  over  as tips or as a
10    substitute for tips to the employees who participate directly
11    in preparing, serving, hosting or cleaning  up  the  food  or
12    beverage function with respect to which the service charge is
13    imposed.
14        (16)  Petroleum  products  sold  to  a  purchaser  if the
15    seller is prohibited by federal law from charging tax to  the
16    purchaser.
17        (17)  Tangible personal property sold to a common carrier
18    by rail or motor that receives the physical possession of the
19    property  in  Illinois  and  that transports the property, or
20    shares with another common carrier in the  transportation  of
21    the  property,  out of Illinois on a standard uniform bill of
22    lading showing the seller of the property as the  shipper  or
23    consignor  of the property to a destination outside Illinois,
24    for use outside Illinois.
25        (18)  Legal tender,  currency,  medallions,  or  gold  or
26    silver   coinage   issued  by  the  State  of  Illinois,  the
27    government of the United States of America, or the government
28    of any foreign country, and bullion.
29        (19)  Until July 1 2003, oil field exploration, drilling,
30    and production equipment, including (i)  rigs  and  parts  of
31    rigs,  rotary  rigs, cable tool rigs, and workover rigs, (ii)
32    pipe and tubular goods, including casing and  drill  strings,
33    (iii)  pumps and pump-jack units, (iv) storage tanks and flow
34    lines, (v) any individual  replacement  part  for  oil  field
 
                            -35-     LRB093 13105 SJM 18355 b
 1    exploration,  drilling,  and  production  equipment, and (vi)
 2    machinery and equipment purchased for  lease;  but  excluding
 3    motor  vehicles  required to be registered under the Illinois
 4    Vehicle Code.
 5        (20)  Photoprocessing machinery and equipment,  including
 6    repair  and  replacement  parts, both new and used, including
 7    that  manufactured  on  special  order,  certified   by   the
 8    purchaser  to  be  used  primarily  for  photoprocessing, and
 9    including photoprocessing machinery and  equipment  purchased
10    for lease.
11        (21)  Until  July  1,  2003,  coal  exploration,  mining,
12    offhighway  hauling, processing, maintenance, and reclamation
13    equipment, including replacement  parts  and  equipment,  and
14    including  equipment purchased for lease, but excluding motor
15    vehicles required to be registered under the Illinois Vehicle
16    Code.
17        (22)  Fuel and petroleum products sold to or used  by  an
18    air  carrier,  certified  by  the  carrier  to  be  used  for
19    consumption,  shipment,  or  storage  in  the  conduct of its
20    business as an air common carrier, for a flight destined  for
21    or  returning from a location or locations outside the United
22    States without regard  to  previous  or  subsequent  domestic
23    stopovers.
24        (23)  A  transaction  in  which  the  purchase  order  is
25    received  by  a  florist who is located outside Illinois, but
26    who has a florist located in Illinois deliver the property to
27    the purchaser or the purchaser's donee in Illinois.
28        (24)  Fuel consumed or used in the  operation  of  ships,
29    barges,  or  vessels  that  are  used primarily in or for the
30    transportation of property or the conveyance of  persons  for
31    hire  on  rivers  bordering  on  this  State  if  the fuel is
32    delivered by the seller to the purchaser's  barge,  ship,  or
33    vessel while it is afloat upon that bordering river.
34        (25)  A motor vehicle sold in this State to a nonresident
 
                            -36-     LRB093 13105 SJM 18355 b
 1    even though the motor vehicle is delivered to the nonresident
 2    in  this  State,  if the motor vehicle is not to be titled in
 3    this State, and if a drive-away permit is issued to the motor
 4    vehicle as provided in Section 3-603 of the Illinois  Vehicle
 5    Code or if the nonresident purchaser has vehicle registration
 6    plates to transfer to the motor vehicle upon returning to his
 7    or  her home state.  The issuance of the drive-away permit or
 8    having the out-of-state registration plates to be transferred
 9    is prima facie evidence that the motor vehicle  will  not  be
10    titled in this State.
11        (26)  Semen used for artificial insemination of livestock
12    for direct agricultural production.
13        (27)  Horses, or interests in horses, registered with and
14    meeting  the  requirements  of  any of the Arabian Horse Club
15    Registry of America, Appaloosa Horse Club,  American  Quarter
16    Horse  Association,  United  States  Trotting Association, or
17    Jockey Club, as appropriate, used for purposes of breeding or
18    racing for prizes.
19        (28)  Computers and communications equipment utilized for
20    any hospital purpose and equipment  used  in  the  diagnosis,
21    analysis,  or treatment of hospital patients sold to a lessor
22    who leases the equipment, under a lease of one year or longer
23    executed or in effect at the  time  of  the  purchase,  to  a
24    hospital  that  has  been  issued  an  active  tax  exemption
25    identification  number  by the Department under Section 1g of
26    this Act.
27        (29)  Personal property sold to a lessor who  leases  the
28    property,  under a lease of one year or longer executed or in
29    effect at the time of the purchase, to  a  governmental  body
30    that  has  been issued an active tax exemption identification
31    number by the Department under Section 1g of this Act.
32        (30)  Beginning with taxable years  ending  on  or  after
33    December  31, 1995 and ending with taxable years ending on or
34    before December 31, 2004, personal property that  is  donated
 
                            -37-     LRB093 13105 SJM 18355 b
 1    for  disaster  relief  to  be  used  in  a State or federally
 2    declared disaster area in Illinois or bordering Illinois by a
 3    manufacturer or retailer that is registered in this State  to
 4    a   corporation,   society,   association,   foundation,   or
 5    institution  that  has  been  issued  a  sales  tax exemption
 6    identification number by the Department that assists  victims
 7    of the disaster who reside within the declared disaster area.
 8        (31)  Beginning  with  taxable  years  ending on or after
 9    December 31, 1995 and ending with taxable years ending on  or
10    before  December  31, 2004, personal property that is used in
11    the performance of  infrastructure  repairs  in  this  State,
12    including  but  not  limited  to municipal roads and streets,
13    access roads, bridges,  sidewalks,  waste  disposal  systems,
14    water  and  sewer  line  extensions,  water  distribution and
15    purification facilities, storm water drainage  and  retention
16    facilities, and sewage treatment facilities, resulting from a
17    State or federally declared disaster in Illinois or bordering
18    Illinois  when  such  repairs  are  initiated  on  facilities
19    located  in  the declared disaster area within 6 months after
20    the disaster.
21        (32)  Beginning July 1, 1999, game or game birds sold  at
22    a  "game  breeding  and  hunting preserve area" or an "exotic
23    game hunting area" as those terms are used  in  the  Wildlife
24    Code or at a hunting enclosure approved through rules adopted
25    by  the  Department  of Natural Resources.  This paragraph is
26    exempt from the provisions of Section 2-70.
27        (33)  A motor vehicle, as that term is defined in Section
28    1-146 of the Illinois Vehicle Code,  that  is  donated  to  a
29    corporation, limited liability company, society, association,
30    foundation,   or   institution  that  is  determined  by  the
31    Department to  be  organized  and  operated  exclusively  for
32    educational  purposes.   For  purposes  of this exemption, "a
33    corporation, limited liability company, society, association,
34    foundation, or institution organized and operated exclusively
 
                            -38-     LRB093 13105 SJM 18355 b
 1    for educational  purposes"  means  all  tax-supported  public
 2    schools, private schools that offer systematic instruction in
 3    useful  branches  of  learning  by  methods  common to public
 4    schools  and  that  compare  favorably  in  their  scope  and
 5    intensity with the course of study presented in tax-supported
 6    schools, and vocational or technical  schools  or  institutes
 7    organized  and  operated  exclusively  to provide a course of
 8    study of not less than  6  weeks  duration  and  designed  to
 9    prepare  individuals to follow a trade or to pursue a manual,
10    technical, mechanical, industrial,  business,  or  commercial
11    occupation.
12        (34)  Beginning   January  1,  2000,  personal  property,
13    including food, purchased through fundraising events for  the
14    benefit  of  a  public  or  private  elementary  or secondary
15    school, a group of those  schools,  or  one  or  more  school
16    districts if the events are sponsored by an entity recognized
17    by  the school district that consists primarily of volunteers
18    and includes parents and teachers  of  the  school  children.
19    This  paragraph  does not apply to fundraising events (i) for
20    the benefit of private home instruction or (ii) for which the
21    fundraising entity purchases the personal  property  sold  at
22    the  events  from  another individual or entity that sold the
23    property for the purpose of resale by the fundraising  entity
24    and  that  profits  from  the sale to the fundraising entity.
25    This paragraph is exempt from the provisions of Section 2-70.
26        (35)  Beginning January 1, 2000 and through December  31,
27    2001, new or used automatic vending machines that prepare and
28    serve  hot  food  and  beverages, including coffee, soup, and
29    other  items,  and  replacement  parts  for  these  machines.
30    Beginning January 1, 2002 and through June 30, 2003, machines
31    and parts for  machines  used  in  commercial,  coin-operated
32    amusement  and vending business if a use or occupation tax is
33    paid on the gross  receipts  derived  from  the  use  of  the
34    commercial,  coin-operated  amusement  and  vending machines.
 
                            -39-     LRB093 13105 SJM 18355 b
 1    This paragraph is exempt from the provisions of Section 2-70.
 2        (35-5)  Food for human consumption that is to be consumed
 3    off the premises where  it  is  sold  (other  than  alcoholic
 4    beverages,  soft  drinks, and food that has been prepared for
 5    immediate consumption) and prescription  and  nonprescription
 6    medicines,  drugs,  medical  appliances,  and  insulin, urine
 7    testing materials, syringes, and needles used  by  diabetics,
 8    for  human  use, when purchased for use by a person receiving
 9    medical assistance under Article 5 of the Illinois Public Aid
10    Code who resides in a licensed long-term  care  facility,  as
11    defined in the Nursing Home Care Act.
12        (36)  Beginning    August    2,   2001,   computers   and
13    communications equipment utilized for  any  hospital  purpose
14    and  equipment  used in the diagnosis, analysis, or treatment
15    of  hospital  patients  sold  to  a  lessor  who  leases  the
16    equipment, under a lease of one year or longer executed or in
17    effect at the time of the purchase, to a  hospital  that  has
18    been  issued an active tax exemption identification number by
19    the Department under Section 1g of this Act.  This  paragraph
20    is exempt from the provisions of Section 2-70.
21        (37)  Beginning August 2, 2001, personal property sold to
22    a  lessor  who leases the property, under a lease of one year
23    or longer executed or in effect at the time of the  purchase,
24    to  a  governmental  body  that has been issued an active tax
25    exemption  identification  number  by  the  Department  under
26    Section 1g of this Act.  This paragraph is  exempt  from  the
27    provisions of Section 2-70.
28        (38)  Beginning  on  January  1,  2002, tangible personal
29    property purchased from an Illinois retailer  by  a  taxpayer
30    engaged  in centralized purchasing activities in Illinois who
31    will, upon receipt of the property in  Illinois,  temporarily
32    store  the  property  in  Illinois  (i)  for  the  purpose of
33    subsequently transporting it outside this State  for  use  or
34    consumption  thereafter solely outside this State or (ii) for
 
                            -40-     LRB093 13105 SJM 18355 b
 1    the purpose of being processed, fabricated,  or  manufactured
 2    into,  attached  to,  or  incorporated  into  other  tangible
 3    personal  property  to  be transported outside this State and
 4    thereafter used or consumed solely outside this  State.   The
 5    Director  of  Revenue  shall,  pursuant  to  rules adopted in
 6    accordance with the Illinois  Administrative  Procedure  Act,
 7    issue  a  permit  to  any  taxpayer in good standing with the
 8    Department who is  eligible  for  the  exemption  under  this
 9    paragraph  (38).  The permit issued under this paragraph (38)
10    shall authorize the holder, to the extent and in  the  manner
11    specified  in  the  rules adopted under this Act, to purchase
12    tangible personal property from a retailer  exempt  from  the
13    taxes  imposed  by  this  Act.   Taxpayers shall maintain all
14    necessary books and  records  to  substantiate  the  use  and
15    consumption of all such tangible personal property outside of
16    the State of Illinois.
17        (39)  Beginning  on  January  1,  2005, tangible personal
18    property purchased by a not-for-profit corporation  organized
19    under  the General Not For Profit Corporation Act of 1986 for
20    the purpose  of  ownership  and  operation  of  water  supply
21    facilities  for drinking and general domestic use on a mutual
22    or cooperative basis as provided in  subdivision  (a)(23)  of
23    Section  103.05 of the General Not For Profit Corporation Act
24    of 1986. This paragraph is  exempt  from  the  provisions  of
25    Section 2-70.
26    (Source: P.A.   92-16,  eff.  6-28-01;  92-35,  eff.  7-1-01;
27    92-227, eff.  8-2-01;  92-337,  eff.  8-10-01;  92-484,  eff.
28    8-23-01;  92-488, eff. 8-23-01; 92-651, eff. 7-11-02; 92-680,
29    eff. 7-16-02;  93-23,  eff.  6-20-03;  93-24,  eff.  6-20-03;
30    revised 9-11-03.)

31        Section  99.  Effective date.  This Act takes effect upon
32    becoming law.